In 2024, Costa Rica continued to make strides in attracting foreign investment, with the Costa Rican Coalition of Development Initiatives (CINDE) supporting 73 new foreign investment projects. The announcement highlighted the growth of both new companies and reinvestments from businesses already established in Costa Rica. The country’s ability to adapt to global changes and maintain its strategic positioning is reflected in the data provided by CINDE despite the challenges posed by global economic shifts.
Breakdown of Foreign Investment Projects in Costa Rica in 2024
Of the 73 foreign investment projects in Costa Rica announced by CINDE, 21 were new companies, while 52 represented reinvestments from companies already established a presence in the country. This shows that Costa Rica is attractive for new ventures and businesses looking to expand their footprint. These investments generated approximately 5,500 new net jobs across various sectors, further contributing to the nation’s economic development.
One remarkable aspect of this growth is how Costa Rica has managed to maintain its competitive edge in a climate where global foreign direct investment (FDI) flows have decreased by 12%, according to data from the United Nations Conference on Trade and Development (UNCTAD). While global trends showed a decline in FDI, Costa Rica’s strategic initiatives, skilled labor force, and favorable business environment have allowed it to remain a key player in attracting foreign investment projects in Costa Rica.
Sector Distribution of Foreign Investment Projects
The services industry led the way in terms of sectors, accounting for 67% of the new foreign investment projects in Costa Rica. Fourteen new projects were attributed to this sector in 2024, highlighting the country’s strong positioning. Within this category, corporate services, technology, and logistics companies played a major role in bolstering Costa Rica’s attractiveness to global investors.
Life sciences also stood out, representing 19% of the new companies attracted in 2024. Costa Rica’s continued growth in the life sciences sector is a testament to the country’s increasing importance in the global biotechnology, medical device, and pharmaceutical industries. The country’s robust healthcare infrastructure, skilled workforce, and favorable regulatory environment make it an ideal location for businesses operating in the life sciences field.
Advanced manufacturing, traditionally an important sector in Costa Rica, saw the addition of two new companies in 2024. While the sector saw modest growth, it remains a vital component of Costa Rica’s foreign investment landscape.
In addition to these primary sectors, a new investment project in tourism infrastructure was announced in 2024, highlighting the country’s ongoing commitment to diversifying its foreign investment base.
Reinvestments: A Strong Indicator of Business Confidence
Reinvestments are an essential part of foreign investment dynamics, as they reflect the confidence existing foreign businesses have in Costa Rica’s business environment. In 2024, the services sector saw the most reinvestment projects, with 33 companies deciding to expand their operations further. This reflects a broader trend where foreign companies in Costa Rica increasingly seek to strengthen their presence.
Life sciences came in second regarding reinvestment volume, with 14 projects. This underlines Costa Rica’s ongoing success in attracting and nurturing companies in the life sciences sector. Manufacturing, another core sector for the country, accounted for five reinvestments in 2024.
CINDE’s pivotal role in facilitating these reinvestments has been its active collaboration with new and established companies to foster a business climate conducive to growth. In 2024, CINDE supported 40% of the new projects registered in the Free Trade Zone (RZF) regime, and 78% of reinvestments also came from companies aided by CINDE.
Employment Growth and Opportunities in Costa Rica
Foreign investment projects in Costa Rica contribute to economic growth and create thousands of new jobs for the local population. In 2024, companies supported by CINDE generated 5,482 net jobs, with life sciences standing out as the sector with the highest growth in job creation. The life sciences sector alone contributed 2,599 new job openings, highlighting the sector’s dynamic growth and the increasing demand for skilled labor in the country.
However, the growth of FDI and job creation has shown signs of slowing down compared to the rapid expansion between 2020 and 2022. This signals the need for ongoing attention to human capital development and addressing the evolving challenges in the job market.
Despite these challenges, Costa Rica remains an attractive destination for foreign investment projects, thanks to its stable political environment, skilled workforce, and strong business ecosystem. The country’s ability to balance growth with challenges presents a key opportunity to reinforce its position in the global market.
Addressing the Challenges of Foreign Investment Attraction
While Costa Rica has made notable strides in attracting foreign investment, the competition from other countries is intensifying. Global shifts in industrial policies, particularly in key economies like the United States and the European Union, have pressured Costa Rica to stay ahead in attracting high-value investments. Furthermore, nearshoring and friendshoring strategies from other countries have added new complexities to the landscape.
To remain competitive, Costa Rica must continue to adapt its strategies and enhance its talent ecosystem. CINDE’s Director of Investment Climate, Vanessa Gibson, emphasized the importance of consolidating Costa Rica’s talent pool and improving the country’s competitiveness to remain an attractive destination for foreign companies. She noted that the demand for technological skills and the need for greater efficiency in operational costs are areas that Costa Rica must focus on to stay ahead.
The Impact of Exchange Rates and Talent Availability
Rodrigo Cubero, a partner at CEFSA, identified two critical challenges that could hinder Costa Rica’s growth as an investment destination. The first challenge is the availability of talent. If the country fails to address the growing demand for highly skilled workers, it could become a significant bottleneck for expanding foreign investment projects in Costa Rica. The second challenge is the exchange rate. Costa Rica’s labor is becoming more expensive when measured in dollars compared to neighboring countries, which could impact the country’s attractiveness to investors looking to optimize operational costs.
Conclusion: Adapting to Evolving Global Dynamics
As foreign investment projects in Costa Rica continue to evolve, it is clear that the country faces both opportunities and challenges. Costa Rica’s ability to attract and support new businesses and reinvestment from established companies reflects the country’s ongoing success as a strategic investment destination in Central America. To remain competitive, Costa Rica must address emerging challenges, particularly regarding talent availability and operational costs, while leveraging its strengths in human capital and political stability.
By adapting to the changing global dynamics, Costa Rica can continue to attract high-value foreign investment projects and maintain its status as a leader in the region.