Starting a business in Costa Rica

It is an eye-opening experience opening business in Costa Rica. Throw everything you have learned doing business in the First World out the window, and believe what other business owners tell you about, it is true.

It can take years to get a phone line in some parts of the country for example, but greasing the wheel, or knowing someone in the department, called nepotism, can get it done in days. Unfortunately your integrity is put to the test, and you have to decide if you want to play along and get things accomplished with a minimum of red tape, or suffer not wanting to give in to a corrupt system to teach them a lesson (as if!) I prefer the course of least resistance.

The most successful businesses involve paying Tico wages and expenses, but receiving gringo incomes. Tourism is a prime example; hotels, tours and car rentals. The laws are stacked against employers, with different taxes and employer fees coming at you seemingly every month. And don’t count on your employees to tell you they were overpaid. But this being said, wages in Costa Rica are about a quarter of those found in the First World, for the same work.

What I have to say is a generalization, and there are good and bad people in every population. If you can get a good, conscientious, punctual employee however, you are lucky, and I recommend you pay him or her a bit more to save a lot of aggravation later, loss of business, retraining someone else, etc. It seems precious few Ticos take real pride in their work, and often fail to see the need to get things done today, or ever.

I have had numerous dealings with Ticos in business. I know it is a cultural thing, but there are far too many without integrity. They live for the moment, forgetting that short term gain may be long term pain. Most see nothing wrong with not following through on their promises to you, then when they owe you, they make it difficult to collect. Never prepay a Tico, period, because not only will you lose your money, but you are stuck working their shift when they don’t show up for work.

If you go into business with one, watch the theft. They have been raised that there is nothing wrong with taking more than their share, embezzling included, knowing full-well, legal prosecution isn’t a viable option for you because (a) you are a gringo which is two strikes against you (b) it will take years and (c) the defendant won’t have any money to repay you even if you eventually did win.

Case in point as I write, today a gringo, Hans, who is leasing my restaurant/bar in Adventure Inn, discovered his partner, a Tica named Priscilla, had all of the restaurant/bar credit card payments automatically deposited directly into her own private account! Hans’ previous partner, Julio, another Tico, cleaned out all the bank accounts after being paid off by Hans to leave! It seems funny, but the majority of Ticos are their own worst enemies, often in the higher income brackets, and their cultural norms of behavior and lack of integrity and follow-up put them in a position of not being included in any international business negotiations. I do believe however, Ticas tend to have a greater amount of integrity and honesty than their male counterparts, though trust nobody, even gringos here in Costa Rica. Be forewarned! This ain’t Kansas, Todo!

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