Costa Rica: Law to strengthen competitiveness to promote the attraction of investments outside the large metropolitan area | Denton

On May 23, 2022, the Law on Strengthening Territorial Competitiveness to Promote the Attraction of Investments Outside the Greater Metropolitan Area (GAM, for its acronym in Spanish) came into force.

This new law will apply to companies making new investments in the country outside the GAM, as long as the projects are new and registered under the terms regulated by the Free Zone Regime Law. This new law will also apply to companies outside the GAM related to public infrastructure and investment in human capital.

Some of its benefits include:

  • Social Development and Family Welfare Law: with the reform, public and private employers will benefit from a reduction in the employer contribution paid to Social
  • Development and Family Allowance Fund (FODESAF, for its acronym in Spanish), differentiated according to the number of years of operation:
    • Year 0-5: they will pay 5% on the total wages and salaries paid monthly to their workers.
    • Year 6-7: they will pay 1%.
    • Year 8: they will pay 2%.
    • From the 9th year: they will pay the general amount established for all private employers (currently 5%).
  • Framework Law of the Popular Bank for Savings and Community Development (Banco Popular): during the first ten years of operation, companies will pay a single contribution of 0.25% per month instead of the 0.50% per month ordered in the first paragraph of the article. As of the eleventh year of operation, they will be subject to the regular monthly contribution of 0.50%.
  • Law establishing the Common Institute for Social Assistance (IMAS, for its acronym in Spanish): the reform exempts employers operating outside the GAM from paying the contribution corresponding to 0.5% per month of the amounts paid to employees, during the first five years of operation and adding more than changes, so it will be as follows:
    • Year 0-5: will not pay.
    • Year 6-10: will pay 0.25% of their remuneration to IMAS.
    • From the 11th year: will pay the general contribution applicable to all employers in the private sector, which is currently 0.5%.
  • National Institute of Learning Framework Law: the payment of 1.5% on the total amount of payroll paid monthly by employers is modified so that the employers identified above pay 1% of the total amount of their monthly payroll for the first ten years of activity and, from the eleventh year of operation, they will be subject to the general percentage applicable to all employers in the private sector. Likewise, this addition limits the beneficiaries of this reform to new companies located in regions outside the GAM, with the exception of the territories of Palmares, Sarchí, Grecia, San Ramón and Naranjo, if they permanently generate at least 30 direct jobs. . or provide training, training or education programs to their employees and aspiring employees of the locations where the business is located.
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