In 2024, foreign direct investment into Costa Rica hit a record $4.3 billion — a 14% year-over-year increase. The United States accounted for 70% of it. Almost nobody is talking about this. That's precisely why you should be paying attention.
Costa Rica became the first Central American nation admitted to the OECD in 2021 — a milestone that required years of regulatory, governance, and transparency reforms. In 2025, the World Bank reclassified it as a high-income country [5]. These aren't vanity designations. They represent verifiable convergence with developed-market institutional standards that dramatically reduce the governance risk premium international investors typically assign to the region.
The credit trajectory tells the same story. Moody's upgraded Costa Rica to Ba2 with a positive outlook, Fitch holds it at BB with a positive outlook, and S&P rates it BB- with a positive outlook [8][9][10]. All three agencies are pointing in the same direction: toward investment grade.
The country successfully completed its IMF program in 2024, public debt has declined below 60% of GDP from 68% in 2021, and the government is running a primary surplus of 1.1–1.8% of GDP under a strict fiscal rule enacted in 2018 [3]. For context, Costa Rica has been among the fastest-growing OECD economies for two consecutive years.
The market is pricing this as an emerging market. The data shows it's converging toward developed-market status.
This is not a banana republic — literally. Precision and medical equipment now represent 44% of Costa Rica's total exports, growing at 14% annually. Total exports reached $30.6 billion in 2024, up 8% year-over-year [6]. IT and telecommunications account for 15% of service exports.
1. Free trade zone dominance
Free trade zones — home to 679 enrolled companies — generate 66% of the country's exports and attract 64% of FDI [7]. Intel alone employs 3,400+ people in-country and committed $1.07 billion in reinvestment over 2023–2025. Amazon, Dole, and Bayer maintain substantial operations.
2. Semiconductor and technology positioning
Costa Rica launched a national semiconductor roadmap in March 2024 and is in the CPTPP accession process, which began in November 2024 [11]. The country is actively building the institutional infrastructure for high-value manufacturing at a pace that regional peers cannot match.
3. Geographic diversification of FDI
In 2024, Costa Rica attracted 61 new FDI projects, 22 of which came from non-US sources — evidence of growing geographic diversification among investors. Over $240 million was deployed outside the Greater Metropolitan Area, signaling that development is beginning to decentralize [7].
Costa Rica has maintained a stable democracy since 1948 and has no standing army — a unique feature that eliminates an entire category of political risk that plagues regional peers. From a supply chain perspective, it is the most credible nearshoring alternative in Central America.
CAFTA-DR provides duty-free access to the US market. The country's workforce of 5.3 million is increasingly skilled in precision manufacturing, medical devices, and technology services. Unemployment hit a 10-year low of 6% in 2024, and inflation was just 0.84% — well below the 3% target [14].
Tourism adds another layer: 2.9 million visitors in 2024, 55% from the United States. Tourism FDI surged 113% year-over-year to over $600 million, representing 13.9% of total foreign investment [13]. This is a country with genuine multi-sector demand drivers — not a single-thesis investment.
A 10% tariff scenario on Costa Rican exports would create short-term volatility. The market treats this as disqualifying. We treat it as a repricing opportunity.
When tariff threats materialize — and they will — companies don't abandon CAFTA-DR supply chains. They accelerate diversification away from single-country exposure. Costa Rica's mix of OECD governance, CAFTA-DR market access, and skilled manufacturing workforce makes it structurally more valuable in tariff-volatile environments, not less.
The same pattern played out in Mexico: tariff announcements accelerated nearshoring investment, not the reverse. Costa Rica captures the same dynamic at an earlier — and cheaper — point in the repricing cycle.
Three systemic blind spots:
1. Institutional LPs benchmark Latin America through Mexico and Brazil
Most allocators with Latin American mandates have their exposure concentrated in the two largest economies. Costa Rica — despite OECD membership, investment-grade trajectory, and record FDI — doesn't appear on most allocation frameworks. The geography is underweighted relative to its institutional quality.
2. The infrastructure discount is overstated
Approximately 37% of roads are in poor condition, and logistics costs are elevated relative to Mexico [4]. The market prices this correctly. What it doesn't price correctly is the rate of improvement — and the fact that free trade zone infrastructure is already world-class. The risk is concentrated in specific sectors and geographies, not systemic.
3. Credit trajectory isn't modeled, only current rating
Standard allocation frameworks use current sovereign ratings as a binary filter. Costa Rica is BB- to Ba2 today — technically below investment grade. But three agencies with positive outlooks, a completed IMF program, declining debt-to-GDP, and a primary surplus is a convergence story, not a credit story. Buyers at current spreads are being compensated for risk that is actively diminishing.
What we're building toward:
Medical device manufacturers in established free trade zones. Precision manufacturing operations with existing US customer relationships. Technology services platforms benefiting from the skilled workforce. Tourism-adjacent real estate in a market with structural US demand and 113% FDI growth.
The best assets share a common profile: CAFTA-DR compliant operations, existing multinational customer relationships, and zero institutional documentation because they've never needed it. Most PE firms see that last point as a disqualifier. We see it as the entry price.
The primary fiscal headwind is the interest burden — at roughly 4.6% of GDP, it's the highest among BB-rated sovereigns [3]. Capital markets remain thin relative to developed peers, and exit pathways for private investments require careful structuring. Labor informality runs at roughly 40%, and productivity sits at 57% of the OECD average. Currency risk is real: roughly two-thirds of foreign exchange debt is unhedged. These are not dismissible concerns.
The thesis holds only for patient capital with a 5–10 year horizon that can structure around these constraints — not for allocators requiring near-term liquidity or benchmark-relative performance.
Most allocators are benchmarking Latin American exposure exclusively through Mexico and Brazil — both of which are already fully discovered and priced accordingly. Costa Rica offers OECD-caliber institutions, a diversified and growing export base, favorable US trade access, and structural nearshoring tailwinds — all at a discount to its trajectory.
The data suggests it's time to expand the aperture.
Lower middle market. Industrial focus. Geopolitical arbitrage.
Plocamium Holdings — Manufacturing resilience as an asset class.
[1] OECD Economic Survey: Costa Rica (2025) — oecd.org
[2] OECD FDI in Figures: Costa Rica (2024) — oecd.org
[3] IMF Article IV Consultation: Costa Rica (2024) — imf.org
[4] U.S. Department of State, Investment Climate Statement: Costa Rica (2024) — state.gov
[5] World Bank Country Classification Update (2025) — worldbank.org
[6] PROCOMER (Costa Rica Foreign Trade Promoter), FDI Annual Report (2024) — procomer.com
[7] CINDE (Costa Rica Investment Promotion Agency), Annual Results (2024) — cinde.org
[8] Moody's Investors Service, Costa Rica Credit Rating Action (September 2025) — moodys.com
[9] Fitch Ratings, Costa Rica Sovereign Rating (2025) — fitchratings.com
[10] S&P Global Ratings, Costa Rica Sovereign Rating (2025) — spglobal.com
[11] Costa Rica National Semiconductor Roadmap, Ministry of Foreign Trade (March 2024) — comex.go.cr
[12] UNCTAD World Investment Report (2024) — unctad.org
[13] ICT (Costa Rica Tourism Board), Tourism Statistics (2024) — ict.go.cr
[14] Central Bank of Costa Rica (BCCR), Inflation and Macroeconomic Data (2024) — bccr.fi.cr