Purchases by Costa Ricans generally are based on price, quality, technical specifications, convenience, and the availability of local product support or after-sales service. The Costa Rican Government does not play a role in determining product prices, except for gasoline and diesel at the pump, and public services such as bus fares, electricity rates, and taxi fares. To achieve large volume sales, Costa Rica should be considered as a base from which to sell to the larger Central American region. Costa Rica serves as a regional sales headquarters for Central American and Caribbean markets for several U.S. firms.
Sales catalogs, brochures, and labeled product ingredients, must be translated into Spanish. Payment terms for purchases above $4,000 are generally carried out through binding letters of credit. Open account payment terms are reserved generally for well-known and well-established customers. Insurance on accounts receivable is available through the Export-Import Bank of the United States. Cash payment for small purchases is standard practice.
Business in Costa Rica depends heavily on the establishment of personal relationships. The Costa Rican business community places great importance on personal contacts with foreign suppliers. New U.S. exporters should be prepared to travel to Costa Rica periodically, and to follow up with their customers and representatives regularly with phone calls, virtual meetings (after pandemic) and emails. A patient sales approach is preferred to a “hard sell.”
Trade Promotion and Advertising
Costa Rican newspapers are one of the best ways to promote sales. Diario Extra, a popular mass-market has the largest general circulation, La Nación is still the most influential newspaper while the weekly El Financiero and daily La República are primarily business focused. Diario La Teja is a popular mass-market newspaper, and online outlet CR Hoy has seen explosive growth to one million unique visitors a month.
Depending on the target market, advertising is also effective through magazines and online marketing. Organizations such as the Costa Rican‑American Chamber of Commerce (AmCham), the Chamber of Commerce of Costa Rica, and other specialized business associations offer possible targeted options for advertising. CS Costa Rica can work with you and a local partner to identify the channels best suited to meet your needs.
Trade Promotion:
In addition to the U.S. Department of Commerce’s export promotion programs, CS Costa Rica can also assist U.S. firms through trade missions, participation in local trade shows, matchmaking events, seminars, conferences, and business receptions. These programs are conducted periodically on a cost recovery basis with preapproved budgets.
There are a limited number of privately organized trade promotion events in Costa Rica that can be provided by the CS Costa Rica team as needed.
Pricing
The prices of imported products into Costa Rica are typically based on:
- The CIF value plus import taxes*,
- Customs agent fees,
- In country transportation costs, and
- Other product related costs.
* Under CAFTA, more than 80 percent of all U.S. non-agricultural goods and more than 50 percent of agricultural products imported to Costa Rica were duty-free as of January 1, 2009. Products that did not become duty-free at that time continue to have their duties reduced per schedule, as agreed under CAFTA. However, products are still subject to local taxes such as Consumption Tax-DAI- and Value Added Tax.
The Costa Rican Government established a “Canasta Básica”, a market basket of consumer products considered essential for the traditional household such as: foods, household cleaning supplies, school uniforms, shoes, basic construction products, agricultural chemicals, tools and medicines. The prices of these products are monitored to reflect current economic conditions. The “Canasta” is reviewed regularly and changed almost every year to reflect changes in popular consumption.
U.S. export pricing generally excludes the cost of U.S. domestic marketing, allowing a lower base price and providing more latitude for negotiating margins that attract Costa Rican distributors, and maintaining competitive pricing in the market. Virtually all exporters price their goods in dollars.
Sales Service/Customer Support
Product support and after‑sales service is usually provided through a local representative with the support of the U.S. exporter. The support is extremely important for both Costa Rican Government institutions and private purchasers.
Availability of maintenance contracts, identification of convenient repair facilities, as well as any required technical support, is expected by buyers. Service literature and contracts should be provided in Spanish. The proximity of the U.S. to Costa Rica provides U.S. exporters with the added flexibility to determine the most cost-effective, and efficient, product support arrangements.
Local Professional Services
Obtaining competent local legal representation is a critical step in starting a business, buying or selling real estate, applying for resident status, or making any type of significant investment in Costa Rica. Costa Rica’s legal system (based on Roman law) is considerably different from the United States legal system (with its roots in English common law).
The language differences present opportunities for serious miscommunications, sometimes with serious consequences. U.S. companies should retain the services of a bilingual attorney to avoid potential communication failures. In Costa Rica, many local attorneys have been trained in the U.S. and are experienced in both U.S. and local law. For more information on legal, accounting, product registration, transportation, or storage services, please see the Business Service Providers Section of the CS Costa Rica’s website. (https://2016.export.gov/costarica/businessserviceproviders/index.asp?bsp_cat=80120000)
Frequent visits or online meetings, communication and effective oversight of local legal representatives are important to ensure that action is taken in a timely manner.