Looking to live in Costa Rica?
There is a very interesting post on expat forum which discusses the subject of Costa Rica and its ever-growing popularity amongst the expat community. However, a number of people have commented on the fact that Costa Rica is not mention as much as people would have expected, and this post has highlighted a number of attractions and issues which need to be considered if you are looking to move overseas.
Background to Costa Rica
Officially known as the Republic of Costa Rica, the country is located in Central America and borders Nicaragua to the north and Panama to the east and south. The country is on the coastline with the Pacific Ocean to the west and south and the Caribbean Sea to the east. In many ways Costa Rica is perfectly situated for business, tourism and those looking to relocate to a different country.
It is no surprise that the country is currently very popular amongst American expats and their numbers are growing each and every year. A simple journey from America down to Central America where the cost of living is only a fraction of that in the US would appear to be one of the main attractions as well as the weather, location and opportunities for the future.
When you consider that Costa Rica is one of the top Latin American countries in the human development index, very high in the environmental performance index and number one in the happy planet index it is perhaps difficult to understand why there is not more comment on the area.
Costa Rican economy
The Costa Rican economy is somewhat underdeveloped when you compare this to other areas of Central America with low wages, high poverty and a lack of investment in the country’s infrastructure. There is also an issue with inflation which topped 9% in 2007 and approach nearly 14% in 2008, although it has to be said that the Costa Rican government are currently trying to reduce the impact of inflation. The economy itself is dominated by electronics, pharmaceuticals, financial outsourcing, software development and there is also a very large exposure to the gambling arena, due in the main to the government’s attractive tax regulations.
Employment in Costa Rica
As you might expect from a country which is struggling to grow and struggling to control inflation, the government has officially introduced laws which prevent expats from working in the country. However, for those looking to set up their own business in Costa Rica, and potentially employ Costa Ricans, there are many tax incentives because international investment in the country is relatively low and needs to increase to allow the economy to prosper.
It is worth noting that, while officially expats are not able to work in Costa Rica, there are certain loopholes in the laws and many companies are more than willing to take advantage of these.
There are a number of comments on the forum with regards to how American expats in particular are received in Costa Rica with the suggestion that some locals appear to resent their ever-growing number. There is a suggestion that some of the more expat populated areas of Costa Rica have pushed properly values way beyond the reach of local Costa Ricans, pushed living costs higher and effectively sidelined many of the locals. While this does not appear to be a trend which is repeated across the country, there is obviously some resentment at the appearance of “relatively wealthy” expats.
Property in Costa Rica
As with many so-called developing countries, the cost of property across Costa Rica can vary markedly and there are also issues with regards to certified ownership of land and property. While this is an issue which will obviously be sorted in due course, there are concerns regarding those who have invested in Costa Rican property and may not have the full safeguards in place to protect their investment.
On a general point, it has to be said that property availability in Costa Rica is relatively high and even if you’re looking for something cheap and cheerful or something more expensive there is likely to be something for you across the country.
Corruption in Costa Rica
While great strides have been made in the political arena in Costa Rica there is still much work to be done and corruption can be a problem in some areas of society. Historically the state has held a monopoly on areas such as finance and telecommunications although just lately these areas of business have been opened up to the private sector and changes are certainly afoot. As with so many Central American countries, corruption needs to be stamped out in Costa Rica otherwise the country will not be eligible for the massive subsidies available through associations such as the International Monetary Fund and the World Bank.
It is also interesting to see that the country boasts an uninterrupted democratic political scene which has lasted anywhere between 59 years and 115 years, depending on who you believe. The country operates a three tier political set-up with the president overseeing the national and local powers along with a number of vice-presidents and cabinet ministers.
Taxation in Costa Rica
As we touched on above, Costa Rica is looking to attract significant investment from overseas and as such has tailored the country’s tax regime accordingly. The situation is even more attractive for those looking to open their own business in Costa Rica with the hope that locals will at some point be offered employment.
Conclusion
While on the surface Costa Rica is an area of the world which is increasing in popularity amongst the expat community, there is still much work to be done underneath the surface. Inflation has been a problem of late and the economy, while changing to adapt to the modern world, is still in the throes of change. The authorities are more interested than ever before in attracting overseas investment and overseas visitors although at the same time they are looking to protect the local job market for Costa Rican nationals.
If you are looking for a developing country which has potential for the future then Costa Rica is one which must hit your shortlist, offering beautiful scenery, a relatively low cost of living and an economy which is changing and should continue to grow into the future.
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