Costa Rica, nestled amidst tropical landscapes, is a hidden business gem. It is renowned for biodiversity, fruit exports and a thriving tourism sector. Recently it has become a leading technology manufacturer in Latin America, with its services sector ranking third in terms of contribution to the country’s GDP. Put together, these are all the top reasons to nearshore in Costa Rica.
It is no wonder that many companies nearshore in Costa Rica when considering Latin America as an outsourcing destination. It has an easy to understand business culture, fantastic trade links and access to both the Atlantic and Pacific oceans along with the Pan-American Highway.
Biz Latin Hub can help you nearshore in Costa Rica or elsewhere in the region. We are regional experts and can advise on whatever situation you might have, whether that’s company formation in Costa Rica or ongoing support through our market leading array of back-office services.
6 reasons to nearshore in Costa Rica
The 6 benefits of nearshoring in Costa Rica are:
- Workforce
- Ease of Communication.
- Innovation and Technology Oriented.
- Political and Economic Stability.
- Government Initiatives.
- Foreign Investment.
1. Nearshore in Costa Rica – Workforce
Costa Rica has a great public education system that allows easier access to higher education degrees from both public and private universities, preparing students in diverse areas according to the market necessities. According to the World Economic Forum, Costa Rica has the best education system in Latin America, not to mention a high level of English fluency among its citizens.
Since the turn of the century, Costa Rica has multiplied its higher education population between the ages of 25 and 64 to 23%, the highest in Latin America according to a survey done by the OECD that covered 40 countries.
Perhaps one of the most important aspects for companies looking to expand their operations abroad is the difference between the base salaries in Costa Rica compared to places like North America and Europe. For example, a senior level software engineer earns an average of USD$3,000 per month.
2. Ease of Communication
Convenience in communication is one of the key aspects to take into account when considering outsourcing your business functions to Costa Rica.
- Time Zone: Costa Rica’s location makes it perfect for real-time collaboration for businesses in the US and Europe.
- Location: Costa Rica is also very conveniently located; reachable by more than a hundred flights going out of both international airports. There are frequent and direct flights to major US and European business cities.
- Culture: Costa Rica’s culture is very similar to Europe or North America as an effect of globalization – making communication and understanding business culture complication-free.
3. Innovation and Technology Oriented
Costa Rica has a talented and innovative workforce that thrives on working the technology sectors. This access to human resources is a key reason why companies consider Costa Rica a prime location to outsource business functions.
In fact, Costa Rica has been dubbed The Silicon Valley of Latin America. The nation has become a key business hub for various manufacturing companies in areas such as electronic components, medical devices, and software development.
4. Political and Economic Stability
Costa Rica is one of the most well-established democracies in Latin America. The nation abolished its armed forces in 1948 after its first and only civil war; as a consequence, the education system was reinforced with funding. Costa Rica has had economic stability since the 1980s, after turning an economic crisis into a successful exportation model based on the service industry.
5. Government Initiatives
The Costa Rican government maintains a strong focus on developing the country’s economy through a number of methods. Some of the key reasons why Costa Rica has been able to advance quicker than some of its neighbors include the government’s push for sector diversification, a strong emphasis on education and incentives such as tax cuts and exemptions for certain companies.
6. Foreign Investment
While many countries around the globe restrict foreign ownership of companies, Costa Rica allows for 100% foreign ownership and furthermore, a company’s capital can be subscribed in a foreign currency. This makes Costa Rica an ideal location for investment by North American and European companies looking for their next expansion destination.
FAQs on nearshoring in Costa Rica
1. What is nearshoring in Costa Rica?
Nearshoring in Costa Rica is the process of outsourcing work to a nearby country. It combines the cost-effectiveness of offshoring with the additional benefits that geographic proximity and cultural affinity offer.
2. What are the advantages and disadvantages of nearshoring?
The advantages of nearshoring include lower labor costs, increased efficiency, reduced risk, flexibility, and cultural alignment. However, there are also disadvantages, such as the high costs of developing and qualifying a new strategic supplier and increased supply chain risk.
3. How can I nearshore in Costa Rica?
Get in touch with a company such as Biz Latin Hub and we guide you through the setup process and help you define how you want to operate your nearshoring operation.
BLH can help you nearshore in Costa Rica
Costa Rica remains one of the great commercial jurisdictions in Latin America. With globalization making the world smaller, many businesses find that they are able to invest in new markets as a way to develop their core business. Costa Rica provides an ideal location for nearshore outsourcing – this is particularly true for US and Canadian companies looking to take advantage of the regions proximity and human resource capacities.
If you are interested in Costa Rica as an outsourcing destination, it is vital you work with a local group to ensure your operational success. Biz Latin Hub is the local partner for many North America companies who have decided to expand south to the lucrative Latin America markets. Contact us today to see how we can support you in Costa Rica and Latin America.
