Costa Rica has emerged as a beacon of economic stability and environmental leadership, not just in Central America but globally.  The country has become an attractive destination for investors, particularly in the real estate and luxury property markets. With a strong economic track record, forward-thinking environmental policies, and a high quality of life, Costa Rica presents a compelling case for those looking to invest in one of the most beautiful and vibrant countries in the world. This article explores recent foreign direct investment data from LX Costa Rica, the World Bank, and the Costa Rican Foreign Trade Promotion Agency.

Economic Growth and Foreign Investment in Costa Rica

Costa Rica’s economy has grown steadily over the past 25 years, fueled by an outward-oriented strategy that embraces foreign investment and trade liberalization. According to the World Bank and Costa Rica’s Ministry of Trade, the country achieved a historic milestone in 2023, closing the year with record figures in foreign direct investment (FDI) flows. The inflow of $3.921 billion represented 131% of the estimated target for the year and marked a 24% increase over December 2022’s figures. This surge in FDI highlights Costa Rica’s attractiveness as a destination for international capital.

The team at PROCOMER confirmed the United States remains the main source of Foreign Direct Investment in Costa Rica, contributing 71% of the total received. At LX Costa Rica, North America, including the US, is also the largest origin point for luxury home buyers in the past year.  Interestingly, overall FDI statistics in Costa Rica also originated in significant amounts from Belgium with 11%, and Switzerland and Panama with 4% each.

Clari VegaClari Vega, LX Costa Rica

A Breakdown of Investment Sectors

Investors have shown confidence across various sectors in Costa Rica. The breakdown of FDI is particularly interesting noting the increased role real estate transactions have taken in Costa Rica’s growth.

  • Free Trade Zone: 61%
  • Definitive Regime: 19%
  • Real Estate: 7%
  • Tourism: 7%
  • Financial Sector: 2%
  • Active Improvement: 2%

This diversified investment landscape underscores Costa Rica’s multifaceted appeal, with real estate and tourism standing out as key areas of interest for luxury investors.

Foreign Direct Investment in Costa Rica (2023)

Real Estate Market Dynamics and Market Insights

Costa Rica’s real estate market, particularly in the luxury segment, offers significant opportunities for investors. The country’s stable growth, combined with a high influx of foreign direct investment, creates a robust environment for property investment. Areas such as the Central Valley, Guanacaste, and the Pacific Coast are particularly popular, offering everything from beachfront villas to mountain retreats.

Costa Rica’s unique blend of economic stability, environmental leadership, and high quality of life makes it an exceptional choice for real estate and luxury property investment. The record levels of foreign direct investment in 2023 underscore the confidence international investors have in the country’s future. By investing in Costa Rica, you are not only acquiring a valuable asset but also becoming part of a community that values sustainability, inclusivity, and progress.

For those considering this type of property investment in Costa Rica, the country offers a rare combination of natural beauty, economic opportunity, and a welcoming environment that is perfect for luxury living. As always, thorough research and consultation with local experts like the award-winning LX Costa Rica team, are recommended to navigate this promising market successfully.

Environmental Stewardship, Social Stability, and Quality of Life

Environmental Stewardship and Green Trademark

Costa Rica’s commitment to environmental sustainability is world-renowned. The country has built its Green Trademark through pioneering initiatives such as the Payments for Environmental Services (PES) program, which has successfully reversed deforestation—a unique achievement for a tropical country. This dedication to preserving natural beauty and biodiversity not only enhances the quality of life but also increases the value of real estate investments, as properties are often surrounded by stunning, well-preserved landscapes.

Social Stability and Quality of Life

Political stability, a strong social contract, and consistent economic growth have led to one of the lowest poverty rates in Latin America and the Caribbean. From 2010 to 2019, the proportion of the population living below the World Bank’s upper middle-income line decreased significantly. Even amid global challenges such as the pandemic, Costa Rica has demonstrated resilience, with poverty rates declining to 12.7% in 2023, below pre-pandemic levels.

Realities and Caution for Costa Rica Investing

Future Outlook and Investment Potential

Looking ahead, Costa Rica’s economic growth is projected to remain strong, with forecasts of 3.9% in 2024, moderating slightly to 3.7% in 2025 and 2026. This stable growth trajectory, coupled with the country’s proactive approach to environmental and social policies, makes it an ideal investment destination. However, investors should be aware of potential challenges, including global economic fluctuations and climate vulnerabilities.

While we are optimistic about Costa Rica’s cultural and economic growth, it’s important to recognize that various internal and external factors can significantly influence market conditions. The World Bank has highlighted potential risks for Costa Rica: Costa Rica’s high susceptibility to external shocks, such as global inflationary pressures, slowed global growth, and tightening financial conditions, could pose challenges. Climate vulnerabilities, intensified by phenomena like El Niño, add to these uncertainties and may disproportionately affect the poor. Additionally, recent increases in migration and perceived criminality could elevate expenditure demands, potentially hindering the pace of fiscal consolidation. As real estate agents, we advise considering these factors in your investment decisions.

edited photograph from speaker panel at Limitless Agent Summit, Leading Real Estate Companies of the World. Read more about the LX Network.

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