PKF 'Despacho Murillo Marchini & Co. Ltda. Doing Business in Costa Rica

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1 PKF 'Despacho Murillo Marchini & Co. Ltda Doing Business in Costa Rica

2 ABOUT PKF COSTA RICA Our organization specializes in rendering services of the following fields: public and private accounting, finance, administration, economics, and legal. Since it was established, the goal of our firm has been to build close relationships with our clients, whereby our dedicated professionals work hand in hand with our clients designated employees. Working in the world s main financial and economic centers alongside first class companies engaged in the same lines of business has always been our priority. We decided to associate ourselves to PKF in 1990, when the international professional services landscape started changing. PFK is a global network of legally independent public accountants and business advisors that provides all the services that today s global enterprises require. PKF has offices in over 335 cities and currently has more than 7,800 associated professionals. We have provided services to a wide range of businesses from different cultural backgrounds in a responsible and ethical manner. As a result of our association with PKF, we are capable of providing specialized services to our clients across all continents. Disclaimer PKF Costa Rica is a member firm of the PKF International Limited network of legally independent firms (collectively PKF ) and do not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. The items contained in this booklet have been prepared as a general guide. They are not a substitute for professional advice, which would necessarily have to take into account the particular circumstances. The information and opinions given are subject to change without notice. Neither PKF nor its partners, agents or employees make any representation regarding the completeness nor accuracy thereof and they accept no responsibility for any loss or damage incurred as a result of any user acting or refraining from acting upon anything contained in this booklet or omission therefrom PKF International Limited. All rights reserved.

3 If you are considering investing in Costa Rica, or otherwise doing business in the country, this booklet might interest you, as it provides a brief summary of the general aspects that you need to consider. For a more detailed explanation, or to gain better insight on a specific topic, please feel free to contact our office and we will gladly answer your questions. Costa Rica is a small country located in Central America with a surface area of 51,100 km 2. In spite its small size, this country is a great destination for several reasons. The country s tropical location allows for a vast biodiversity of plant and animal species. Also, thanks to its location in the isthmus, the country has served as a cultural and biological bridge that allowed animal and plant species to blend, and North American and South American cultures to meet. Its flora and fauna diversity is amongst the broadest in the world, as its location favored mass migrations between North and South America. Moreover, in addition to being recognized as Latin America s oldest democracy, Costa Rica is one of the few countries in the world without an army (abolished in 1948) - a characteristic that has allowed it to direct its resources to education, nature preservation, healthcare, among others. Fernando Murillo Marchini Managing Partner

4 COSTA RICA CARBON NEUTRY BY 2021 DEMOGRAPICHS AND ENVIRONMENT Costa Rica has an area of 51,100 km 2, of which 99.1% is covered by land, and the remaining 0.9% by water. Approximately 35.3% of its land is used for agriculture, while 51.0% is covered by forests. The country s coastline is 1,228 km long in total. The Pacific coastline is 1,016 km long and the Caribbean coastline is 212 km long. The country is divided into seven provinces, which are in turn divided into 81 counties and 463 districts. Costa Rica borders Nicaragua and Panama and has coasts in both the Pacific Ocean and the Caribbean Sea. Nowadays, Costa Rica is positioning itself as one of the world s most coveted nearshore locations for American companies, as well as a strategic offshore location for European companies looking to insert themselves in the Americas. Costa Rica is even located within the same time zone (GMT-6) as Central United States, and therefore is able to work easily with businesses in this time zone.

5 Advantages of investing in Costa Rica The fact that Costa Rica has no army has allowed the country to invest in educating its population, and therefore the majority of Costa Ricans have university studies or otherwise first class technical studies. Consequently, Costa Rica is amongst the top ten countries in the world to invest in and it is becoming a preferred destination for Latin American business leaders looking for quality, efficiency, experience, and growth opportunities in a more reliable and stable business environment. Over 30 years experience in hightech manufacturing processes and services proves it. Furthermore, Costa Rica s literacy rate is close to one hundred percent (96.8%) in its population over 15 years of age. Regarding health indexes, Costa Rica has the best results in the region. Its mortality rate is of 9.5 children (per 1,000 born alive) and its life expectancy is amongst the highest in the world. In terms of public safety, murder rates are amongst the lowest in Latin America. The last reported rate (2009) was 7.7 (per 100,000 people). In addition, Transparency International ranked it 5.1/10 in its Global Corruption Report. As a result, the country ranked 47 out of 180, the highest in the region. Thanks to the country s education spending, its workforce represents 59.1% of its population over 15 years of age. The industry and services sectors are the two most important in the country, representing 20.0% and 68.3% respectively. *colones can be freely exchanged with foreign currencies. Additionally, Costa Rica has used resources to build a solid service infrastructure, ranging from a powerful, redundant, and reliable power grid (powered by renewable energy sources such as geothermal, biomass, wind, and hydroelectric energy) to strategically located, first-class industrial parks and business centers.

6 Costa Rica is the Central American country with the lowest poverty rates: 18.5% of its total households (with 14.3% living in relative poverty, and 4.2% in extreme poverty). Poverty is mainly concentrated in rural or semi-urban counties and economically depressed regions (coastal or border regions, or completely rural regions). The percentage of households in rural regions living in poverty and extreme poverty is slightly higher than in urban areas. The inequality in the distribution of income in Costa Rica presents a value In regards to the country s income deciles, the richest decile receives 36.5% of the nation s income, while the poorest decile receives 1.2%. Moreover, for the year ended, Costa Rica rose 21 places in the World Bank s Doing Business 2016: Measuring Regulatory Quality and Efficiency, a global study that measures the feasibility of doing business in different countries. The country came in 58 th place out of 189, in contrast to its 79 th position the year before. Costa Rica also improved its absolute ranking on the scale from 0 to 100, whereby it scored points, almost 5 more than the year before. In fact, according to this international body, Costa Rica was the economy that most improved its raking in the world. Singapore was ranked first, followed by New Zealand and Denmark. As far as Latin American countries, Costa Rica only came in behind Mexico (38), Peru (50) and Colombia (54).

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8 Political System

9 Costa Rica is the oldest democracy in Latin America and is even the region s most democratic country. Worldwide known for having no army, Costa Rica has resorted to International Law instruments to solve disputes between countries, gaining international recognition as a peaceful country. The abolition of its army allowed it to finance sectors such as education and health, as well as to ensure access to electricity and potable water. Since 1949, the country has held regular presidential elections every four years. Alternation in the political parties in power has been a core political value and principle in Costa Rica. The country s commitment with unarmed peace was ratified in 1983 when President Monge declared Costa Rica s perpetual neutrality in armed conflicts, a commitment with significant international exposure, especially in 1987 when President Arias received the Nobel Peace Prize for his contribution in the signing of the Central American Peace Agreements. Costa Rica has political stability and the President of the Republic and its congressmen are elected by means of democratic elections every four years.

10 ECONOMY Costa Rican economy is the 11 th largest in Latin America, and the largest in Central America. This is essentially due to tourism, agriculture, and the export of electronic equipment and services. In addition, Costa Rica is a pioneer in the use of renewable energy sources.

11 Communications and Transportation

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