Nearshore Americas
Costa Rica free trade

Costa Rica Expands Free Trade Zones Beyond San José

Costa Rica has expanded its free trade zones beyond the capital San José in order to attract investment and job opportunities for people residing in the countryside.

Free trade zones, which offer numerous incentives to employers, have long been a driving force behind the country’s extraordinary success in drawing foreign firms, which have created thousands of jobs in the San José metropolitan area.

“The economic development and benefits generated by free trade zones should be expanded outside the greater metropolitan area to multiply job opportunities,” stated the country’s President, Carlos Alvarado, after signing the legislative bill into law.

Costa Rica is hoping to draw companies in industries such as food processing, agricultural science and environmentally-friendly scientific research activities.

The new law exempts companies from paying value-added taxes (VAT) and consumption taxes on purchases of goods and services, as well as income taxes and remittances.

They may have no need to pay taxes on capital, patent and land for up to 10 years. More interesting still, they are exempted from municipal tax as well, according to

Nearly half of the country’s population of 5 million live outside San José, and most of them are heavily dependent on tourism and agriculture to earn their livelihoods.

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The law will come into effect six months after its publication, according to the country’s investment promotion agency, CINDE.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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