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There are many advantages to doing business in Costa Rica. Over the last few years, the government there has been hard at work crafting a favorable business environment, including tax incentives for people to do good work. If you’re considering doing business in Costa Rica, it’s important to understand human capital trends in the country. Here’s everything you need to know.
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Tech Graduates & Workforce
Over 20 companies on the Fortune 100 list have a presence in Costa Rica. Additionally, more than 250 multi-national companies outsource services to the country, including Google, IBM, and Amazon.
Development in the tech field is attracting companies to the area, including:
- MenTe Program. The country established an initiative called MenTe to encourage women to enter STEM fields.
- Co-Working Spaces. Costa Rica has multiple co-working spaces, where people come to work in the tech field. There are also multiple business accelerators and incubators, such as Startup Costa Rica, Carao Ventures, PROCOMER, and more.
- Education. The people in Costa Rica are highly educated, thanks to free universal education. It’s consistently ranked as one of the most educated countries in all of Latin America.
- Innovation. The country ranks second in all of Latin America for innovation, behind only Chile.
- Skilled Workers. Residents have the third-highest scores for tech skills, specifically in programming and coding, for the region.
Key Sectors for Local Activity
Costa Rica is home to a diverse economy. In addition to being a blossoming tech hub, it’s also home to many other vibrant industries. Here’s an overview of the country’s main business sectors:
- Tourism: This is a fast-growing industry in Costa Rica, pushing into the top three sectors in terms of revenue. Tourism accounted for roughly 12.5% of the country’s GDP in 2012, and more than 2.7 million visitors came to the country in 2015.
- Agriculture: Agriculture accounts for roughly 6.5% of Costa Rica’s GDP. It also employs approximately 14% of the workforce in the country. The main exports are pineapples, potatoes, fruits, sugar, bananas, rice, coffee and corn.
- Manufacturing: Costa Rica makes many products, including textiles, electronics, plastics, chemicals and machinery. Large-scale manufacturing first entered the country in 1998, and it has taken off since then. Some of the top manufacturing companies in the country include Terramix S.A., GeoTecnologÍas SA, ValTech Manufacturers, and more.
Key Sectors for Outsourcing
Costa Rica is a huge hub for outsourcing in the IT and services industries. U.S.-based companies realize the benefits of outsourcing specifically for software engineers and programmers, coders, and call centers.
English Speakers
Costa Rica has a high level of English proficiency. In 2019, the country ranked second for highest English proficiency in the region. Teachers in the country speak English well, and that translates to students learning proper English from an early age.
Average Wages
Significant cost savings can be found with Costa Rican workers. The average cost of hiring a developer in Costa Rica is roughly half of what it would cost to hire a U.S. worker.
A software engineer, for example, earns the equivalent of roughly $46,552 per year. A similar software engineer in the U.S. earns around $86,005 per year.
Prominent Cities for Business
Much of the economic activity in Costa Rica happens in the capital city of San José. Home to a little more than 333,000 people, the city is still a bustling hub of business and economic activities. Some other top cities for business in Costa Rica include:
- Puerto Limón: Known as the multicultural center of Costa Rica. There is a diverse mix of people in this region, which has two ports, making it a huge center for exports.
- Alajuela: This city is known for its agricultural production, specifically mangoes. At one point in time, Alajuela was the capital city of Costa Rica.
- Heredia: Home to many colonial buildings, the city is known as “the City of Flowers.” It’s also home to National University of Costa Rica, making it a metropolitan center despite its small size.
Turnover Rates
The development of Costa Rican tech companies keeps workers in the country very happy. That pushes down the attrition rate considerably compared to surrounding countries, which is very important to companies outsourcing here.
Is Costa Rica Right for Your Business?
SERVIAP is a leading Professional Employer Organization (PEO) ready to help your business expand operations throughout the Western Hemisphere. PEO is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization. Contact us today to learn more about how you can expand your business in Costa Rica.
