Foreigners invested $1.6 billion in Costa Rica’s real estate market last year, accounting for 43% of the foreign direct investment received by the Central American country in 2013.
“The acquisition of properties in coastal areas of Guanacaste and Puntarenas explain the rise,” reported the country’s Spanish-language web portal Nacion.com, quoting the country’s investment promotion agency, CINDE.
Expansion of the Curridabat Multiplaza mall and the construction of the City Mall in Alajuela, an initiative from Honduran investors, are among the major real estate projects that were underway in 2013. Many foreign firms purchased land to construct shopping malls and residential apartments throughout the year.
The United States has long been the major foreign investor in Costa Rica, but now other Latin American countries such as Panama, Nicaragua and Colombia are investing heavily in Costa Rica’s property market, according to Nacion.
But, according to Costa Rican News, industrial investment is declining in free zones, where foreign companies are offered incentives and tax breaks in return for setting up business operations.
New investments and re-investments in the free zones totaled $528 million last year, 12% less than in 2012. Investment in the zones has been declining for the past three years, the paper said.
Costa Rica launched the free zone program in 1990 to boost trade and employment. All firms in the system are completely exempt from income tax. According to the paper there are 250 companies employing 80,000 people in the zones.