Barriers to Business in Costa Rica

The procedures for obtaining operating permits and municipal licenses are the things that cause the most difficulty for companies who are trying to formalize their operations in the country.

Thursday, January 26, 2017

Despite constant complaints by entrepreneurs, excessive bureaucracy remains one of the main obstacles to the formalization of companies in Costa Rica.  According to a business survey developed by Uccaep, the procedures for obtaining operation permits from the Ministry of Health and municipal patents are the most difficult tasks to carry out and those which take the most time.

Elfinancierocr.com reports that "...Despite the significant drop in informality reported between July 2015 and July 2016, four out of five employers (80%) say the government has not taken steps to reduce formal employment." 

According to the union, "... bureaucracy remains a major obstacle, even though the government has already taken some action. In 2015 the government pledged to reduce the time associated with obtaining operating permits from the Ministry of Health, which since 2011, has been described by the Uccaep as being the most complex. A year later, they had managed to improve 60 transactions in that category, decreasing by 80% the price paid for permits (going from $100 to $20) and also allowing automatic renewal for five years for companies."

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More on this topic

Costa Rica: Bureaucracy and Entrepreneurship

March 2013

Employers point to the thick web of paperwork that must be traversed in Costa Rica if you want to start a new business.

From a press release issued by the Costa Rican Union of Chambers and Associations in the Private Business Sector (UCCAEP):

Most entrepreneurs, according to the latest data from the Survey "Business Pulse" by the Costa Rican Union of Chambers and Associations of Private Business Sector (UCCAEP) indicate that in Costa Rica there are a number of constraints to the initiation of a new business in the country.

No Real Progress in Reducing Paperwork

October 2011

The Costa Rican government has announced successes in de-bureaucratizing the country, but employers say that in reality plans to make it happened haven’t actually been put into action.

The business sector does acknowledge that some progress has been made, but is asking for better coordination between the different entities involved in issuing permits.

The Industry of El Salvador Declaims Bureaucracy

September 2011

Industrialists have complained to the government about the excessive paperwork and arbitrariness of some officials, which is impeding trade.

Businesses unionized under the Salvadoran Association of Industrialists (ASI) presented their complaints about delays in carrying out routine procedures and in obtaining permits.

Bureaucracy: An Unsolvable Problem

August 2010

Since 1994, successive Costa Rican governments have said they will try to reduce bureaucracy but to date excess red tape remains a problem.

Laura Chinchila's new administration has also included bureaucracy among its list of priorities.

As an example, the current government gathered leaders from the Ministries for Trade (Comex), Health and Farming to discuss the optimization of trade agreements, which the La Prensa Libre editorial deems a good start. The paper says that the next step is to define specific actions to make procedural simplification a reality.

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