COSTA RICA, A PARADISE IN CENTRAL AMERICA
Costa Rica, or the “Switzerland of the Americas” with beaches, attracts sun seekers and real estate investors alike.
The World Bank says that Costa Rica has made the most progress among developing countries in reforming its economy to become more business friendly, according to the 2015 Doing Business report issued in late October. It commends Costa Rica for advancing to 58th place from 79th a year ago.
Singapore led the Doing Business ranking for the 10th year in a row, followed by New Zealand, among 189 countries included. The Report’s criteria range from ease of getting credit to the reliability of electricity supply. Costa Rica was cited for making it easier to get connected to electricity, find credit, and pay taxes through the promotion of electronic filing.
Combined with the most stable government in Central America and a political philosophy dedicated to using public funds to assist its citizens, Costa Rica has considerable appeal for investors and visitors. The term “Switzerland of the Americas” isn’t precise, but it suggests that Costa Rica too is a small country, not rich but relatively well-off compared to Nicaragua at its northern border and Panama at the southern, and blessed with natural beauty. Unlike landlocked Switzerland, Costa Rica is a coastal country, bounded east by the Caribbean and west by the Pacific Ocean. No snow skiing in Costa Rica but plenty of water sports including the other kind of skiing.
Approach to investment
The government encourages investment by foreigners in Costa Rica with tax exemptions and free trade zones. The result has been a series of high tech assembly plants in medical devices, pharmaceuticals, and software from companies such as GlaxoSmithKline, Procter & Gamble, and Intel. However, Intel ended manufacturing in Costa Rica in 2014 and now uses the space as a test and design facility.
As an agricultural country, Costa Rica’s bananas, pineapples, and coffee remain the main cash crops especially gourmet Arabica coffee beans known to espresso lovers everywhere. But since 1999 the country has earned more foreign exchange through tourism than agricultural exports. Many of the visitors who come to Costa Rica don’t come for business – at least not at first. They are attracted by natural beauty and golden beaches that make this small country of 4.8 million people a draw for tourists from North America and, increasingly, the rest of the world, making Costa Rica the most-visited nation in Central America.
So the best opportunities for investment today involve development and/or acquisition of properties for hotels and residences, initially for vacation, later, perhaps, permanent homes. Some projects were begun before the financial crisis and put on hold. Others are new and reflect current local and global economics, explains Scott Cutter who runs 2 Costa Rica Real Estate.
Where to invest in real estate
Although Costa Rica is small – about the size of the U.S. state of West Virginia – it includes distinct geographical areas. Guanacaste, the northwestern province, is where most of the large “corporate style resort development” is ongoing with brands like J.W. Marriott, Four Seasons, Hilton, DREAMS, and RIU Resorts. A big advantage of this area is the Liberia International Airport with direct connections to cities in the U.S., Canada, and Europe.
Someone with USD 2.5 million to invest might consider Luna Tica Lounge, a 4- bedroom, 5-bathroom 2-storey property high above the Las Manchas beach. The 6,000 sq. ft. home has been used as a rental and a permanent residence, offering the owner of this Guanacaste property flexibility.
In the Central Pacific area, Cutter calls the Marriott Los Suenos “the largest residential and hotel development” with new product coming on the market every year. In Jaco Beach the Crocs Casino and condo project has just been inaugurated, “initiating the revitalisation of this booming coastal town,” explains Cutter.
Casa de Sol is a 4-bedroom, 5-bathroom estate home in Santa Ana with city, mountain, and valley views in a gated community. For USD 2.2 million, the owner gets almost 1.5 acres of level land beyond the house and an adjacent lot of 6,113 sqm that could be added to the property.
In Manual Antonio, farther south, the Marina Pez Vela is already operating a full service yacht harbour with 100 slips and another 100 under construction. The second phase commercial centre is already opening while plans for a 5-star hotel and condo project are in final planning stages.
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