Costa Rica is primarily known as a popular tourist destination, due to its biodiversity, active volcanoes, beautiful beaches and stunning rainforest.  But did you know that its capital city, San José, is also the outsourcing capital of Latin America?

Costa Rica is the number one exporter of high tech industrial products in Latin America and fourth in the world. It is also the safest country in Latin America.

Costa Rica may be small in size and population (almost 5 million), with much bigger neighbouring countries like Mexico and Colombia, but it should not be overlooked as business destination.

Here’s why:

Costa Rica is one of the most economically, socially and politically stable countries in Latin America. It has been a democratic nation for over 120 years and is the second most stable democracy in Latin America. Its biggest money generating industries are tourism, food, agriculture, services and industrial production (‘we export diversity’, the Costa Ricans say).

Costa Rica has an open economy and free trade agreements with many countries and regions including the EU, Canada, the U.S., China and most of Latin America. Together with Panama, Costa Rica is in the process of becoming a member of the Pacific Alliance, a trade bloc with Chile, Peru, Colombia and Mexico, focusing on the Asia-Pacific region. The country is also working actively towards obtaining a membership in the Organisation for Economic Co-operation and Development (OECD). Costa Rica’s GDP is projected to grow 4.5% by the end of 2017.

Booming healthcare industry now outranks the U.S.

Many countries in Latin America still need to diversify their economies, but Costa Rica started doing that many years ago. As a result, it is now the biggest high tech exporter in Latin America, specializing in medical products. This is a notable achievement for such a small country. Costa Rica’s healthcare sector is particularly interesting; almost all public purchases fall under the responsibility of the social insurance company Caja Costarricense de Seguro Social CCSS (also known as ‘Caja’). This includes 30 hospitals and around 500 clinics. CCSS is investing increasingly in new facilities and equipment in order to be able to meet the export demands of Costa Rican products.

This active healthcare sector brings export opportunities to companies that can offer advanced manufacturing technologies, equipment and medical infrastructure.

Costa Rica needs, among other products, ultrasound equipment, cleaning systems, x-ray systems, precision and cardiovascular instruments. In Costa Rica the whole population has equal access to healthcare services and public health insurance. The United Nations ranks Costa Rica’s health sector among the top 20 in the world.

Manufacturers of medical devices that wish to minimize their production costs should consider investing in Costa Rica. The country is a good location for product assembly and elaboration before exporting to countries where they share tariff-free trade, including other Latin American countries as well as the U.S., Canada and China. Costa Rica also boasts one of the best-educated labour forces among Latin American nations.

Currently there are more than 65 medical device companies active in Costa Rica manufacturing and exporting Class I to Class III products. Costa Rica is also the most innovative country in Latin America, and as an outsource destination it currently ranks 13th worldwide.

Costa Rica also offers opportunities for companies active in medical tourism and the construction of private hospitals. In fact, the WHO now ranks its healthcare system above the U.S.

Retirement hot spot creating demand for services

The National Priority proposal of former President Arias announced new efforts to entice 10,000 additional foreign retirees, or “pensionados”, to make Costa Rica their new home. In this initiative, the country faces stiff competition from neighbouring Panama, Nicaragua and Belize and is looking for ways to step up this effort. When it comes to biodiversity and natural beauty, Costa Rica is hard to beat, and there are plenty of other recreational activities available to keep snowbirds happy on top of the good public and private healthcare.

If you are a supplier of services that cater to retirees,  Costa Rica is certainly worth a closer look.

The proximity to North America, the relatively high level of English usage, and ports on both coasts, make Costa Rica an attractive destination for Canadian and U.S. businesses. Traveling within the country is easy, and distances are short, making it possible to schedule several meetings in a few days.

Costa Rica has a pleasant business climate and the people of Costa Rica (Ticos) generally have a polite, friendly and easy going disposition. Their optimistic ‘pura vida’ attitude towards life in general makes it a country where the pace may be slower than we are used to in Western countries, but very pleasant to live and work with.

Guilty of overlooking Costa Rica as business destination? You’re not alone, but you can change that. Inform yourself about the possibilities for your company and visit the country to see whether you and Costa Rica are a match. Pura vida!

The post Not just a vacation destination – don’t overlook lucrative export opportunities in Costa Rica appeared first on Trade Ready.

With the new administration in action, have you become a bit nervous about the U.S. as an export destination? I’ve recently spoken with many companies from around the world. Most of them said that since President Trump’s inauguration, they are unsure of their future because the U.S. is their only or biggest export market, and they now consider themselves at risk.

The ironic thing is that, whether they realized it or not, they always were at risk.

It is essential to diversify your exports and not depend on one market, especially when that market is as big as the U.S.

Diversifying your export markets, and therefore spreading out the risks, should have been a priority right from the start; but now, the pressure is on.

The good news is, there are plenty of other interesting markets elsewhere, especially in Latin America, that offer the opportunity for growth. Like Canada and the U.S., Latin America is a continent of immigrants, and it offers the opportunity to create scale. This especially applies to Brazil, which has more than 200 million inhabitants. The continent has gone through some major changes in the past 15 years, politically, socially and economically.

For almost all of the LATAM countries, these changes have been for the better. This comes with the one exception of Venezuela, where things have gone from bad to worse to terrible. Unfortunately, that country should not be on your export destinations wish list.

Get involved in infrastructure in Brazil and Argentina

Let’s look at the two biggest economies in South America: Brazil and Argentina. Both countries have new administrations and offer more export opportunities than ever before.

The previous administrations were very protectionist, whereas the new ones recognize the importance of international trade (and not just their own exports) as important means to further develop their domestic industries and quality level. Both countries have experienced major crises, but are now on their way to recovery. It will be a bumpy ride, but definitely one with a positive outlook.

Don’t wait until these economies are fully back on track and growing fast – go there now.

Both Argentina and Brazil have indicated that developing their infrastructure is a top priority, and necessary to increase domestic economic activity and resume growth. This includes air and road transport, energy and cargo logistics. Agritech is another sector that offers plenty of opportunities for companies wanting to export there. In Brazil, luxury retail items and products related to health and cosmetics are also growing markets.

Both countries have a long way to go to improve food security, quality standards (especially for products meant for export), precision agriculture, and harvesting technologies with preference for sustainable techniques (i.e. Brazil’s poultry sector needs to reduce water consumption). In Argentina, there are opportunities to provide solutions for the underperforming dairy industry as well.

Brazil and Argentina are part of the Mercosur, South America’s biggest trade bloc. There is tariff-free trade between the member countries, but they currently do not have free trade agreements with any other nations. That can be considered a negative issue, and of course it poses a challenge, but the absence of a free trade agreement should not be a reason to overlook these two export markets. If anything, there may be more opportunities if you decide to seriously work in these markets. You will need to build strong export tactics and strategies, but will likely face less competition for your exports.

Time to say Hola to Mexico

Another country where your company can grow is Mexico, home to over 100 million people – the second largest economy in Latin America. Mexico is predicted to be the world’s seventh-largest economy in 2050. Typical of most countries in Latin America, and unlike many Western countries, Mexico has a growing middle class (now almost 50% of the population). This middle class likes to spend money on health and beauty products, food (especially convenience foods), home and kitchen appliances, clothing and footwear.

The current quarrels between Mexico and the U.S. may actually prove to be beneficial to Canadian exports. Mexico offers opportunities in (but not limited to) electrical engineering, infrastructure, healthcare (equipment, generic and over the counter drugs), energy, and agriculture.
Mexico is also looking to further develop its floriculture sector. They are seeking active collaboration with the Dutch, but there are opportunities for companies worldwide with activities related to greenhouse development.

Be prepared to make a commitment to LATAM

I would love to discuss each country in Latin America individually, since so many of them offer great potential. Unfortunately, there is no room for that here, but let me state that in general Latin America offers excellent export opportunities in healthcare, energy, infrastructure, retail, agriculture and construction. These countries need to diversify their own industries (beyond commodities) and are in need of technology, innovation, urban development and improved productivity. The growing middle class is prepared to pay premium prices for better products and services.

Exporting to Latin America is not for companies who like an easy ride.

It’s for the ones that are ready to take on the challenge and see the benefits of working with Latin American markets for a long period of time. The region offers many opportunities to companies willing to spend the time, effort and money. You may not find short-term ROI, but if you plan for ROI in two to three years and work the market as you are supposed to, you can profit from it immensely.

Preparation is essential if you want to have any chance of success. Market research and due diligence are your insurance against market entry failure, especially in Latin America.

But if you do it well, having a bit of salsa and samba in your exports can truly make a difference to your company. More diversification, more revenue, more global impact and more fun. Start now!

The post Here’s where you’ll find the biggest LATAM market entry opportunities in 2017 appeared first on Trade Ready.