Foreign direct investment (FDI), a cornerstone of Costa Rica’s economy, has taken a significant hit, according to a recent report by fDi Intelligence. Our country, long a magnet for high-quality investment, attracted only 43 FDI projects in 2024, a steep drop from 112 in 2023 and 147 in 2022, signaling a challenging year for its investment landscape.
Costa Rica has historically excelled in drawing FDI, particularly in free trade zones, which contribute 15% of national GDP and nearly 60% of exports, driven by sectors like medical device manufacturing and services. In 2023, Costa Rica achieved a record FDI inflow of $3.921 billion, a 24% increase from 2022, with 61% directed to free trade zones and 71% from the United States. However, the 2024 decline in project numbers has raised concerns, with experts noting it as one of the lowest project counts since the post-Intel recovery period in 2014.
The fDi Intelligence report highlights a broader regional trend: Latin America and the Caribbean saw record FDI equity investments of $160.1 billion in 2024, up from $135.7 billion in 2023, despite a 1.6% decline in project numbers to 1,235. This suggests fewer but higher-value projects, a pattern Costa Rica has not fully capitalized on. Mexico emerged as the region’s FDI leader, attracting $43.3 billion across 476 projects, accounting for 38.5% of regional projects and generating 128,289 jobs.
Several factors contributed to Costa Rica’s FDI slowdown. In 2023, the government shifted FDI promotion from the private non-profit Costa Rican Investment Promotion Agency (CINDE) to the state-run Foreign Trade Promoter (PROCOMER), citing CINDE’s focus on U.S. investments and the Greater Metropolitan Area (GAM). The Ministry of Foreign Trade (COMEX) cut CINDE’s funding by $6.3 million—73% of its budget—prompting criticism that the transition disrupted established networks. Global competition, particularly from Mexico, Colombia, and Chile, has also intensified, with Mexico leveraging its proximity to the U.S. and trade agreements like the Pacific Alliance.
“The Ministry of Foreign Trade, as the governing body of foreign trade and investment policy, has played an outstanding role in positioning Costa Rica as an attractive destination,” said President Rodrigo Chaves. However, the fDi Intelligence report no longer ranks Costa Rica among the top global FDI destinations, a shift from its strong performance in prior years.
COMEX and PROCOMER remain proactive, launching a semiconductor roadmap in March 2024 to attract high-tech FDI and targeting sectors like advanced manufacturing, life sciences, and emerging fields such as agriculture and mariculture. A 2023–2026 strategy aims to generate 100,000 jobs and $12.95 billion in FDI, with 70 projects outside GAM, though progress lagged in 2024.
Analysts warn that global uncertainties, including U.S. protectionist policies and supply chain disruptions, pose ongoing risks. Costa Rica’s challenges include addressing infrastructure gaps, enhancing technical education, and diversifying investment sources beyond the U.S. to compete with regional powerhouses like Mexico.
