Half of the $2.3bn in FDI that Costa Rica attracted in 2019 went into its local free zones, according to figures from Unctad, bucking an otherwise challenging economic trend in the Central American country.
Costa Rica’s free zones programme has been a major contributor towards shoring up growth in an economy recently dealing with major fiscal unbalances. The country has become a hub for niches of high-added-value manufacturing such as medical devices and services. In the whole of Latin America, only Mexico exports more medical devices than Costa Rica.
Overall, the free zone programme contributed more than $4.7bn to the national economy, or 7.9% of GDP in 2018, up from $3.2bn (6.3% of GDP) in 2014, according to latest figures from national investment promotion agency Cinde.
The companies operating under a free zone regime generated exports of $5.7bn in 2018, or 51% of Costa Rica's total exports, according to figures from Cinde. Additionally, free zone companies generated six out of every 10 jobs created in 2018.
Return on investment has also been tangible: Cinde estimates that, in 2018, total incentives into the free zones programme amounted to $953m, and generated net benefits of $2.29bn.