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QCOSTARICA by Ivo Henfling – Many of you know that the cost of living in Costa Rica has gone up a lot in the past few years. One of the reasons is that the Costa Rica government decided to stop with the mini-devaluations in 2006 and move over to a system of exchange rate bands that has kept the Colon on the same value since then.

Exporters are suffering with the bad exchange rate but more and more companies for the US and other parts of the world are still getting installed in Costa Rica, even though the social security system in Costa Rica is expensive and adds onto the labor cost and operating cost of a business.

Procomer, the Costarican entity for commerce promotion, publishes that Costa Rica has 4.6 million people, with 4,600 products exported to 150 countries. In 2014, we exported US$11.304 billion in goods, US$6.341 billion in services by 2,441 exporting companies. It is also true that quite a few Costarican industries have moved to Nicaragua because labor is cheaper there.

Is it true that everything is Costa Rica is more expensive than elsewhere? Why are foreign industries moving to Costa Rica and local Industries moving elsewhere? Is life for a retiree or expat better elsewhere? Should you stay or leave Costa Rica and go back where you came from?

Is Costa Rica more expensive than other countries?

I just got back from Florida and indeed, shopping in a supermarket is much cheaper there than it is in Costa Rica and the choice of inventory is 10 times or more than what you can get in Costa Rica. Most products in Costa Rica that are not included in trade agreements with other countries, have a high import tax and the 13% sales tax (soon going to 14 and 15%) adds onto it even more while in Florida there is only a 6% state tax plus a 0.5 – 1.5% discretionary surtax, depending on where you are.

Health insurance, CCSS (obligatory Social Security) is affordable and you don’t need hurricane insurance in Costa Rica. You don’t need air-conditioning anywhere, just a ceiling fan here and there, fruits and vegetables is a lot cheaper on the farmer’s market and dental work is also a lot cheaper. Mostly, you don’t need all the stuff that the consumer society in the US almost obliges you to fill your garage to overflow. The average American uses 300 shopping bags worth of raw materials every week and an amount of food that weighs as much as a large car. The constant consumption in the US leaves North Americans largely unsatisfied anyway, which has created what is almost an addiction. In Costa Rica, this urge is not so great because the inventory is simply not available or less affordable. Depending a lot on your life-style, the cost of living in Costa Rica is not bad at all.

Why are some industries moving away and do others arrive?

Costarican’s workforce is very well educated because we have no army in Costa Rica and the funds are used for education. This puts the Tico workforce in a much higher educational level than Nicaragua or other Latin countries. This attracts lot of foreign industries who invest heavily in Costa Rica and pay attractive salaries that in their own country would not attract such a well-educated labor force. Costa Rica attracted over $2 billion just in 2014. On the other hand, social security and production cost (mostly power cost) puts Costa Rica out of the market for simple mass production products and it is cheaper for some local industries to move their operations to Nicaragua, where low-skilled labor is a lot cheaper.

Is life for a retiree or expat better elsewhere?

It just depends on the life style you are looking for and what your income is. If you are living in a 1st world country and you don’t really care about the amenities and advantages this country offers you and if you like a fantastic climate every day for the rest of your life, enjoy the advantages a country with 5% of the world’s biodiversity in only 0.3% of the world’s territory and want to live in one of the happiest countries in the world, Costa Rica is a great option for you. Most of those who are living in Costa Rica do not realize that the cost of living has changed everywhere in the world and how good life can be in Costa Rica compared to life elsewhere.

Should you stay or leave Costa Rica and go back where you came from?

Today’s recommendation: Before you take any wrong decisions, do you homework. Make a list of the issues that bother you when living in Costa Rica and send the list to as many relatives and friends. Ask them to give you their thoughts about how they experience those issues in their own environment.  And if there are certain issues in their environment they think that could bother you when you’d move back as well.

Sure you won’t find a perfect place by moving to Costa Rica, you will have to work hard to make it that place. I did and I still think it is, even with the cost of living higher than before. You might find out that the cost of living is not really such an important factor anymore and that there are other more important issues you should fully take advantage of while you can.

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  • Roberto

    Opinions of a real estate agent! In fact, Central American Date, the online financial
    reporter, just called the country an ineptocracy, meaning a place run by the
    inept. The Urban Dictionary describes the term as “a system of government
    where the least capable to lead are elected by the least capable of producing,
    and where the members of society least likely to sustain themselves or succeed,
    are rewarded with goods and services paid for by the confiscated wealth of a
    diminishing number of producers”.

    • Roberto, why would the opinion of a real estate agent be a wrong opinion? Is the writer trying to sell you a property in the article? The writer is not saying “stay in Costa Rica”, that is exactly what the article is all about. Why does the writer say “Today’s recommendation: Before you take any wrong decisions, do you homework” and “Sure you won’t find a perfect place by moving to Costa Rica, you will
      have to work hard to make it that place. I did and I still think it is,
      even with the cost of living higher than before.”. Sure we’re living in an ineptocarcy, but so are millions doing the same in the US, Europe, South America and many other places. We DO live in a full democracy and don’t spend a dime of the tax payer’s money on an army. Where would you say is the perfect country?

  • Miki

    Let’s get real here folks. Why does everyone side step the facts. It has gotten more expensive in Costa Rica. Electricity costs have sky rocketed. Gas and diesel is more expensive than other countries in Central America. The crime rate is sky rocketing. Home invasions continue to rise, violence is escalating terribly on the streets. I know it is everywhere else in Central America too, but Home Invasions use to just mean getting tied up, robbed and they left. Now this is getting violent too. Weather? Now this depends on where you live. In the central valley you must be ready for lots of rainfall. Sometimes it lasts all day and can rain for months. The rainy season is from May 15 to December 15. And sometime starts in April. It starts slow and increases as the season goes on with September and October the two rainiest months. And in area of altitude of 3,000 ft and higher can get down to 13 Celsius. Now lets talk earthquakes. Some of the worst I have ever been in. That’s what finally put me and my family over the edge to leave. And we know earthquakes, being from California. So I wish if someone was going to write an article they would be honest about what they are writing about. Yes Costa Rica have beautiful county and sites and if you can control your safety and economics you can enjoy living there to a point. But we got tired of always having to make sure someone was a home so we would not get broken into, looking over our shoulder when out in public for the bad guy, and watching when driving to not get locked in by the car in front of you and behind you and then getting squeezed until you were forced to stop and then robbed or even had your car stolen.
    So as all you can tell, yes we actually lived in Costa Rica for many years, owned our home, and had a business.
    Oh, and one more thing no one is talks about, all the expat homes that have been for sale for years and still can’t sell them. And if and when they do, take a huge loss just to get out. And lets see, the medical system. You are going to tell me they have a good socialized medical system? You want to live? Everyone who can afford it uses private hospitals such as Cima and others. Oh, and I know someone is going to say what about the beaches. Guanacaste has been in a drought for some time. Many homes for sale there too. Electricity is even hire in many areas out there as it has a private electrical system. And excuse me, there you need electricity. It’s hot! Enough I guess. Any question or thoughts, I would be happy to respond.

    • You’re of course right Miki, I’d wish Costa Rica was perfect. My question is, did you find the perfect place where you can be happy, where there are no robberies, low electric bills, an affordable medical system, beautiful weather every day, no rain fall but green meadows, no eartnhquakes or hurricanes or tornadoes, and most of all cheap groceries? I’d love to go visit and check it out. Maybe I’ll move there

      • Miki

        The whole world is kind of going down the tubes. I keep looking for the best place that I can feel safe, and has an affordable life style, good weather, etc. I lived for 8 years in Costa Rica, and then moved to Panama. Panama has great weather, a lower cost of living, crime but not as bad, easy residency, good economy, not as pretty as Costa Rica, and a good banking system. So it is better, but not perfect. Checking out somewhere is Asia as a possible next stop……

  • Suzen Caring

    Others might disagree, but I love living in Costa Rica and find it easy to live within my means. Of course, I decided to finally sell my Suzuki and now ride the buses like other Ticos, I do not buy imported, expensive foods, but buy fresh fruits and vegetables directly from organic venders, and I live up in the mountains above Atenas where the air is fresh and cool. I love the rainy season, when the hills are brilliant green, the calls of toucans and oropendolas, and walking down to the corner mercado for fresh eggs and milk. I love having the best coffee anywhere growing all around me, even in my back yard. It is a very simple life, one I could never afford in California where I am from. After being here for 11 years, I still feel the Pura Vida.

  • Fernando Gerdano

    Well put Miki. CR is not like it was 20 yeas ago. Still a great place for a quick vacation but to live!? No way no how.

  • costarick

    See the archived blog on this site, ” What Are The Expat Compromises Required To “Make It” in Costa Rica?”, July 13, 2015. It is all doable for many expats, but quite possibly not for all.

  • Jimmy Kirk

    Think I will stay here. While all the arguments are pretty well on point, there is one thing that makes living in Costa Rica better than being in the US. That being the feeling of making a life that is not full of stress all the time. Yes, there are many things that cost more, but for the most part just how much do I really need them? Police protection is a joke, but it is the same or worse in the US. In the US I have called the police for help and ended up in court defending myself for something that was unjust to accuse me of. At least here, a feeling of not having to look over my shoulder and cringe when I see flashing lights is a reward. Healthcare, not really a big thing, since I have dealt with the VA since the 60’s, this is more or less in line with what I know.
    Costa Rica will never be what it was 20 years ago and neither will any other place in the world. What it was like in Florida 20 years ago is not the same as it is today either. At least I have a bit of experience behind me to see that the future is still ahead of me here, not behind me as it is in the us now. What it all comes down to is a feeling, here I feel more free to live and enjoy than I did in the US. So after living here for the last 5+ years, I will stay and grow with the culture instead of bashing it.

  • Miki

    Just a note, that both Canada and the U.S. put out an advisory two days ago about traveling to Costa Rica because of the crime.