Majority of companies in Costa Rica are family affairs

Nearly 80 percent of private companies in Costa Rica are family businesses, according to a recent survey by the Costa Rican Chamber of Family Businesses (CACEF).

Research found that just over 30,000 companies in Costa Rica are family-controlled and represent all sectors of the economy, from small businesses to major corporations.

Research director Guillermo Salazar said results are consistent with data from the International Labor Organization (ILO) showing that family businesses are the backbone of Costa Rica’s economy. Output from family-owned businesses accounts for 69 percent of the gross domestic product and generates 70 percent of the country’s employment, according to the ILO.

Erick Guillén, president of the Costa Rican Chamber of Family Businesses, said that “traditionally this sector of the economy only gains notoriety when there are closures or problems that result in layoffs.”

Guillén said the study found that family businesses are distributed in almost every sector of the local economy. “There are family businesses in sectors ranging from grocery stores or supermarkets to construction, industrial production, technology, manufacturing and service companies,” he said.

The chamber asked family-owned companies about their main concerns and found that the government’s economic policies came first, followed by sales, family conflicts, deaths in the family, taxes and the country’s legal uncertainty.

Family business problems

Last year a family conflict caused a serious crisis for propane customers here. The once-married owners of Gas Zeta, the largest of Costa Rica’s two propane distributors, left their customers — nearly 70 percent of all propane customers here — scrambling to find cooking fuel for homes, restaurants, hotels, hospitals, schools and even prisons.

The company’s operations were halted for several weeks after a Texas court granted the couple a divorce and ordered a division of assets, including the propane company.

Some major companies that started as family businesses have recently closed or relocated their operations abroad, dismissing thousands of local employees. Earlier this year, candy manufacturer Gallito announced it was moving its operations to other countries. And last year, Alimentos Jack’s announced that it was relocating its operations abroad, and Almacenes El Gallito closed all its stores across the country.