High social charges, excessive regulations for businesses and the high price of labor are factors that prevent Costa Rica's economy from reaching its growth potential.
In Costa Rica, establishing a personally owned company without employees is up to three times more expensive than what it can cost in a country that belongs to the Organization for Economic Cooperation and Development (OECD).
The lack of incentives, the disorder to apply the legislation and the complexity of producing in areas that are surrounded by traditional crops, are some of the factors that hinder the development of organic agriculture in Costa Rica.
In the last decade, the area planted to organic agriculture has fallen. Data from the program of Accreditation and Registration in Agriculture (ARAO) specify that in 2010 the area amounted to 11,115 hectares and in 2019 fell to 8,832 hectares, equivalent to a decrease of 21%.
Although in 2019 the arrival of tourists to Costa Rica increased 4% compared to 2018, businessmen of the sector continue to face complex procedures to open a new business and the high costs of basic services.
Data from the Directorate General of Immigration and Foreigners, said that between 2018 and 2019 the number of foreign visitors who came to the country grew by 122 thousand, from 3.01 million to 3.14 million tourists.
Raising the quality of education, eliminating excessive paperwork and generating opportunities, not threats, for people to formalize their economic activities are the main demands of the Costa Rican business sector in the run-up to 2020.
Generating more employment and strengthening the business sector while the actions of the Executive, Legislative Assembly and the Judiciary are being implemented are some of the projects outlined for the first quarter of the year, according to the Costa Rican Union of Chambers and Associations of the Private Business Sector (UCCAEP).
Two months after the end of the rainy season, farmers in Costa Rica lament that the government has yet to execute the works needed to mitigate the effects of the droughts scheduled for next summer.
In the opinion of the producers, among the works that the government should have promoted during the current winter was the construction of water reservoirs and wells, as well as the cultivation of fodder to store animal feed, since there is the threat of a possible new drought.
Although in Costa Rica the procedures for approving new pesticides that enter the market should take a few weeks, there are processes that have not been processed for more than ten years, which prevents increasing and improving the supply of products.
The State Phytosanitary Service (SFE), which is part of the Ministry of Agriculture and Livestock, accumulates dozens of files that are still pending approval, including some that have been waiting for more than a decade.
As one of the measures that the Costa Rican government plans to implement is that it will no longer be necessary to have all the requirements to open a business certified, and only an affidavit will be necessary.
The government will implement a regulatory moratorium that will prevent the creation of new procedures, requirements or procedures to obtain permits, licenses or authorizations, which will apply until May 2022, according to an official source. This would be one of the guidelines that are part of the government's actions to lead the country to economic recovery.
Reducing social security contributions, lowering the price of electricity and simplifying procedures in the country are part of the changes proposed by Costa Rica's private sector to reactivate the economy.
Representatives of different productive sectors agree that immediate actions focused on improving the performance of the Costa Rican economy should be implemented.
Because of flaws in the estimates of costs of the work, in Costa Rica the Comptroller's Office declared unviable the tender to build a sports center, supposedly valued at $40 million.
In July 2016, the Solis administration announced explicitly that they were preparing to tender, at the beginning of 2017, the construction of a 25,000 square meter aquatic center and a 36,000 square meter sports center in San José, for a total cost of $40 million.
Although Costa Rica has a good image abroad, businessmen in the tourism sector with investment plans face long and complex procedures in public institutions.
Businessmen from the hotel sector believe that the growth rate of the construction of tourist infrastructure would be higher if the procedures in institutions such as the National Environmental Technical Secretariat (Setena), the Costa Rican Institute of Electricity and municipalities were speeded up.
Abolishing pre-certification inspection for industrial, commercial or service establishments in Costa Rica, a proposal is being made to reduce the period for processing health permits from 91 to 7 days.
From Procomer's statement:
The Ministry of Economy, Industry and Commerce (MEIC), the Foreign Trade Promoter of Costa Rica (PROCOMER) and the Ministry of Health issued Executive Decree No. 41435-S that abolishes the inspection prior to the granting of the certificate for industrial, commercial or service establishments, qualified as high health and environmental risk (risk group A).
A new information platform aims to identify the main disadvantages faced by companies that transport goods through the region in customs and paperwork management.
The Central American Economic Integration Secretariat (Sieca) presented the Trade Incidences Platform, which will compile information on the disadvantages that companies have in the areas of customs, transport, sanitary procedures, phytosanitary, import or export.
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.
According to theIII 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.
In only 30 of the 81 municipalities that grant construction permits in Costa Rica, all of the necessary procedures to obtain a permit can be performed through the official web platform.
The Federated Association of Engineers and Architects (CFIA) stated that in the analysis carried out during the first semester of the year, which included all of the municipalities in the country, what stands out is that of all the communes, construction permits are digital and physical in 40, 100% digital in 30 and in 11 there are only physical.
In Costa Rica, the law on incentives to import these types of vehicles has been in force for six months, but agencies are not able to take advantage of the exoneration because the Treasury has not yet adapted its customs computer system.
Although the "Law of Incentives and Promotion for Electric Transport" came into force six months ago, distributors are still facing obstacles to complete the importation processes under the new tax benefits scheme.
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