Starting a business in Costa Rica

Most of my clients are of retirement age and have pensions. However, some retirees don’t want to vegetate and wish to start their own businesses. According to the Caja Costarricense del Seguro Social (the local Social Security System) during the last five years the number self-employed people has doubled in Costa Rica. Ninety-nine percent of these business are owned by Costa Ricans but this shows that small entrepreneurs can start a business here. It is interesting to note that the country came in first in Latin America and ninth in the world with respect to nations offering the greatest commercial freedom and protection for private business, according to Freedom and Development, a Chilean research institute. There are some opportunities for foreigners who want to start a business.

As a foreigner you are allowed to start your own business with only a few restrictions. If you plan to go into business here, it is very important to be aware of the local consumer market in order to succeed. Most of the country’s purchasing power is located in the Central Valley. A total of 75 percent of the country’s population resides in the central provinces of San José, Alajuela, Heredia and Cartago. About 60 percent of the population is under 30 years old. Intelligent business people will try to meet the needs of this group.

You may have to adapt your idea due to the vagaries of the local market and different purchasing power. Don’t get any grandiose ideas since the country only has about 4.5 million people and a quarter the people are below the poverty line with little or no purchasing power. You cannot expect to market products on a large scale as in North America. Also keep in mind that only two out of three expats who go into business here succeed.

Despite the above, there are opportunities in a few areas. Costa Rica is ripe for innovative foreigners willing to take a risk and start businesses that have not previously existed. Start up costs for small businesses are less than in the United States or Canada. Many of the same types of businesses that have been successful in North America will work if researched correctly. There is definitely a need for these types of businesses. You just have to do your homework and explore the market. Be aware that not everything that works in the United States will work here.

Starting an internet-based business which depends of the U.S. will greatly increase your chances of success here. For example, I know a couple of Americans who started Spanish schools which bring groups of students here. I know a Canadian who founded an on-line newspaper. Another friend started a cell phone rental service for tourists. Whatever you do don’t expect to strike it rich. With luck you can make a good living here.

¡Buena suerte! Good luck!

Local online gambling business specializing in PPH – Price /Pay Per Head, legal in Costa Rica

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7 thoughts on “Starting a business in Costa Rica”

  1. If you do start a business in Costa Rica and plan on hiring local employees make sure you thoroughly understand the laws. Costa Rica is very pro employee. After 3 months it can be a headache and expensive letting a worker go regardless of what they did.

  2. I have a Cousin who is going to purchase Property in Costa Rica and would like for the 2 of us to Start a Business there, We will have minimal start up capital yet it would be a long term investment , I am open to any and all suggestions, I have experience in Marketing and Sales . Please Send any and all Ideas or information.

  3. Hi. Im thinking of relocating to costa rica along with my husband and two young children. I would like to start a small business, specifically a bed and breakfast. I am however open to hearing great ideas. Im looking for something that my husband and I can do ourselves and maybe have only 1 or 2 employees. which areas are good for business and residence (considering we have young children who will be in elementary school). Pls inform me. Thanks.

  4. I am a licensed swimming pool contractor in the US. I’ve been in business over 35 years and have the oppertunity to sell my company. Is there a market in Costa Rica for high end residental and commercial swimming pools?

  5. I am an importer/exporter and I am planning on buying property in Costa Rica in the very near future. I would like the start a little business with things I import like electrics, kids toys, ecigs or clothing & accessories. I’m looking for start up cost and tips.

  6. I have been asked to become a partner in a hotel in Costa Rica. I would own 40% of the shares and the other 3 panes would own 20% each. The 3 are Costa Rica citizens and I am not is there any risk of the 3 just voting together and I have no say at all in the buisness? How do partnerships work in Costa Rica?

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