Tired of the bureaucracy and high production costs, many Costa Rica entrepreneurs believe the country has become to expensive and difficult to operate in, while other countries like Colombia and Panama are making it attractive for them to relocate.
The Costa Rican Union of Chambers and Associations of Private Enterprise (Uccaep) says many Costa Rica business are receiving tempting offers from abroad.
Franco Arturo Pacheco, the new president of Uccaep, says the private business sector is in dire need for a reduction in “tramites” (paperwork) and lower energy costs. The most recent case, cites Pacheco, is of Costa Rica pineapple producers wooed by Colombia to move their production there.
Pacheco insists that “the government must open its eyes to the high impact this would have on attracting investment and employment” in the country.
Despite the “hard to do business” environment, the Uccaep believes entrepreneurs from all sector should stay put and rather bet on continuing to attract investment to generate more jobs.
In the Doing Business ranking by the World Bank Group, Costa Rica ranks 121st in places to start a business and 58th overall of Ease of Doing Business. Meanwhile, Colombia ranks 84th and 54th, respetively and Panama 69th and 44th.
For Juan Rafael Lizano, president of the National Chamber of Agriculture and Agribusiness (CNAA), the situation has reached a point that leads many companies to informality. The consequences are that it affects income tax collections and contributions to the social security fund, the Caja.
Lizano says it’s unlikely companies will leave Costa Rica altogether. “Although the country is expensive, there is a very high investment here. However, some businessmen might start looking abroad for their expansion opportunities, with lower operating costs,” said Lizano.