In Latin America, several countries compete to attract foreign investment through free trade zone regimes. However, when we analyze the actual benefits, operating environment, and long-term opportunities, Costa Rica clearly stands out as the most strategic destination—especially for high value-added companies.
- Panama has 154 companies operating in free trade zones, mostly focused on logistics and international trade. Brands like DHL, Huawei, Nestlé, and Samsung have chosen its strategic location, where tax exemptions can sometimes be indefinite.
- El Salvador and Honduras host 155 and 493 companies respectively, concentrated in sectors such as textiles and agribusiness. Companies like HanesBrands, Gildan, and Adidas generate thousands of jobs, benefiting from tax exemptions for up to 20 years.
- Guatemala (186 companies) and Nicaragua (258 companies) offer competitive tax incentives aimed at light manufacturing, agriculture, and outsourcing services. Companies like Samsung, Bayer, Cargill, and Yazaki operate there.
So, what sets Costa Rica apart?
Unlike models focused on volume or traditional sectors, Costa Rica has designed its free trade zone regime to foster knowledge-intensive industries such as life sciences, tech services, and advanced manufacturing. More than 330 companies operate under this regime, generating over 80,000 direct jobs and more than $8.6 billion in annual medical technology exports.
Companies like Medtronic, Abbott, Phillips, Boston Scientific, and Cardinal Health have chosen Costa Rica for three key reasons:
- A stable democracy and strong legal predictability
- High availability of technical and professional talent (with dedicated training programs for free trade zones)
- Preferential access to over 50 countries, including the U.S., Europe, and China
A flagship example is the Coyol Free Zone, recognized as the best in the Americas. Its proximity to major ports and airports, state-of-the-art facilities, and strong commitment to sustainability make it an ideal environment for medical and tech companies.
In addition, Costa Rica’s Free Trade Zone Regime offers major tax exemptions (income, VAT, tariffs, and municipal taxes), with periods of up to 12 years—renewable—and even greater benefits for companies established outside the Greater Metropolitan Area. All of this is backed by international treaties, a solid legal framework, and specialized training programs.
In short, Costa Rica offers more than just incentives: it provides an ecosystem where companies can grow, innovate, and expand their presence in Latin America and beyond. Compared to models based on low-cost labor or indefinite tax holidays without strong foundations, Costa Rica represents a strategic, future-focused, and sustainable choice.
Thinking of setting up your company in the region? In Costa Rica, you’ll find more than tax advantages—you’ll find real opportunities for growth. Our team is ready to support you every step of the way.
