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Costa Rica: Quality without borders

Costa Rica: Quality without borders. April 2008. Contents :. General Information Laws & Incentives Performing Sectors Public Infrastructure Projects. General Information. Strategic Location. Middle of the Americas 5 hrs flying to NYC Preferential access to US via CBI & CAFTA

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Costa Rica: Quality without borders

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  1. Costa Rica: Quality without borders April 2008

  2. Contents: • General Information • Laws & Incentives • Performing Sectors • Public Infrastructure Projects

  3. General Information

  4. Strategic Location • Middle of the Americas • 5 hrs flying to NYC • Preferential access to US via CBI & CAFTA • Multiple FTA’s

  5. Human Resources • 2007 Population: • 4.4 million • 34.2% of population between 15 and 35 • Universal and Common Education and Social Security System • Foundation of social stability • 6.5% of GDP invested in education • 2007 HDI Position: 48 (5th in LATAM) • Global Competitiveness Index 2007: 63 (6th place in LATAM) Age Structure by Gender

  6. Infrastructure • Free Trade Industrial-Business Parks • 8 in metro area + 3 in construction • Expanding to rural areas • All privately owned • Electricity & Telecom • 95% from renewable sources • National Grid coverage: 97% • Redundant fiber optic cabling • Internet access via Maya y Arcos cables (Global Crossing in 2008)

  7. Logistics Ports on Caribbean and Pacific 24 shipping lines San Jose Intl. (SJO) 9 Mi from downtown 3rd best airport worldwide (>5MM Pax/Año) Second Intl airport at Liberia (LIB) Competitive marine freight to Asia, US and Europe Infrastructure

  8. Economy Source: Banco Central de Costa Rica 2008 GDP Growth Rate: >5%

  9. GDP 2007 Source: Banco Central de Costa Rica

  10. Inflation and Devaluation Source: BCCR Year 2007 Final

  11. Foreign Trade Policy • Strengthening of the export sector • Increasing integration with global economy • Penetrating new markets • Membership in intl. organizations and forums • Attracting Foreign Direct Investment • Free Trade Agreements

  12. Free Trade Agreements • FTA with Mexico, Dominican Republic, Canada, Chile, CARICOM & Panama • CAFTA  Ratified October 2007 • Beneficiary to the Caribbean Basin Initiative and the Generalized System of Preferences PLUS (European Union)

  13. Tomorrow… • Negotiating an Association Agreement with the European Union (FTA Plus) • Membership in APEC • FTA with People’s Republic of China

  14. Exports in US$ 2010 Goal: $18 Billion US 14,0% Annual Variation 2006 / 2007 Source: PROCOMER

  15. Export Products Cantidad de productos exportados 1986 - 2006 Source: PROCOMER

  16. Exports Source: PROCOMER

  17. Main Export Products - 2007

  18. FDI & Exports Source: PROCOMER y BCCR

  19. FDI in Costa Rica Source: BCCR (2007 Estimate)

  20. FDIper capita 2006 Source: CEPAL

  21. FDI in Costa Rica by Sector Source: BCCR

  22. FDI in Costa Rica by Source Source: BCCR

  23. II. Investment Incentives

  24. Foreign Investment in CR • Foreign investors as well as local ones enjoy the same level of protection in relation to their investments

  25. Legal Guarantee • Foreigners have no limitation on landholding and can conduct business freely. • Foreigners have guaranteed equal treatment in terms of constitutional rights and duties • Free movement of capital • Intellectual Property Rights in line with WTO regulations

  26. Laws providing incentives • Law 7210 of the Free Trade Zone regime • Inward Processing (Law 7557) • Law 6990 for Incentives to the Tourism Industry • Law 7575 of the Forestry Regime • Law 7169 to Promote Scientific Development • Law 8542 for the Promotion of Organic Agriculture

  27. Free Trade Zone Regime Eligible companies: • Export processing industries • Trading companies • Service companies • Scientific research organizations • Vessel construction, repair and maintenance industries • Management firms that administer industrial parks

  28. Free Trade Zone Regime • 100% exemption on: • Import duties, tariffs and taxes on all supplies, raw materials, equipment and components. • Export taxes, local sales tax, excise taxes, etc • Profits and repatriation taxes. • WTO: incentives dependent on the exporter’s performance must finish in 2015* for manufacturing but not services.

  29. Free Trade Zone Regime • Minimum Investment: • US$ 150,000 inside free trade industrial parks • US$ 2,000,000 outside free trade industrial parks* • With possibility of local sales: 25% for manufacturing industry and 50% for the services industry *Applies for manufacturing companies only

  30. Inward Processing Regime • Duty Suspension terms: • Raw materials, components, packaging material: 1 year (can’t be renewed) • Machinery and equipment: 5 years, (automatically renewed for equal terms). • No minimum investment requirement • Sales: 100% re-export or mixed (re-export + local) • Proportional payment of sales taxes and duties for local sales

  31. In Good Company…

  32. III. Performing Sectors

  33. Main Investment Sectors • Tourism • Agribusiness • High Technology • Business Services – Call Centers • Software Development • Medical Devices • Infrastructure

  34. Real Estate Boom • North and Central Pacific Areas are growing very fast, attracting people from USA, Canada and Europe • Private residencies and beach condominiums, shopping centers, major luxury resorts • Construction boom • US$1.05 billion of FDI in 2007 (Tourism and non-industrial real estate)

  35. Forestry: furniture, components, etc.. Organic farming: mini vegetables, fruits Aquaculture: Tilapia, Tuna Agribusiness

  36. Software Development Back Office Applied R&D Design and Engineering Electronic component assemly and testing Medical devices Biotechnology Bioprospection Multisector

  37. IV. Infrastructure Projects

  38. Infrastructure • San José Metro Light Rail • Highway improvement: San José – Cartago • Port of Limón expansion • Liberia Airport (LIB) new terminal • Private Initiative Public Works Concession

  39. A Country with Excellent Potential! • “Central American Countries of the Future” • FDI Magazine, 2007/2008 • 2nd Most Competitive Country in Latin America • World Economic Forum, 2006/2007 • 5th Worldwide Technology Exporter • 2005 UN Human Development Report • 35th Place in the Development & Trade Index • UNCTAD, 2005

  40. "...Costa Rica continues to be a strategic site for us and now our best products are manufactured here. I believe this speaks for itself...“ Paul Otellini, President and CEO, Intel Corporation

  41. Categories: • Business friendly • Quality of Life • Human Resources • Economic Potential • Best Investment & Development Strategy Source: FDI Magazine – Financial Times

  42. Thank You !

  43. Contact Emmanuel Hess Executive Director Tel +(506) 299-4703 • ehess@procomer.com Edgar Sánchez Domestic & Foreign Investment Tel +(506) 299-4715 • esanchez@procomer.com

  44. Resourceful Websites • Procomer (www.procomer.com) • Ministry of Foreign Trade (www.comex.go.cr) • National Concessions Council (www.mopt.go.cr/cnc ) • Investors Manual (www.tramites.go.cr/manual )

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