Costa Rica is Consolidating Itself as a Near shoring Hub in Latin America ⋆ The Costa Rica News

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In a global context marked by the search for efficiency in the supply chain and geographic diversification, Costa Rica has emerged as a strategic destination for nearshoring in Latin America. According to the recent JLL report, “Nearshoring – Unveiling Latin America’s Potential,” Costa Rica stands out for its favorable business environment, its highly qualified workforce and its political stability, consolidating itself as a nerve center for global companies, especially in the life sciences and technology sectors.

The report highlights that Costa Rica is one of the most business-friendly countries in the region, thanks to its political stability and its commitment to transparency. This is reflected in the country’s high rating in key indicators such as country risk and ease of doing business. Costa Rica has created an environment conducive to foreign investment, supported by a competitive tax regime and a series of incentives for international investors.

A Hub for Life Sciences Costa Rica has become a regional hub for life sciences, attracting global companies such as Boston Scientific, Johnson & Johnson, and Pfizer, which have established significant operations in the country. The availability of a highly skilled workforce, with more than 60% of workers holding a college degree, has been a key factor in this attraction. Furthermore, Costa Rica’s commitment to sustainability and environmental conservation has aligned the country with the corporate sustainability goals of many of these companies.

Leading companies such as Roche, JLL, and Equifax have invested millions of dollars in establishing their shared services centers and operations in Costa Rica, taking advantage of the country’s advantages in terms of operating costs and proximity to North American markets. The continued expansion of these operations is a testament to Costa Rica’s success in attracting and retaining foreign investment.

The report assesses diverse Latin American markets based on several key indicators, including business environment, foreign investment history, labor availability and cost, real estate infrastructure, proximity to the U.S., and logistics performance. The results highlight the top players in each dimension, featuring case studies such as Costa Rica’s Life Sciences Center, Mexico’s industrial cluster, and Guatemala’s attractiveness for process outsourcing.

Key Findings Mexico stands out for its unrivaled location and economic size, serving as both an export hub and a destination market.

Brazil combines the best logistics performance with the region’s largest economy and population.

Costa Rica and Chile stand out for their favorable business environments and established foreign investment ecosystems.

Panama emerges as the region’s logistics hub.

Colombia shows strong performance across multiple dimensions.

Argentina and Peru are notable for their skilled and affordable labor.

Rodrigo Torres, JLL’s Director of Research for North Latin America, says: “This report should be interpreted as a data-driven overview of the diverse opportunities offered by Latin American countries. For specific relocation cases, JLL recommends an in-depth analysis that considers the company’s specific priorities, supply chain configuration and industry requirements.”

Which countries would benefit the most? JLL cites an IDB analysis that estimates the potential for increased exports to the US due to nearshoring. Mexico would be the main beneficiary with around $29 billion in additional exports per year. In relative terms, the main beneficiaries would be Panama, the Dominican Republic, Colombia and Peru, whose non-traditional exports would see double-digit increases due to this trend.

Benefits of Nearshoring Nearshoring offers notable advantages for companies considering expanding or outsourcing their operations in Latin America. First, cost efficiency is a significant benefit, as salaries and operating expenses in Latin American countries are typically lower compared to developed markets. Nearshoring also facilitates greater cultural alignment and offers opportunities for talent development, as similar time zones and cultural particularities lead to better collaboration and understanding. Additionally, nearshoring allows companies to optimize supply chains, reduce delivery times, and improve customer service by being closer to the end market.

Challenges and Opportunities Companies looking to take advantage of nearshoring in Latin America must consider challenges such as water scarcity, energy reliability, and security, especially in countries like Mexico. However, opportunities to increase supply chain efficiency, reduce delivery times, and improve customer service make Latin America an attractive option for nearshoring.

Notable Case Studies San Jose, Costa Rica: Transforming call centers into Shared Service Centers for large corporations such as Roche, Equifax, JLL, and Pfizer. Companies are investing significantly in infrastructure and employing thousands of people. Costa Rica has become a preferred destination for life sciences companies due to its skilled workforce, political stability, and commitment to sustainability.

Mexico: The automotive industry is leading the nearshoring trend, attracting significant investments from companies such as BMW, Ford, and Honda due to tariff stability and reduced transportation costs. Additionally, Mexico’s proximity to the U.S. allows for shorter transit times and lower shipping costs.

Guatemala: Emerging as a regional hub for call centers due to its low real estate costs and affordable wages, attracting companies looking to streamline their business processing operations.

Impact of Nearshoring in the Region Nearshoring offers a unique opportunity for U.S. companies considering relocating their operations to Latin America. Countries in the Northern Cone, such as Mexico and Guatemala, offer shorter distances to the U.S., resulting in shorter transit times and lower shipping costs. However, the region faces logistical challenges that must be overcome to take full advantage of these opportunities.

JLL’s report demonstrates that Latin America offers a unique opportunity for companies looking to diversify their production locations and minimize operational risks. With key markets such as Mexico, Brazil and Costa Rica leading the charge, the region is well positioned to attract foreign investment and foster economic growth.<img srcset="https://thecostaricanews.com/wp-content/uploads/2020/04/BANNER1-640x304.png 640w, https://thecostaricanews.com/wp-content/uploads/2020/04/BANNER1-300x143.png 300w, https://thecostaricanews.com/wp-content/uploads/2020/04/BANNER1-768x365.png 768w, https://thecostaricanews.com/wp-content/uploads/2020/04/BANNER1-696x331.png 696w, https://thecostaricanews.com/wp-content/uploads/2020/04/BANNER1-884x420.png 884w, https://thecostaricanews.com/wp-content/uploads/2020/04/BANNER1.png 1000w" fetchpriority="high" decoding="async" width="640" height="304" data-sizes="(max-width: 640px) 100vw, 640px" alt="Resonance Costa Rica" class="ezlazyload wp-image-85135" ezimgfmt="rs rscb1 src ng ngcb1" data-ezsrc="https://thecostaricanews.com/wp-content/uploads/2020/04/BANNER1-640x304.png"/>At Resonance, we aspire to live in harmony with the natural world as a reflection of our gratitude for life. Visit and subscribe at Resonance Costa Rica Youtube Channel https://youtube.com/@resonanceCR

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Costa Rica is Consolidating Itself as a Near shoring Hub in Latin America ⋆ The Costa Rica News

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