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From Site Selection magazine, May 2024

The Evolution of an Economy

by Adam Bruns

023 saw the Costa Rican government cut off funding to private investment promotion agency CINDE ( and direct investment promotion responsibilities to Costa Rican foreign trade promotion agency PROCOMER ( Both are useful points of reference and sources of data for global companies.

But the upshot is, no matter who’s taking the helm in seeking out investment, investors continue to chart a course that seeks out Costa Rica for new operations in realms from life sciences to services to the semiconductor and electronics sector now looking to invest hundreds of billions of dollars around the world.

In 2022, according to the “Foreign Direct Investment in Latin America and the Caribbean 2023” report from the Economic Commission for Latin America and the Caribbean (ECLAC). Costa Rica saw the most FDI inflows in Central America. The country’s 2022 FDI inflow of $3.67 billion was the highest annual total ever recorded, following $3.6 billion in 2021. That’s nearly $7.3 billion over two years. The busiest sector in 2023 was manufacturing (68%) and the busiest country of FDI origin was the United States at 73%, though that proportion was down by 12% over the previous year while Switzerland’s share rose to 9%.

Medical equipment is the primary investor. Costa Rica in 2022 accounted for 52% of all medical equipment FDI across Latin America and the Caribbean. It’s a big reason Costa Rica’s total FDI stock as of the end of 2022 stood at nearly $57.4 billion. With more than 14 of the world’s top 30 original equipment manufacturers present in the country, Costa Rica is the second largest Latin American exporter of medical devices. Precision and medical equipment exports have maintained annual growth of 15% since 2010.

“As a country, we have had the opportunity to build for more than 28 years what is today one of the domestic economy’s major sectors, the life sciences industry,” said Marianela Urgellés, managing director of CINDE, in a February 2024 release announcing the organization’s participation in the MD&M 2024 conference in California. The country recorded exports worth US $7.6 billion in 2023. “Costa Rica’s proposition is based on already trained talent, a complete production ecosystem, and access to 3.5 billion people in the global market thanks to our platform of trade agreements and a robust network of key suppliers,” she said.

Another indicator of robust activity? Costa Rica’s FDI outflow (outward investment by Costa Rican enterprises in other countries) totaled $701 million in 2022, the highest level in a decade. 

J&J’s 3,000 New Jobs Lead the Pack

The largest investment by job creation Site Selection has tracked in Costa Rica in recent months is Johnson & Johnson MedTech’s planned manufacturing operation in Alajuela that is expected to add more than 19,000 sq. m. (204,520 sq. ft.) of manufacturing capacity and approximately 3,000 potential new jobs over the next three to five years.

Johnson & Johnson MedTech’s planned manufacturing operation in Alajuela Johnson & Johnson MedTech’s planned manufacturing operation in Alajuela could add as many as 3,000 new jobs.
Rendering courtesy of Johnson & Johnson MedTech

“Costa Rica is a highly strategic location where we have been present for 40 years, and our company has benefited greatly from the local talent from the country that has specialized experience in our industry,” said Gustavo Galá, international vice president of Johnson & Johnson MedTech Latin America, at the project announcement in September 2023. “We are confident that the manufacturing operation in Alajuela will significantly evolve our capabilities and maintain our growth trajectory in the long term.”

The company said the new plant will allow the manufacturing of products from all Johnson & Johnson MedTech franchises, with special emphasis on heart rhythm solutions and orthopedic products.

In early 2023, Freudenberg Medical, a global contract design and manufacturing provider (CDMO) to the medical device and biopharma industry, announced it had expanded cleanroom operations in Alajuela’s Coyol Free Zone with a new ISO Class 7 cleanroom for catheter manufacturing and assembly, molding, extrusion and packaging operations. “Costa Rica has grown as an important medical device cluster in recent years and Freudenberg Medical is part of that story,” said Dr. Mark Ostwald, CEO of Freudenberg Medical.

That story opened a new chapter in February 2024 when the company announced it will establish a second manufacturing site with an additional $25 million investment. Expected to become operational in the beginning of 2025, it will be dedicated to the assembly of high-volume minimally invasive catheters for electrophysiology, vascular and structural heart therapies and other medical devices that require high-precision manual assembly. In the first phase, the new facility will cover 50,000 sq. ft. and house three ISO 7 cleanrooms. Within three years of opening, a further 50,000 sq. ft. will be added, said the company, quadrupling Freudenberg Medical’s total footprint in Costa Rica.


Freudenberg First Employees Costa Rica “We are proud to be one of the first global CDMO partners in Costa Rica, having established our first production facility here more than 12 years ago,” said Dr. Mark Ostwald, CEO of Freudenberg Medical, on the company’s multiple expansions in the Coyol Free Zone in Alajuela. Shown here are a few of the company’s first employees in the country.
Photos courtesy of Freudenberg Medical

In October 2023, Pennsylvania-based TekniPlex Healthcare celebrated the recent 55,000-sq.-ft. expansion of its production facility in the Zeta Free Trade Zone in Cartago. The additional room is being utilized for new medical tubing extrusion lines, downstream equipment for assembly and other operations, and warehousing space. It was the third stage of a multi-stage expansion, which the company said, “helps further improve TekniPlex Healthcare’s business continuity capabilities — often a key factor in strategic partner selection where dual validation is critical — by building upon existing medical tubing manufacturing operations in the United States, Mexico, Europe and China.”

“For years, our facilities in Costa Rica have exemplified the advanced materials science and manufacturing capacities for which Tekni-Plex Healthcare is known throughout the world,” said Chris Qualters, CEO of TekniPlex Healthcare. For its part, CINDE saluted the company’s evolution: “We are pleased to have accompanied Tekni-Plex for the last 10 years in the development of its operation in Costa Rica,” said CINDE Managing Director Urgellés, calling the occasion a “cause for celebration for the entire life sciences sector, since the company is a direct supplier to leading original equipment manufacturers with a presence in this country and is therefore strengthening the industry for continued exporting of medical devices from Costa Rica.

Costa Rica’s economy is evolving too, with significant numbers of projects in digital technologies and corporate services and locations diversifying from the San José metro area even as Deloitte US in April announced a new finance, marketing and sales center in Escazu Village in the metro area. When CINDE released in September 2023 its report on 28 new projects through Q3 2023, Eric Scharf, president of CINDE’s board of directors, noted, “It is great news that nine of the companies have decided to set up in communities outside the greater metropolitan area such as Orotina, Turrialba, Puntarenas, Grecia, Puerto Viejo de Sarapiquí, Bagaces and Nicoya.”

The sector of the future may be semiconductors. Costa Rica has been known for its Intel assembly and testing operation for many years. Intel Costa Rica also has the largest finance team of the corporation anywhere in the world. The finance department at its Global Services Center went from having 29 employees in 1997 to more than 360 in 2021 and over 400 in 2023, with more growth projected this year. “In the last three years, Intel Costa Rica Finance has experienced 60% growth in its staff in more complex roles, especially in financial analysis, planning, advanced accounting policies, and acquisition support, among other areas,” said Miguel Rivera, financial director, Intel Costa Rica, in February. In Costa Rica overall, Intel has more than 3,300 employees and generates work for over 4,700 contractors.

U.S. Secretary of Commerce Gina Raimondo wants to see more from the sector. During a series of meetings in San José in March, met with Costa Rica’s Minister of Foreign Trade Manuel Tovar and Minister of Science, Innovation, Technology and Telecommunications Paula Bogantes to discuss “collaborative efforts to improve the overall semiconductor ecosystem through nearshoring supply chain capacity to the Western Hemisphere,” the Commerce Department stated. The U.S. State Department in July 2023 announced that, enabled by the International Technology Security and Innovation Fund (“ITSI” Fund), created by the CHIPS Act of 2022, it will partner with the Government of Costa Rica to explore opportunities to diversify and grow the global semiconductor ecosystem and create a more resilient, secure and sustainable global semiconductor value chain.

“The United States views Costa Rica as a partner in ensuring the semiconductor supply chain can keep pace with the digital transformation underway,” the State Department said. “This collaboration underscores the significant potential to expand this industry in Costa Rica to the benefit of the United States and Costa Rica.”


Life Sciences? Or The Science of LIFE?

CostaRicaMapOne reason Costa Rica is such a happy place may be its ratio of national parks to people and to overall land mass.
Map by Rainer Lesniewski: Getty Images

Among the 143 countries evaluated by the Gallup organization, Oxford University and the UN for the 2024 World Happiness Report released in March, Costa Rica is No. 12 in the world and No. 1 in Latin America.

The report this year focused on happiness across generations. That plays into Costa Rica’s reputation for trending younger (among those 30 and younger, the nation was No. 11 in the world) and for being one of the world’s best places to grow old. Costa Rica is home to one of the world’s “Blue Zones,” or areas where people live long, productive lives. Nicoya, an 80-mile peninsula on Costa Rica’s western coast, has an average life expectancy of 85, compared to 76.1 in the United States.

Adam Bruns
Editor in Chief of Site Selection magazine

Adam Bruns

Adam Bruns is editor in chief and head of publications for Site Selection, and before that has served as managing editor beginning in February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.


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