LOW TAX COUNTRIES
Andorra
Anguilla
Antigua & Barbuda
Aruba
Australia
Bahamas
Barbados
Belize
Bermuda
British Virgin Islands
Cayman Islands
Cook Islands
Costa Rica
Cyprus
Dominica
Dominican Republic
Gibraltar
Hong Kong
Isle of Man
Jersey & Guernsey
Liechtenstein
Luxembourg
Malta
Mauritius
Panama
Singapore
St.kitts & Nevis
Switzerland
Turks & Caicos
Vanuatu
Index of Articles
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COSTA RICA
About Costa Rica
Although explored by the Spanish early in the 16th century, initial attempts at colonizing
Costa Rica proved unsuccessful due to a combination of factors, including disease from mosquito-infested swamps, brutal heat, resistance by natives, and pirate raids. It was not until 1563 that a permanent settlement of Cartago was established in the cooler, fertile central highlands. The area remained a colony for some two and a half centuries.
In 1821, Costa Rica became one of several Central American provinces that jointly declared their independence from Spain. Two years later it joined the United Provinces of Central America, but this federation disintegrated in 1838, at which time
Costa Rica proclaimed its sovereignty and independence. Since the late 19th century, only two brief periods of violence have marred the country's democratic development. Although it still maintains a large agricultural sector,
Costa Rica has expanded its economy to include strong technology and tourism industries. The standard of living is relatively high. Land ownership is widespread
Historically, Costa Rica's economy has been based on agriculture, including the production of coffee, bananas, pineapples, and ornamentals, but in recent times ecotourism, electronics, pharmaceuticals, financial outsourcing and software development have become the prime industries. Costa Rica's location in the Central American isthmus provides easy access to American markets as it has the same time zone as the central part of the United States and direct ocean access to Europe and Asia.
The economy has been expanding for Costa Rica in part because the Government had implemented a seven year plan of expansion in the high tech industry. The central government offers tax exemptions for those who are willing to invest in the country. High levels of education among its residents make the country an attractive investing location. Several global high tech corporations have already started developing in the area exporting goods including chip manufacturer Intel and pharmaceutical company Glaxo Smith Kline and consumer products company Procter & Gamble. Trade with South East Asia and Russia has boomed during 2004 and 2005, and the country is expected to obtain full Asia-Pacific Economic Cooperation Forum (APEC) membership by 2007 (the country became an observer in 2004).
For the fiscal year 2005 the country showed a government deficit of 2.1%, internal revenue increased an 18%, exports increased a 12.8% and the number of visiting tourists increased a 19%, reaching 1.5 million people. Revised economic figures released by the Central Bank indicate that economic growth stood at 5 %, nevertheless the country faced high inflation (14%) and a trade deficit of 5.2%. For 2006 the economy is expected to grow a 6.8%
The unit of currency is the colón (CRC), which trades around 535 to the U.S. dollar; currently about 700 to the euro. For 2007 a new currency exchange system will allow the value of the CRC colón to float between two bands as done previously by Chile. The idea is that by doing so the Central Bank will be able to better tackle inflation and discourage the use of US dollars
| Costa Rica |
|
| Capital |
San José
9°56′N 84°5′W |
| Official languages |
Spanish |
| Area |
51,100 km² (129th)
19,725 sq mi |
| Population
|
4,327,000 (119th) |
| GDP (PPP)
|
$45.14 billion (79th) |
| per capita
|
$10,434 (63rd) |
| Currency |
Costa Rican colón (CRC) |
| Time zone |
(UTC-6) |
| Dialling code |
+506 |
COSTA RICA ECONOMY
Costa Rica offers an attractive and stable environment in which to establish a business. Although
Costa Rica telecommunications and transportation infrastructure are state controlled and in need of investment they are nonetheless the best in the region.
A branch of a foreign company operating in Costa Rica must appoint a Costa Rican resident as its legal representative with full power of attorney on matters concerning the business of the branch.
Apart from establishing an appropriate corporate form, setting up and running a business in
Costa Rica will require application for a business license (patente comercial) from the local Municipality (Departamento de Patentes) where the business is to operate, registration with the Costa Rican Revenue Administration (Direccion General de Tributacion Directa), and if there are to be staff, registration of the company as an employer under the Costa Rican Social Security System (Registro Patronal bajo la Caja Costarricense del Seguro Social).
The 1995 General Customs Law introduced reforms aimed at streamlining what up until then had been complex and bureaucratic customs procedures and much of the necessary processing is now accomplished electronically or through a one stop system. Import tariffs have also been substantially reduced.
The free trade zone areas offer a range of fiscal incentives which have had the effect of transforming the direction of the national economy (see Free Trade Zone Industry).
There is a relatively sophisticated legal infrastructure in place with businesses having a wide choice of structures under which to operate (see Forms of Company), including limited partnerships, limited liability companies and sole proprietorships. Although
Costa Rica is a civil code jurisdiction trusts can be created under its Commercial Code.
Costa Rica is not a party to any double taxation treaties. However it has signed an exchange of information treaty with the United States. The banks do not share information with the tax department or with any Government departments other than the central bank. Civil and criminal implications attach to the disclosure of any information received by a lawyer and disclosed without proper authority.
There are no significant barriers to foreign investment and there are no restrictions on the repatriation of profits other than the deduction of withholding taxes which
Costa Rica is in any event considering abolishing.
Restrictions are placed on foreign investment in the state owned monopolies of telecommunications, alcohol distilleries, insurance, newspapers, radio, television broadcasting, electricity and petroleum refining in all of which industries foreign participation is either forbidden or alternatively required to be part of a joint venture with a Costa Rican majority shareholding partner .
Beachfront development concessions also require local participation with the requirement that 50% of the capital must come from nationals and that foreigners wishing to be joint partners must have resided in Costa Rica for at least 5 years.
Although there are no exchange controls as such in Costa Rica, currency received by resident corporations or individuals has to be sold through a Costa Rican bank; and capital imported for investment purposes needs to be 'registered' in order to ensure eventual problem-free repatriation. Enterprises taking advantage of one or other of the investment incentive regimes described below are free of these restrictions to a greater or lesser extent.
The Costa Rican government has introduced a wide variety of incentives to encourage foreign investment.
~ Books About Costa Rica~
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