Starting a Business
Business climate in Costa Rica familiar, but not the same
By David Hannon
Nov 27, 2007, 06:10

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Business climate in Costa Rica familiar, but not the same

Buyers with experience in doing business in other global markets may find the business climate in Costa Rica somewhat similar, but experts point out there are some major differences to consider before diving in.

Costa Rica may feel familiar because there are few unique business practices and customs to be aware of, which is an advantage to buyers looking to strike up relationships with Costa Rican companies. Many Asian countries, for example, have very different business customs from the U.S. which can impede the pace of business. (In fact, more companies in Costa Rica are familiarizing themselves with Asian languages and business customs to become a potential market for Asian companies as well.)

But unlike some other global sourcing hotspots, Costa Rica does not have a reputation for "back door" business practices such as bribes, or the political instability that can make multinational corporations hesitant to invest.

"There has been a major campaign focusing on business ethics from the Costa Rican government after a series of corruption scandals," says González. "Therefore gifts should be carefully handled and follow standards set by the companies."

Jose Coto, regional sales and operations director at Costa Rica Supply Chain and Services (CRCSCS) in Alajuela, says in recent years the business community in Costa Rica has cut back on its giving and receiving of gifts "thus reducing the chances of influencing people to make commercial and professional decisions."

Sergio Castro, Latin America logistics director for APL Logistics, which has a location in Heredia, tells Purchasing, "Costa Rica offers economic and political stability, dedicated and professional business contacts, a very low corruption level and an intense interest in progress."

But buyers take note: Roy Calderon, Latin American sourcing manager for HB Fuller in St. Paul, Minn., says aggressive negotiation with Costa Rican suppliers does not work well and a handshake deal is not uncommon. "Costa Ricans would usually rather do business with a company they trust even if it means sacrificing some of the profit instead of going for a higher profit with a possible troublemaker."

English is so common that language issues are rarely a problem in doing business with Costa Rican companies. Costa Rica's tourism growth has driven the country to make some much-needed improvements in its transportation infrastructure in recent years and businesses in the region are benefiting.

For example the port operations in the city of Caldera were recently outsourced to a private contractor, which has improved the port's efficiency. Quintana says today Costa Rica is "three or four days from Miami by ocean freight, and there is a lot of air freight capability to Miami." Its small geographic size means logistics providers can cover the country more easily. For example, DHL currently has about 1,300 employees in Costa Rica and operates two flights daily to Miami from San Jose.

But road traffic, especially in its major cities such as San Jose, can be difficult. Quintana recommends that buyers coming to Costa Rica for meetings be prepared to offer some flexibility on meeting times, depending on traffic and route. "A lack of punctuality should not be taken as a lack of respect or formality—it's often just the usual city traffic causing it."

"Costa Rica's logistics infrastructure still needs more investment," says Castro. "Some streets have no names or there aren't zip codes, so some technology that works in other areas can't be applied here."

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