Costa Rica’s strong middle class a draw for franchises
Costa Rica retained the blue-white-blue flag of Central America until 1848 when, in response to revolutionary activity in Europe, it decided to incorporate French colors and add a central red stripe. Today the blue is said to stand for the sky, opportunity and perseverance; white denotes peace, happiness and wisdom; red represents the blood shed for freedom, as well as the generosity and vibrancy of the people.
Location: In Central America between Nicaragua and Panama, and boarding the Caribbean Sea and Pacific Ocean, Costa Rica is slightly smaller than West Virginia.
Language: Spanish and English
Total Population: 5.1 million
Capital: San Jose
Government: Presidential republic
Religion: Roman Catholic (72%), also Pentecostal and evangelical
Economy: Though a rising fiscal deficit, increasing public debt and low levels of domestic revenue are challenges facing Costa Rica’s economy, the country economic growth, 3.8 percent in 2017, continues. It attracts one of the highest levels of foreign direct investment in Latin America, and under the U.S.-Central America-Dominican Republic Free Trade Agreement U.S. consumer products and industrial goods enter Costa Rica duty free. Costa Rica’s per capita GDP of $12,032 is among the highest in the region, a figure on par with that of Mexico and Panama. The country’s strong middle class enjoys a high degree of purchasing power, and has an ability to choose higher value, international products.
News note: Recently announced figures from Costa Rica’s minister of tourism reported 3.1 million foreign visitors came to the country in 2019, a 4.1 percent bump from 2018. More than half, 1.6 million, came from North America, and the vast majority of those visitors, 1.3 million, were from the United States. Though known for its beaches, the country’s biodiversity is also boosting ecotourism.
GDP (official exchange rate): $218 billion
Currency: Costa Rican colón (conversion rate at press time: 1 CRC equals $0.0018 USD).
Franchising in Costa Rica: The franchise sector continues to see growth, with 349 franchise brands now operating nearly 3,000 establishments in the country and U.S. companies representing 54 percent of foreign franchises. Within Central America, Costa Rica is in second place after Guatemala in franchising sector growth—9 percent in 2017—and both the Chamber of Commerce of Costa Rica and its public banks support franchising by offering assistance. The western suburbs of San Jose, such as Escazú and Santa Ana with existing malls and commercial centers, are proving popular for many brands. East of San Jose, new malls are also being constructed.
Ease of doing business rank by World Bank: 74, down from 67 in 2018.