Going into Business in costa rica


Most North Americans who go into business in Costa Rica don’t bother qualifying under the $50,000 or $200,000 investment laws, since tax advantages accrue to any qualifying business and because a Costa Rican passport isn’t an enticement to those already holding U.S. or Canadian passports. Residency papers can be easily obtained under the residente rentista provisions of the laws.
Anyone who owns a business is permitted to import many items necessary to operate the business, without the usual import duties. This can be important. For example, while the owner of a motel or other tourist facility is restricted in the importation of an automobile, he is given tax breaks when importing a passenger van because he needs it to transport clients. The owner of a farm can buy a pickup or four-wheel-drive vehicle at reduced duties, because it’s necessary for operation of the farm. For this reason you see many four-wheel-drives zipping about the country, even in places where such a vehicle really isn’t necessary; they’re cheaper than regular automobiles.
For that matter, it isn’t even necessary to become a resident to own and manage a business. Since most businesses are registered in the name of a corporation, a foreigner holding tourist papers can effectively control and manage the enterprise. While it is against the law for a non-citizen to work at an ordinary job without permission, it’s perfectly okay to oversee your own corporation. Some discretion is required here, however, since part of the scheme is to create jobs. I know of at least one case in which a foreign couple built a small business and managed it entirely by themselves (working very long hours, incidentally). Local government officials hinted that perhaps they should hire some help and were slow in granting permits as a way of reinforcing the hint until the couple finally hired much-needed employees.
Many North Americans have done quite well in Costa Rican business ventures. They bring enthusiasm, expertise and imagination, often recreating successful enterprises they operated in their home country. One businessman from Illinois, who started a successful beach resort about eight years ago said, “Its interesting to see who makes money here and who goes belly-up. The successful ones are those who come here because of the attractive Costa Rican lifestyle and go into business as a means of staying in Costa Rica. They usually make money despite themselves. The ones who face one disaster after another are those whose primary interest is making a pile of money.”
Foreigners are particularly successful in tourist-oriented businesses, because they understand the wants and needs of other foreigners who visit Costa Rica. Restaurants and bars are popular ventures. However, an exceptionally high failure rate of these kinds of establishments should worry investors. Motels, hotels or bed and breakfasts fare better, and demand for rooms grows at a steady pace. Real estate sales and development produces some fabulous success stories as well as some spectacular flops. Too many wheeler-dealer types have the habit of starting fabulous developments that look great on paper, but never get past the fantasy stage.
One example of innovative thinking in business opportunities is an iguana farm. Looking like miniature dinosaurs, iguanas are considered gourmet food in some quarters and apparently make good pets. The Costa Rica iguana farm was started by Dagmar Werner of the Green Iguana Association and has earned her the nickname of “Iguana Mama,” for her efforts to convince Ticos to try iguana farming as an alternative to cattle. Costa Rica is a growing economy; as it grows, so will opportunities for new businesses and acceptance of new ideas.
You needn’t start your own business; numerous in-place enterprises are always available through ads in local newspapers. Of course, just as is the case back home, there’s generally a reason for selling a business: too much work, not enough profit, illness, or perhaps it’s just time to cash in the equity. Don’t consider buying a business unless you’re competent to handle it and understand exactly why the enterprise is up for sale. What makes you think you can make money at this if someone else failed? Another consideration: Do you really want to move to a beautiful country and spend all your time working at a business?
Among the many businesses: bed-and- breakfasts, car-rental agencies, a pharmacy, travel agencies, lots of bar-restaurants and discotheques. Apartment buildings, hotels beach resorts are always on the market, as are teak and palm plantations.

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