Bureaucracy Delays Small Investments

28% of the SMEs in Costa Rica stated that obtaining a municipal permit to start operations was the most complex procedure, while another 17% says that the process of registering with the department of Taxation is the most onerous.

Tuesday, September 25, 2018

According to the III National Survey of MSMEs, prepared by the State University at a Distance (UNED) and the University of Costa Rica (UCR), for micro, small and medium enterprises (MSMEs) obtaining a municipal patent for operation and registering as a new taxpayer, are the two procedures that most affect the start up of their operations.

Nacion.com reports that "...For 12% of the MSMEs, the main issue was registration as an employer with the Costa Rican Social Security Fund (CCSS). 'Regarding the time in months that it took to do these procedures, 68.6% indicated that it took between one and nine months, 16.3% indicated that it took more than 10 months,' says the survey released by the Ministry of Economy, Industry and Commerce (MEIC)."

In relation to other data on these companies, the article that adds " ... In terms of connectivity, 82% of the companies indicated having computers with access to the internet; when analyzing these results by size, 79.5% of micro-companies indicated that they had this provision, 90.2% of small companies had it and in the medium companies the figure was 93.3%. Regarding using the WhatsApp tool as a sales method, it is interesting to note that both microenterprises and medium ones indicated that 37% of them use it, and at a general level, 36.0% said they made sales through this medium."

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In the Kingdom of Bureaucracy

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The long processes to start a company in Costa Rica do not seem so bad for Latin America, but they are unacceptable at the international level.

When a country wants to enter the global market as a means for progress and economic and social development, it should offer expedited pathways for investors and entrepreneurs to start a business or to facilitate introducing their products and services to the economy.

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