HomeArchiveBusiness Sector Still Swamped in Trámites

Business Sector Still Swamped in Trámites

Want to start a business in Costa Rica? Gird your loins.

 

Your tour of the Costa Rican bureaucracy will take you to at least eight different agencies and government entities, and it will cost you more than $1,000 and two months of effort, according to the latest Doing Business study by the World Bank.

 

And that’s only if you’re lucky.

 

“I think (the length) is underestimated,” said Emmanuel Hess, the director of investment support services for the Costa Rican Investment Promotion Agency (CINDE).

 

The World Bank ranks Costa Rica 113th out of 178 countries in the ease of opening a business. It’s only one of the country’s more infamous trámites – a term that technically means “procedure” but in Costa Rica means something closer to “red tape.”

 

That rank is a slip from the 106th place it held in the last Doing Business ranking (TT, Sept. 22, 2006).

 

Now private groups and the government itself say the cumbersome trámites are cutting into Costa Rica’s competitiveness, and it’s time to do something about it.

 

“Other countries have advanced much faster,” Geovanny Castillo, coordinator of the trámites simplification program at non-governmental organization FUNDES, told The Tico Times.

 

“Before, not changing was an advantage because it meant you weren’t getting worse,” Castillo said.

 

Times, however, have changed, and today Costa Rica lags behind reforming neighbors such as Panama, Nicaragua, El Salvador and Guatemala, Castillo said.

 

Oscar Arias’ administration has taken action by forming a new ministry headed up by former Economy Vice Minister Jorge Woodbridge. Known as the “Competitiveness Minister,”Woodbridge heads a small office that will lead the charge to speed up the country’s sluggish trámites (see separate interview).

 

“The trámites are excessively slow,” Arias said at a press conference announcing the results of the State of the Nation report.

 

The trámite to open a business is one of the more egregious, and one that groups like FUNDES particularly would like to see change because the existing system puts a heavy burden on small and medium businesses.

 

The problem, Castillo said, is often one of repetition. Multiple regulatory agencies require multiple forms, multiple fees and multiple visits to various offices.

 

Sometimes a site must be visited for a physical inspection by as many as four separate entities.

 

“No one owns the process, and that’s what makes it so complicated,” Castillo said.

 

That, presumably, is where Woodbridge would come in – as a central figure who could use his authority to coordinate all the other parts of the bureaucracy to find ways to speed up the process.

 

Other Central American countries have sped up theirs and lowered costs after cutting down on redundancy by, for example, requiring a single application form.

 

Other important reforms that cut down the length of tramites include having a single entry point for beginning the process, as well as more “good faith” practices that don’t require so much paperwork and so many individual inspections.

 

“That’s the bible that all countries follow,” Hess said. “We don’t have to invent it.”

 

While the trámite to open a business may be the toughest for small and medium businesses, Hess points to others that are more difficult for CINDE’s large, multinational clients.

 

The process to bring foreign workers into the country is now a major headache for foreign companies since the passage of an immigration reform bill last year.

 

Also, any company looking to build something is likely to be hung up with the National Technical Secretariat of the Environment Ministry (SETENA) for a long time – whether for good reason or due to lack of staff and funding at the Secretariat.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trending Now

Canadian Says She Lost $350,000 to Costa Rica Community Now Under Fraud Investigation

A Canadian woman says she sold everything she owned and lost about $350,000 to a religious community in the southern area of Pérez Zeledón,...

Pacific Coast Faces Its Highest Tides of the Season Through Saturday

If you live near the shore or have a beach trip planned on the Pacific coast this week, expect the sea to reach farther...

Costa Rica Banks Rank Second Only to Argentina for Dollar Risk, Moody’s Says

Costa Rica's banking system is among the most exposed in Latin America to a sudden squeeze on dollar funding, second only to Argentina, according...

What Driving to San Ramón Could Cost You Each Month in New Tolls

If you drive Route 1 between San José and the Western Valley, the planned expansion to San Ramón will come with four toll stations....

US Tourist Breaks Leg in 10-Meter Fall at Costa Rica Waterfall

A US tourist broke his leg in a 10-meter fall at Costa Rica's Cinchona waterfall, sparking a nearly five-hour rescue.

For First Time, Costa Rica Votes Against UN Call to End US Embargo on Cuba

Costa Rica voted against the annual United Nations resolution calling on the United States to lift its economic embargo on Cuba, the first time...

Costa Rica Pension Overhaul Could Require 30 Years of Work Instead of 25

Workers in Costa Rica's main public pension system could need five more years of contributions before they can retire, receive a smaller share of...

Costa Rica’s Native Stingless Bees at Center of Supreme Court Fight

Costa Rica's tiny native bees have become the center of a legal battle that could affect beekeepers, honey producers and efforts to protect some...

US Embassy Helped Mother Get Son Out of Costa Rica Community, She Says

An American mother says she watched her son grow thinner and more distant over more than two years in a religious community in Pérez...
Loading…

Latest News from Costa Rica

Costa Rica Coffee Maker Chorreador
Costa Rica Car Rentals
Costa Rica Travel Insurance
Costa Rica Travel