Archives for January 2016

Private Insurance in Costa Rica – A Growing Market

insuranceThe need for insurance is something most ticos don´t think of. There is rarely an insurance culture in the Pura Vida land. Health care is provided by the State and it is an obligation for all employers to register their employees with the Caja Costarricense de Seguro Social. Car insurance is optional, and the “marchamo” (vehicle ownership and circulation tax) includes a small basic insurance on it. So, if you ask a tico about insurance, they will probably tell you it is not necessary.

However, we know insurance is a big thing for most foreigners, especially those that come from the U.S. Insurance was a government business in Costa Rica, only INS was allowed to sell insurance in the country up until 2010 when the country was forced to open up the insurance market to other companies, mostly as a result of the CAFTA negotiations. However, any insurance company that wants to do business in Costa Rica, has to be registered and approved by SUGESE, which is a government entity that oversees and regulates everything related with insurance.

In 2016 there are insurance options in Costa Rica with other companies besides INS, for example we now have Best Doctors, MAPFRE and Blue Cross Blue Shield. Yes, Blue Cross Blue Shield is now in Costa Rica, and we know what that means for most U.S. citizens living in Costa Rica.

In our research to find out more information about the different insurance options in Costa Rica, we came across El Hombre del Seguro, contact information is available at the bottom of the article. Oscar, comes from Venezuela and has over 20 years of experience in the insurance industry. He has been in Costa Rica since the insurance market opened up in 2010. El Hombre del Seguro (the Insurance Guy) sells insurance for MAPFRE, and Blue Cross Blue Shield in Costa Rica.

He mentioned that MAPFRE offers insurance for real estate, businesses, vehicles and travel/tourism insurance. On the other hand, Blue Cross Blue Shield came to the country with health insurance and life insurance. Something interesting about the Blue Cross Blue Shield insurance is that, if you are traveling from the U.S., probably your local insurance won´t cover you overseas. However, if you sign up from an insurance policy with Blue Cross Blue Shield Costa Rica, you will have international coverage for the full amount of your insured policy. Yes, you can transfer your Blue Cross Blue Shield insurance from the U.S. to Costa Rica and El Hombre del Seguro can help you with the process.

On future articles we will talk about the different insurance options available through this companies. It is great to know there are many insurance options in Costa Rica especially if you are planning on relocating in this piece of paradise.

For more information on insurance contact El Hombre del Seguro: Facebook: El Hombre del Seguro / Email: or.perfil.financiero@gmailcom / Skype: oscar.javier.rodriguez.yarnoz / Cel. (506) 8307-2519

Banca Kristal, First Women´s Bank of Costa Rica

Banca Kristal Costa RicaDecember usually comes with surprises and people are already waiting for them. Last December was not the exception in Costa Rica. For the first time in history, a banking institution exclusively for women was created in Costa Rica. A new idea that no one knows how it will turn out. It will have to compete against large banks like Banco Nacional and BAC San Jose, and their main catch will be the fact that it is bank for women.

Banca Kristal describes itself as a bank that was born to boost the potential of women through a financial offer which will cater all of their needs. They are also advertising the fact that they have capable financial advisers who will educate women in financial topics and the knowledge of offers, programs and digital tools the bank has available for all Costa Rican women.

Among the benefits this bank has to offer, they have cash back programs, referral programs and credit card promotions such as coupons, insurance and financial assistance. It also offer saving accounts programs for beauty, home maintenance, maternity, fashion, health, education, among others. They also advertising a special insurance for stolen bags, which seem to be an indispensable item for all women, at least it is for Costa Rican women, but that is topic for another article.  Most men always wonder how the ladies work magic out of those small bags!

Banca Kristal is a project executed by Banco de Costa Rica. The entity invested between $8 million and $10 million USD in the project from design to execution and opening of the 5 stores it has at the moment. Of course, there has been a lot of comments against the idea and the money invested. Some women have felt offended by the concept by considering it discriminates and creates segregation and that it gives the impression that women cannot invest in valuable things like real estate, only in beauty items and shoes.

On the other hand, the Banco de Costa Rica management team defends the concept of Banca Kristal and says it will be a space where women can come in with their kids with no waiting lines, playing areas for children and breast feeding rooms for moms to take care of their kids without the rush of a traditional banking system in Costa Rica, which can be crazy and hectic.

It will be interesting to see in the near future how the project turns out and what acceptance it has among Costa Rican women.

A New Way to Experience Adventure in Costa Rica

eco logoWhen thinking of Costa Rica most people won´t think about a corporate developed environment, although that is something that goes on in most of the Central Valley area. People think of monkeys, crocodiles, rain forest, beaches, surfing, fishing, zip lining and volcanos, just to name a few. One of the amazing things about Costa Rica is that travel time between adventures is short, and it looks like it is becoming even shorter.

Diamante Eco Adventure Park is, well, an adventure park located in Playa Matapalo, Guanacaste, right next to the RIU Hotel. Their goal is to provide as many adventure tours in a single location. With that in mind, they currently offer some 30 different activities like hanging bridges, kayaking, snorkeling, animal watching, walking and hiking, and a one of its kind in Costa Rica, a dual action zip line close to a mile in length and over 4,400 feet high. Talking about adrenaline, huh?

Diamante Eco Adventure Park is conveniently located to all the resorts, condos and residences from Papagayo Gulf, Ocotal, Coco Beach, Hermosa Beach, Liberia and all the surrounding areas. Still, Tamarindo, Flamingo, Potrero and all the Gold Coast towns are not that far away either.

Sounds enticing, doesn´t it? If you are already thinking about your visita to Diamante Eco Adventure Park, they have three packages available: Diamante Pass, Adrenaline Pass and Discovery Pass. Diamante Pass starts at $138 per person, it includes many adventure activies as well as must relaxed ones like bird and animal watching. Get ready for a full day of non-stop adventure. By the way, a buffet lunch. For the adventurous but not so interested in watching animals and plants, you can go for the Adrenaline Pass, it starts at $88 per person and you can be ready to have lots of fun and action. For the less adventurous, the Discovery Pass will be a good match. Watch animals, enjoy the gardens, relax at the beach. Want some adventure to go with it? Don´t worry, it includes one hour of mountain biking, one hour of kayaking and one hour of stand up paddle board. It does not include lunch, but the buffet is available for $14 per person. Additional tours can be added to any package.

Visiting Guanacaste, make sure you set a day aside and enjoy all the adventure Diamante Eco Adventure Park has to offer.


Reforma Procesal Laboral Has Been Finally Approved

solisThe government of President Luis Guillermo Solís had as one of their main goals for this term to have the Reforma Procesal Laboral Project back in Congress and get it approved. This plan to produce a major reformation on the process of how labor lawsuits are currently handled at the Costa Rican court houses. However, it had an article that legalized strikes and vital services such as health, police and other similar services. It had been vetoed by President Laura Chinchilla during her government.

Sure enough, as soon as President Solis came to power, he cancelled the veto imposed by President Chinchilla and the project was back on the legislative house. After a long road of approving it, and later having it banned by a Court house, the project finally came back to Congress in December of 2015 and in only six days, a record time for Costa Rican Congress, the project was approved.

On December 14th, 2015 the Reforma Procesal Laboral was approved with 41 favorable votes. One major change on the approved project is that the articles relating to strikes on vital services were left out and not approved. Some of the innovations which will come as a result of the new reformation is that labor lawsuits will be resolved quicker and employees will be able to get their unpaid benefits established by law faster than what they can today, which will save up resources for both the employers and the government by avoiding long processes which are rather simple. Also, employees who cannot afford a lawyer will now have the possibility to get a public defendant in case they needed.

This law will go into effect around mid-2016 so there is a lot to be learned by employers and government institutions. We will do our best to keep you informed about the upcoming and new learnings we discover along the way.

2016 Economic Projections for Costa Rica

Glass globe with stock chart

The productive sector in Costa Rica will face similar scenarios to those faced in 2015.  However, the results will depend on the approval of fiscal package (expected to be approved for a long time now) and some external factors. Macro prices will have a similar behavior to those of 2015, and the economic stability will prevail. The biggest thread continues to be the fiscal deficit, which, according to some economists, will come close to 6.6% in 2016.

Many economist believe that even if the tax package is not approved in 2016 the economic situation won´t be as bad as expected. However, in 2017 the situation would be severe. So this means, that if in year 2016 the expenses continue to grow over the income then the negative effects will be felt in 2017.

Prices for raw materials overseas will still remain low, but it is unknown how long this situation will last.

The productive sector and the Costa Rican Congress are in expectation of a proposal to reduce expenses which will complement the projects presented in 2015 to increase Government income; mainly by increasing income tax and setting in place a new aggregated value tax (IVA) – this last one does not exist in Costa Rica to date.

The recently announced increase in interest rates by the US Fed won´t cause a big impact in Costa Rica in 2016 as the Central Bank already announced that increase has been already discounted.

As for pricing index and production, the results for 2016 will be close to those of 2015, unless of course unexpected events arise. Inflation will jump up from the extraordinarily low levels it reached in 2015, but it will be closer to the lower end of the expected range by the Central Bank; the expected inflation by this authority is 3% to 5%. So, if the behavior is as expected inflation will be closer to 3% in 2016. Along this line, the prices for raw materials are expected to increase a little bit, which will put more pressure on the fiscal deficit.

Exchange rate is always an important matter, especially for foreigners looking to invest in Costa Rica. The dollar exchange rate for 2016 in Costa Rica is expected to be in between 510 and 545 colones per dollar. The exchange rate won´t experience in 2016 the factors which helped it decrease in 2015 such as money reserves from Eurobonds or the decrease in oil prices or the transfer of portfolios in dollars to colones.

The Tasa Básica Pasiva (TBP), which is the Costa Rican base interest rate to calculate the value of loans, will decrease mainly to the implementation of the metodological exchange system which will go into effect in February.

The growth of the GDP is expected to be a little under 4% which is the goal of the Costa Rican Central Bank. This estimation is very positive because it will move away from the low levels it experienced in 2015 which, had not been seen in the country in the prior 6 years.

In summary, for 2016 the economic projections for Costa Rica are as follows:

  • GDP – Highest 4.3%. Lowest 2.5%
  • TBP – Highest 6%. Lowest 3.6%
  • Exchange Rate – Highest 545 CRC. Lowest 510 CRC
  • Inflation – Highest 5%. Lowest 1%

* This post is a summary of an article from El Financiero, a Costa Rican financial newspaper.

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