Foreign Investment and Commercial Agreements
Objectives
- Discuss investment structures
- Understand distribution and agency agreements
- Explain Free Trade Zone basics
Explanation
Costa Rica attracts foreign direct investment, often through the Free Trade Zone regime (Régimen de Zonas Francas), which grants tax incentives subject to requirements. Commercial agreements include distribution, agency, franchise and supply. Note: Costa Rica's former special protection for representatives of foreign companies (Law 4684) was significantly reduced by the CAFTA-DR framework; always check the current regime.
Free Trade Zone
A special regime granting tax and customs incentives.
“The company operates under the Free Trade Zone regime.”
distribution agreement
Contract where a distributor buys and resells products.
“We signed an exclusive distribution agreement.”
exclusivity
The right to be the only one in a territory or market.
“Exclusivity is limited to Central America.”
territory
The geographic area covered by a contract.
“The territory is Costa Rica and Panama.”
minimum purchase
The minimum quantity a distributor must buy.
“The minimum purchase is 5,000 units a year.”