Tourism & Real Estate

Because of its natural, social and safety attractions, plus its economical and political stability, Costa Rica is one of the most popular tourist destinations worldwide. In fact, the arrival of foreigners has brought on the desire in many of the international visitors to make Costa Rica their second country of residence, either for professional reasons or just to live temporally in an excellent climate when year round.
During 2005 over 1.6 million visitors arrived, of which more than 52% were tourist from the United States of America. The majority of foreign residents that buy real estate are of this nationality, many of them retirees. Tourism is the most important generator of foreign currency, ($1.35 billion in 2004) which makes it one of the most important tools of the county’s economy, surpassing exports products such as coffee and bananas.

A Country of Stability

The economic, political and social stability of Costa Rica are the main characteristics that distinguish it throughout its entire contemporary history and one of the most important strengths that have enabled it to reach great success in alluring foreign investors.

The Costa Rican government is ruled by a series of constitutional controls and balances. The executive responsibilities rest on the President, who is at the center of power, and is supported by two Vice-presidents and his cabinet. The President and Vice-presidents, plus 57 Congressmen, which comprises the Legislative Assembly, are directly elected every 4 years. In addition, the country has a strong legal system that manages the 'judicial power', which ensures law conformity and covers nationals, as well as foreigners, within the country's territory.

Costa Rica has a long tradition of stable democracy, which is recognized worldwide and has over 115 years of history. Such dedication to democracy and the peace process have been enhanced by the elimination of the military in 1949, and acknowledged internationally in 1987 when the then President of the Republic, Oscar Arias Sanchez, was awarded the Nobel Peace Prize.

There is no doubt that one of the pillars of the Costa Rican economic development has been trade liberalization, which has allowed exports to surpass its 30% ratio of GDP in 1980 to a current 50% rate. Furthermore, this trade liberalization has been coupled with a series of structural changes, and has pushed towards a productive transformation that has lead to factor productivity growth, diversification of the economy, and a higher level of investment.

The Costa Rican economy has maintained a continuous growth, albeit different international crisis that affected several countries like Mexico, Turkey and Venezuela in 1994-95; Thailand, Malaysia, Indonesia, Philippines, South Korea and Czech Republic in 1997, Russia and Brazil in 1998, and Argentina in 2002. As a matter of fact, within 1997 and 1998, Costa Rica registered growths above 7%.

These decades of peace ,democracy, stability and economic growth has been translated into important social achievements. In this sense, a relevant fact was that in the last 20 years poverty was reduced from 40% to less than 20%. Costa Rica has achieved one of the highest levels in educational and health care in Latin America, which is also one of the best in the world. Furthermore, it has been able to provide broad access to services like health, social security, potable water and basic services for the entire population. Just as the International Monetary Fund Sub-director Agustin Carstens, said, "one basic principle that Costa Rica has made it its own is that, the ultimate goal of economic politics is to achieve human development."

Costa Rica is one of the most stable economies in Latin America. After the last economic crisis almost 25 years ago due to external debt circumstances, it has maintained a yearly current average growth rate above 4.5%, which has resulted in a per-capita income level of $4,361 for 2005.

Quality of Life

Costa Rica's weather is enjoyable year round. The average temperature range in San Jose goes from 57º-75ºF in December, and 63º - 81ºF in May. The Caribbean coast averages 70°F at night and over 86°F during the day. The Pacific coast is hotter than the Caribbean, but is less humid. The combination of leisure and adventure activities (such as playing golf, fishing, surfing, rafting, etc) make this country an ideal place to stay.

After Costa Rica decided to eliminate its army in 1949, resources that were used for military purposes were redirected towards education and health care. This has allowed the country to achieve the best levels of health care in Latin America, comparable only to those of developed countries. Besides the public health system, the country has a strong private health network that counts on many hospitals and clinics with great prestige and reputation. In 2005, Costa Rica registers an infant death rate almost as low as the one for the United States (9.75 deaths for every 1,000 born alive in Costa Rica, against the 6.5 rate in the US). This is particularly relevant when considering that the United States has a per-capita income 8.7 times larger than that of Costa Rica.

According to the World Bank, Costa Rica has the highest life expectancy at birth within Latin America. With 78.7 years of life expectancy at birth, Costa Rica’s rate equals that of Canada and beats the US’s life expectancy by one year. 95% of Costa Rica’s population has adequate potable water access (at least 20 liters/person/day). In addition, 93% of all Costa Rican have access to improved sanitary facilities.
Cost of Living: According to The Economist Intelligence Unit, Costa Rica ranks as one of the best combinations of high quality of life and cost of living.

The Worldwide Cost of Living Survey compares the cost of a representative basket of goods and services in dollar terms from over 130 cities worldwide, in order to provide guidance for the calculation of executive allowances. Using New York as a base index of 100, Costa Rica’s cost of living is 54, ranking 117th among 133 countries, which implies that the cost of buying the same goods basket in Costa Rica is almost the half the cost it has in New York

Business Climate

During the two last decades, Costa Rica’s trade policy has shifted from being one with a high level of protection into one that promotes openness and active trade negotiations internationally.
By 1985, the US government granted trade concessions to several countries in Latin America coming out of debt crisis, the Caribbean Basin Initiative, a independent mechanism through which Costa Rica exports duty-free products to the US to this date, was created.

Later, in 1990 Costa Rica joined the General Agreement on Tariffs and Trade, and since then they have actively participated in multilateral negotiations concerning the elimination of tariffs, and at the same time, in numerous bilateral trade agreements with its most important trade partners. In 1994, the first Free Trade Agreement as such was negotiated and ratified with Mexico, and since then, Costa Rica started an aggressive venture in international markets with significant governmental support.

The government has long placed a high priority in investing in public education, which includes the university system as well as the technical and vocational training scheme. Since the elimination of the armed forces in 1949 many resources have been invested mostly in free education and health services for the population. While a generous education expenditure ratio of more than 5% over GDP is currently maintained by law.

These efforts are reflected in Costa Rica by being one of the highest Human Development Indexes among developing nations (0.834), and one of the highest literacy rates of the Americas (95.6%).