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A Handbook of Facts for Persons Considering Investments COSTA RICA A HANDBOOK OF FACTS FOR PERSONS CONSIDERING INVESTMENTS A.I.D. RioPr' lc.- Cuuter COSTA RICA A HANDBOOK OF FACTS FOR PERSONS CONSIDERING INVESTMENTS Prepared by CENTRO DE COOPERACION TECNICA INDUSTRIAL (Industrial Development Center) Published with the. .o-peration of MINISTERIO DE INDUSTRIAS INSTITUTO COSTARRICENSE DE TURISMO and the AGENCY FOR INTERNATIONAL DEVELOPMENT IMPRENTA NACIONAL SAN JOSE. COSTA RICA 1963 0E1~ - INT-R~A-1ANIA GH Y UT1'MERICA kATI AIPLIN~ ~ ~~ M~~ P TABLE OF CONTENTS Page Forew ord .......................................... 7 What To Do To Start A Business in Costa Rica ........ 9 Geography of Costa Rica ........................... 10 Po putla ion ......................................... 13 The Cha 1 o)f (k)sl a Rica .... .......................... 13 costa Itica Is a Very Stable Country .................. 14 in e(dhS L'S I(,st F'riend ............................ 16 Cost, Rica'. Fcol n nly. .............................. 17 The Banking Svstem of Costa Rica ................... 18 The (,'enlrt: Anorie nn Common Market ............... 19 Its Nattm'e anod 0hbjetive. ............................ 19 Be,efits T'I I, )erived from the Common Market ...... 20 (o.Nsta Jli(as' ( )l ntrative Advan age ................. 20 Agen.ies \V(oking loward (eater Economic Integration 21 New\ 'l'.;ld, A.sociations Formed .................... 23 Investl ,lil llrt!ies in Food 'rocs(,sing .......... 23 I ies!n )pnl ~intiies in ,orest i'y and Wood Products 24 Iiivestl lit )ioi)(rptunities in Metal \Vorking ....... ..... 24 Invest ,im ())ppolt tilii ,iesii Textile Induslies........... 25 1livest !n(11 ()ppor't il liti i inns Selected AgriCtlliural Crops 26 Inve>,t ,vi ( )lp)rltuities in Tou'ism .................... 28 Investlmout( O)uI-t [lities in Chemicals and Allied Products 29 Investment ()pl) rtulnities in the Callile BusIiness ....... 30 Illvestl nlt .ppm t 1liti,." ill Fishlic ................. 31 Industrial )evelolpmen ILaw ,md Fiscal Incentives Agvreement of ('niral Amler-icaln Count ries ......... 32 Benefits Cri te I,, the Iv'resent Industr'ial Development Law........ .................................... 33 Regulations Governing the Industrial Development Law 34 Fiscal Incentives Agreement. of Central American Co u nl ties ....... ... .. ...... .................... 34 Taxation-Individtal md Corporale Income Tax ........ 35 income.. ............................................ 36 Deductions ........................................ 38 Incom e Tax Rates ................................. 38 Statements To Be Submitted ......................... 40 Accounting Records Necessary ....................... 40 5 Page Property Tax ...................................... 40 Municipal License Taxes ............................ 40 M iscellaneous Taxes ................................ 41 Choice of Organizational Structure and U.S. Taxes ..... 41 Costa Rica's Labor Force ........................... 41 Assistance in Labor Recruitment ..................... 42 Labor I rw,(it vit .. ................................. 43 Labor ..... ....................... ................ 44 .. ...... ............. ..................... 46 V ac'ati )l15 & Ilolidays ............................... 46 c'ial ,se(stlril . ................................... 46 Worklnon,'s ( m lhensation ........................... 46 Insu 'at ,i,s . ....................................... 47 t tilities .......................... .... ............ 47 Electric 1 o v'I .. .................................... O'(st ( o l),w , . ..... ...... .. .... .. ........... ..... 478 Water ......................................... 50 s 'wal ' 1)isjisat .................................... 50 ll trhil i(nal Tra nsportation ......................... 50 Jttterllial ' lsIi)rlation ......... ................... 52 Air • • 52 Ib;tih vy Itl.,,s wtaitiouil ... .......................... 52 La;nd l 'T;Ins ,,itatio ................................ 52 A v(Iikl~lilif'yv I, !: .'vyluildl ings ..................... 54 Adv','t isoti S twins, 11( Media ....................... 55 l vixil_ (')II (Ii nov ill ('4 tit l{ica ...................... 56 Anwric t, i ii i, Si -,iliaiesand Affillates in Costa Rica 58 l'lfllliC'alil Ml.ics.................... 61 What ti \Iiii<t i , I Idiiis ('ai Do For You ....... 62 TAI.': I V:ihii' (i1 Inditsl jal l'oducltion by Most lm1piwittn t ili.. ,................... 1 'TAI1,E 2 A tl'a, l'hii l.;liin, IPo,' ('a pila Income, Paved Roads and Si kweii'd Roads of Central Ame­ tiCall (' )ill1 Ir'h's ia i tIl. ............... 20 TABLE 3. Tylical Air (Cao Riates between Costa Rica and .Ulliled Slaftes ...................... 51 MAP. Shows Air Rote0s and Inter-American H igh way . ......................... 3 MAP. Political Map of Costa Rica ............. 11 Directory of Industrial and Business Firms ............ 67 G FOREWORD "Costa Rica: A Handbook of Facts for Persons Considering Investments" is issued to provide in convenient form basic infor­ mation for investors as well as foreign traders interested in Costa Rica. It attempts to give a summarized view of Costa Rica and its economy, some of the various investment opportunities that exist in the country, the nature of the Central American Common Market, and the general climate for foreign investment. The in­ formation furnished is not intended to serve as a substitute for the legal, financial, and business investigations which must be carried out before definite action is taken by the businessman. It is hoped, however, that this publication, used as a reference book, will be helpful in such investigations. A short directory of typical induslirial and business firms existing in Costa Rica is included as a separate section and appears in the back pages of the handbook. The printing of this handbook was made possible in part by the contributions and support given by the firms which appeal: listed ill the directory The preparation and publishing of this study is the result of file united effort of the Ministry of Industries, the Costa Rica hildustrial Development Center, the United States Agency for In­ oernat ional Development, the Costa Rica Tourism Institute, and 1he National Prtinling Office. The stludy was written and edited by Frank Thomas Gallardo, lndustrial Information Advisor of the Costa Rica Industrial De­ velopnment Cenler on occasion of President Kennedy's visit to Costa Rica in March 1963 to convene with the Central American presidents. The publication was later revised and enlarged to serve as an information guide for persons inquiring about Costa Rica -at the Chicago International Trade Fair as also at the numerous Costa Rican consulates in the United States and other countries. Special interest in publishing this handbnok was expressed by Arnolldo Morales, Administrative Advisor o the Costa Rica In­ clustrial- i)tevelopment Center; Claudio Alpiz,r and Francisco Terdn, President and Executive Secretary respectivaly of the Chamber of Industries; and Ricardo Castro Cafas, Manager of the Costa Rica 'ourisin lnsitilule 7 The following persons reviewed the manuscript and offered their valuable suggestions: Hernin Garr6n, Minister of Industries; James Maish, Commercial Attach6 of the United States Embassy; Robert Fullmer, Acting Industry Officer of the USAID Mission to Costa Rica; Carlos Yglesias W., Director of the Ministry of Industries and of the Costa Rica Industrial Development Center; Joseph Pincus, Program Officer of the USAID Mission to Costa Rica; Lois Fais6n, Vice-President of Publicidad y Mercadeo Ltda.; Alberto G6lcher, Assistant Director of the Costa Rica Industrial Development Center; and Guido FernnIndez, Executive Secretary of the National Association for Economic Development, all of San Jos. German lspinoza, Adminiistrative Officer of the Ministry of IndLust ies; Carlos Sienz, Dagoberto Rojas and Elba Webb of the Industrial Development Center; Roberlo Carranza, Hiram Sotela and the Board of Directors of' the Costa Rica Tourism Institute; Manuel Montero A., Abel Castillo S., and the personnel of the Na­ tional Printing Office were also very helpful in the publishing of this handbook. WHAT TO DO TO START A BUSINESS IN COSTA RICA This booklet is designed to give you a summary of location factors in Costa Rica and to provide you with brief information about the country. Determining whether these factors would be favorable in your case requires individual analysis and study. The Industrial Proinotion Department and the Industrial Development Centerp ot the Ministry of Industries will provide prompt resea rch md will h'acilitale first-hand investigations on which to Iase y(nli ()%\.n 1ecision. The Ministry may counsel for or agaial iven pro)ject in (osta Hica and vill try to guide the prospectlive inl\'i stoin so thal his investllent will be most profitable for him and ('osta ticia. This service is provided free by the COSta RiCall (mmVCe)V(,ntll. The Miiikstr v if Ini istlries can airrange initial contacts for mantlfait'llrs, ii hmulhl intuiries and is slattfed by officialte who will visit or ir;ralil inltervie\s oil re(ilest at the Ministry or elsewhere ill (0'ost laica. molllsel (ont plant location and follow throul.rll a-" deh'ilv(d(. Iist-l;iiil inivestilatim in Costa Ri(a is cicollraged and a:ssistet. The,pci 'licitl;lLifa'ct ll'l- Caill visit olperating plants Ihbrotghn)ull the CoM(illV ;aldl talk 1o 'a'tory executives and workers as well a.s li'cal Il'Tiiisiisncui. Ministi'y Induslies isprepar­ ed 1 help zllinlllins withWitn;e p)lic officials concerning tax ,.Nexeml)tiol ns, fllil F1tcluets' for
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