Costa Rica is world’s best in attracting foreign investment

Costa Rica is the best-performing location relative to its size

Costa Rica in 2020 was the world’s best-performing country relative to its GDP in attracting foreign direct investment (FDI), according to analysis from fDi Intelligence.

The country is “attracting 11 times the amount of greenfield1 FDI that might be expected given the size of its economy,” the report reads, placing Costa Rica atop the global analysis. Lithuania and the UAE rounded out the top three.

While Costa Rica attracted less FDI in 2020 than in 2019, the performance “stands out even more considering the challenging investment environment” of the Covid-19 pandemic.

“The country has come a long way since being an exporter of agriculture commodities decades ago; in 2020, medical devices, software and IT and business service sectors accounting for 60% of its inward FDI projects,” the report continues.

fDi Intelligence highlighted the investment commitment from Intel; the tech company will soon assemble and test microchips in Costa Rica.

“This is a reflection of the constant work […] to be an attractive space for foreign investment,” President Carlos Alvarado said in response to the fDi Intelligence report. “We continue pushing ahead.”

Panama, Colombia and Chile were the other top performers from Latin America.

As we’ve written before, Costa Rica has come a long way since it was a literal banana republic — a country whose economy was dominated by the fruit and dictated by the U.S. companies that exported it.

Today, the nation’s biggest export isn’t bananas. It’s not even coffee, or any tropical fruit. Costa Rica’s biggest export sector is medical instruments, which comprised 34% of the $11.7 billion in goods exported in 2020.

The Costa Rican Investment Promotion Agency (CINDE) cites Costa Rica’s educated and bilingual workforce, and the country’s commitment to sustainability, as its biggest selling points. (A stable democracy and tax breaks don’t hurt either.)

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1

A “greenfield” investment is a type of foreign direct investment in which a parent company creates a subsidiary in another country.