Costa Rica’s tech sector is flourishing, marked by a vibrant community of startups and established tech players. The country boasts a highly skilled workforce, nurtured by a strong network of universities and technical institutions. Costa Rica’s strategic location in Central America, coupled with its stable economy and favorable business climate, positions it as an attractive hub for tech companies looking to expand or collaborate in the region.

Cost Advantage:

Percentage Range	30% – 60%
Compared to	USA Talent Market

Talent Market:

Pool Size	45,000
Annual Growth Rate	5% – 7%

Work Week:

Weekly Hours

36 to 48 hours

English Level:

Rank

38

Public and Local Holidays:

Total Days

11 Days

Average Retention Rates:

Years

3 to 5 Years

Cultural Compatibility:

Compatibility

Strong

Global Brands that Hire in Peru:

Companies

Intel, Amazon, IBM, and Microsoft,

USA Working Hours Overlap:

Hours Overlap

From November to mid-March, the time is the equivalent of Central Standard Time (CST) in the United States.

OVERVIEW: 

Capital	San José
Currency	Costa Rican colón (CRC)
Languages	Spanish
Payroll Frequency	Monthly
GDP per Capita	$13,089.86
Employer Tax	26.5%

An Overview of Costa Rica’s Talent Market

Market Growth	Costa Rica has demonstrated robust economic growth with a focus on high-tech investments. The country recorded a GDP growth of 7.6% in 2021 and 4.3% in 2022, with projections indicating a growth rate of 4.2% for 2023. This growth is reflective of Costa Rica’s efforts in attracting high-tech manufacturers and investors, particularly in the semiconductor, electronics, and medical device sectors, highlighting a significant market for the software development industry as well?
Talent Pool	Costa Rica’s emphasis on education, particularly in STEM fields, coupled with its focus on English-language instruction, contributes to a well-educated labor force. This educational framework supports the development of a skilled talent pool necessary for the burgeoning tech sector, mirroring the relationship between economic trends and talent development observed in Peru’s construction sector?
Cost Efficiency	The country’s competitive cost structure is implied through its lower GDP per capita relative to global averages. The economic landscape in Costa Rica, characterized by lower levels of corruption and attractive free trade zone incentives.
Ease of Business	Costa Rica offers a favorable environment for business, underscored by its stable economy, ongoing investments in infrastructure, and governmental efforts to pursue new free trade agreements. The country’s business-friendly climate is further enhanced by CAFTA-DR, which has eliminated most tariffs for non-agricultural imports and aims to make trade and investment more attractive
Time Zone Alignment	Costa Rica’s strategic geographic location offers favorable time zone alignment with the US, facilitating seamless collaboration between businesses in both countries.
Work Hours Trends	Costa Rica’s adoption of digital technologies and its cultural emphasis on work-life balance suggest a flexible and modern work culture, likely featuring standard work hours with an openness to remote work and flexible scheduling.
Holidays and Breaks	Costa Rica recognizes a range of public holidays and is known for valuing work-life balance, which contributes positively to employee satisfaction and productivity, aligning with global standards for holidays and breaks.
Hiring Methods	Reflecting broader economic trends towards digitalization, Costa Rica is increasingly adopting modern hiring methods. This includes leveraging online platforms, digital tools, and networks to attract and recruit tech talent, in line with global hiring practices.
Payment Solutions	In keeping with its drive towards a digital economy, Costa Rica is increasingly embracing modern payment solutions, focusing on enhancing security and the speed of transactions, thus aligning with international standards.
Cultural Alignment	Costa Rica’s dedication to innovation, sustainability, and high-quality outcomes demonstrates a cultural alignment that is attractive to US companies. The emphasis on hard work, quality, and sustainability resonates with global tech companies looking for reliable and ethically aligned partners.
Retention Rates	The country’s positive economic indicators, focus on education, and quality of life suggest a potentially stable and attractive environment for tech employees, likely fostering high retention rates.
Notable Employers	Costa Rica is home to a dynamic market that attracts notable employers across various sectors, including tech. Multinational companies and startups alike are drawn to the country’s educated workforce, innovative climate, and strategic location, contributing to a vibrant employment landscape.

Costa Rica at a Glance

Costa Rica is known for its strong democracy, close ties with the United States, and a growing economy, which has been attracting high-tech investments, especially in sectors like semiconductors, electronics, and medical devices. The country enjoys a high education level and English-language proficiency among its workforce, relatively low corruption levels, and geographic proximity to the U.S., making it appealing to investors and exporters. With a well-educated labor force and incentives in free trade zones, Costa Rica has become a hub for multinational companies.

Despite facing challenges like a persistent fiscal deficit and the need for infrastructure upgrades, Costa Rica’s economy continues to expand, supported by new trade agreements and foreign investment, particularly from the U.S., which is its largest trade and investment partner. The country has also joined the OECD, further integrating it into the global economy.

Costa Rica’s tech talent market is vibrant, benefiting from these economic conditions and the government’s focus on attracting high-tech manufacturing. The presence of over 250 U.S. companies employing more than 150,000 people highlights the country’s role as a significant location for tech talent in Latin America. This makes Costa Rica not only a beautiful place to visit but also a thriving spot for technology and innovation talent.

Why Costa Rica’s Developers Are on the Global Radar

Costa Rica is becoming a favorite spot for companies from North America and Europe to find tech talent. This country has a big group of skilled people who know a lot about technology, including software development, cloud computing, and cybersecurity. Here’s why businesses are interested in Costa Rica’s tech talent:

Lots of Tech Professionals: Costa Rica has around 45,000 tech experts, especially in big tech cities like San Jose, Heredia, Alajuela, and Cartago. San Jose is even ranked as one of the top three cities in Latin America for the skills and number of tech people, along with Sao Paolo and Santiago.

Diverse Skills: The tech experts in Costa Rica are good at many different tech areas. Many know how to use more than one programming language. The most common languages are JavaScript and Java, with thousands of developers skilled in these. Other popular skills include C#, Python, .NET, and C++.

English Proficiency: When companies set up tech teams in other countries, they often worry about communication problems. But in Costa Rica, companies find it easier to work with local developers because they speak English well. The EF English Proficiency Index shows that Costa Rican tech workers are good at English, which means less confusion for businesses working with local teams and international partners.

Costa Rica’s tech scene is booming with skilled individuals who are versatile in their expertise, making it an attractive destination for businesses looking to expand their tech teams.

Costa Rica’s Tech Infrastructure

Costa Rica is becoming a favorite spot for companies looking to outsource their software development because it’s really good at adopting new technologies and has a strong tech setup. It ranks among the top seven in Latin America and the Caribbean on the Global Innovation Index. 

This means it’s doing better than most in the region in several areas like how its institutions work, the quality of its human resources and research activities, its tech knowledge, how sophisticated its businesses are, and its overall infrastructure. Especially noteworthy is that over 81% of Costa Ricans are online, which is a lot compared to other countries where outsourcing is common. For instance, in India, less than half the population uses the internet.

How Costa Rica’s Tech Vendors Are Shaping Global Software Solutions

In Costa Rica, businesses looking for tech help have a lot of choices. There are over 135 companies ready to partner with firms from all over the country. Here’s a quick look at what these Costa Rican tech companies are like:

• Size: Most tech companies in Costa Rica are quite small, with about 66% having fewer than 50 tech experts. About 24% have up to 250 tech experts, and around 10% are considered midsize, with 250 to 999 tech pros.
• Services: These companies offer a wide range of IT services. More than 40% build custom software and mobile apps, while around 36% specialize in web applications. Around 20% offer IT-managed services like tech support and network management. They’re also into IT consulting, including strategy and cloud advice.
• Industries: They mostly work with financial services, IT, and healthcare sectors. They also have clients in e-commerce, business services, consumer products, education, marketing, and retail.
• Clients: These tech vendors serve all sizes of businesses, mainly focusing on midsize and small companies with revenues up to $1B. Some also work with large enterprises.

Costa Rica’s tech scene is vibrant, with a wide range of services and expertise, making it a go-to for companies seeking quality software development and IT services.

Government Initiatives to Connect Costa Rican Tech with Global Markets

The Costa Rican government is really pushing for growth in the tech sector. They’ve set up some programs to help tech companies and research:

• The National Council for Scientific and Technological Research (CONICIT) gives money and support to tech research projects. This can be for new startups or big companies that are working on research and development.
• Costa Rican Coalition for Development Initiatives  (CINDE) tries to get foreign companies to invest and set up shop in Costa Rica. They help with the legal stuff, getting permits, and finding a good spot for companies to operate.
• They’re also working on an AI strategy with UNESCO, aiming to develop artificial intelligence in a way that’s ethical and responsible.

When it comes to where all this tech action is happening, there are a few key places:

• San Jose: The capital city is bustling with tech companies and big names like Microsoft, IBM, and Intel have research and development centers here.
• Heredia: This area is known for high-tech fields like biotechnology and hosts big international companies like Amazon, Cisco, and Procter & Gamble.
• Alajuela: Here, you’ll find experts in fintech, digital marketing, and cybersecurity.
• Cartago: Known for its software development, IT services, and engineering expertise.

These cities are tech hotspots because they have lots of coworking spaces, training programs, and tech events, making them attractive for tech talent and companies.

Insights into Hourly Rates by City in Costa Rica

Software developers in Costa Rica make an average of CRC 3,365 per hour, which is about USD 6.44. This rate is lower compared to software developers in the US, who make an average of USD 102 per hour. The cost to hire software developers in Costa Rica can change based on their experience, skills, and where they are located. 

Several factors affect how much software developers make in Costa Rica, including how many developers are available, how much demand there is for software development, the quality of education, and the country’s overall business environment. Costa Rica is becoming more popular for software development outsourcing because it has a lot of tech talent, is in a similar time zone to the US, and has a stable political and economic situation.

City	Annual Hourly Rate (CRC)
San Jose	CRC 12,000
Limon	CRC 9,000
Puntarenas	CRC 8,000
Heredia	CRC 11,000
Alajuela	CRC 10,000
Cartago	CRC 9,500
Guanacaste	CRC 8,500
Liberia	CRC 8,500
Puriscal	CRC 8,000
Turrialba	CRC 8,000

A Breakdown of Living Costs in Costa Rica

Living in Costa Rica can be more affordable compared to many Western countries. For families and individuals considering the move, here’s a breakdown of what you might expect in terms of costs:

• Housing: Rent varies greatly depending on location and lifestyle preferences. You could rent a furnished apartment in a high-demand area for about $1,154 per month or opt for a more modest accommodation in a normal area at around $666 per month. Purchasing property is also an option, with two-bedroom condos available under $100,000, although luxury properties can significantly exceed this.
• Food: Daily meals are affordable, with lunch in the business district costing around $14 and a combo meal at a fast-food restaurant about $8. Grocery prices are reasonable; for example, a liter of milk costs around $2.02, and fresh produce and staples like rice and beans are widely available at low costs.
• Utilities and Internet: Monthly utilities for two people in an 85m2 apartment might come to about $72, and internet service can be around $26 per month.
• Transportation: Owning a car can be expensive, with new vehicles priced significantly higher than in some other countries. However, public transport and taxis offer more economical alternatives for getting around.
• Lifestyle: Dining out and entertainment are also accessible, with meals at inexpensive restaurants starting around $3 to $10. For those enjoying fitness, monthly gym memberships can be found at an average of about $29.

Essential Rights and Regulations for Workers in Costa Rica

In Costa Rica, known for its beautiful nature, there are clear rules for work that help keep things fair for everyone. Here’s a simple explanation:

Work Hours

There are three main kinds of work schedules:

• Day Shift: You can work up to 48 hours a week, or 8 hours a day.
• Night Shift: You can work up to 36 hours a week, or 6 hours at night.
•  Mixed Shift: You can work up to 42 hours a week, around 7 hours a day.

Notice Period

If your job is ending, your boss has to tell you ahead of time. The warning time depends on how long you’ve worked there:

•   1 week if you’ve been there 3-6 months.
•   2 weeks if you’ve been there 6-12 months.
•   1 month if you’ve been there more than a year.

If they don’t want you to work during that time, they have to pay you for it, based on your average pay over the last six months.

Severance Pay

If you lose your job without a good reason, your boss has to pay you extra. How much you get depends on how long you worked there.

Equality

Discrimination is not allowed. Everyone should be treated equally at work, no matter their race, gender, religion, or beliefs.

Costa Rica’s work laws are there to make sure workers are treated fairly, paid properly, and can enjoy a good balance between work and life.

Payroll Procedures and Regulations

Payroll Cycle

In Costa Rica, employees are paid on a monthly basis.

Minimum Wage

The minimum wage for workers ranges widely from CRC10,875.11 daily for unskilled workers to CRC696,873.72 for technical workers or university graduates.

Overtime Pay

Standard work hours are 8 hours per day, up to 48 hours per week. Overtime is allowed under specific conditions, paying 50% more than the regular wage. For holidays, the pay doubles.

13th Month Pay

Employees are entitled to a mandatory 13th-month salary in Costa Rica.

Employee Benefits

Benefits include health insurance, pension schemes, bonuses, various leaves, and allowances.

VAT

The standard rate of Value-Added Tax (VAT) in Costa Rica is 13%.

Taxes

Employers and employees both contribute to various taxes and social security, including health and maternity, pension schemes, and more, with rates varying by the specific contribution.

Employer Payroll Tax Contributions:

Type of Contribution	Contribution
Health and Maternity	9.25%
Basic Pension Scheme	5.25%
Banco Popular Employer Fee	0.25%
Family Assignations	5.0%
Social Aid (IMAS)	0.5%
INA	1.5%
Labor Capitalization Fund	3.00%
Complementary Pension Fund	0.5%
National Insurance Institute (INS)	1.0%

Employee Payroll Tax Contributions:

Category	Contribution
Medical and Maternity	5.5%
Disability, Old age and Death Benefits	4%
Workman’s Savings	1%

Employee Income Tax:

Annual Income (CRC)	Tax Rate
0 to 3,836,000	0%
3,836,000 to 5,729,000	10%
5,729,000 to 9,555,000	15%
9,555,000 to 19,150,000	20%
19,150,000 and above	25%

CRC refers to Costa Rica Colones.

Exploring Top Job Listing Platforms in Costa Rica

Looking for a job in Costa Rica? There are several websites that can help you find the right job:

• LinkedIn: This is a global site where professionals connect, and it’s also great for finding jobs in Costa Rica.
• Computrabajo: A big job site in Latin America, including Costa Rica, with many job listings in various industries.
• GigaJob: Offers high-quality job opportunities in Costa Rica and lets you post your resume for free.
• Indeed: A worldwide job search site that has lots of job listings in Costa Rica across different fields.
• Glassdoor: Not just for job searching, Glassdoor gives you insights like salary information and company reviews, making it really popular in Costa Rica.

These sites make it easier to find job openings and company information, so you can apply for jobs that fit you best.

How to Hire the Best Talent for Your Business

Here’s a simplified guide on hiring talent in Costa Rica:

Start a Subsidiary

• What it means: You create a separate company in Costa Rica.
• Good for: Showing strong local presence; long-term plans in Costa Rica.
• Not so good because: It costs a lot of money and takes a lot of time.

Hire Contractors

• What it means: You pay people for specific jobs without them being your employees.
• Good for: Short projects or tasks; saving on employee costs.
• Not so good because: You can’t control them like employees; legal problems if you classify them wrong.

Use an Employer of Record (EOR) like Skuad

• What it means: Skuad takes care of hiring, pay, and law stuff, so you focus on business.
• Good for: Getting into the market fast; avoiding legal trouble; saving money on global expansion.

Costa Rica is becoming a tech hotspot with more international companies coming in. There’s a growing need for experts in software, cybersecurity, and data analysis. Speaking English is a big plus, especially in customer service and tech roles. Companies really want bilingual people who can speak both English and Spanish.

You’ve got several ways to hire in Costa Rica depending on your company’s needs and goals. The tech scene is booming, and bilingual talent is in high demand.

Understanding Leave Policies in Costa Rica

Here’s a simplified overview of leave policies in Costa Rica:

Paid Leave

• Entitlement: Employees get 15 days off after working for 50 weeks.
• Splitting Vacations: These days can be divided into two parts.
• Unused Days: If there are any vacation days left when leaving a job, employees are paid for these, based on their average salary from the last six months.

Sick Leave

• Policy: Paid sick leave is provided for illnesses or injuries.
• Duration: Determined by Costa Rica’s social security.
• Payment: The social security covers 50% of the salary for the first three days, and from the fourth day, it covers 60%. The employer pays the difference only for the first three days.

Maternity Leave

• Length: Four months, split as one month before and three months after childbirth.
• Payment: Employers pay 50% of the salary, and Social Security covers the rest.
• Extension: Possible with a doctor’s approval.

Paternity Leave

• Entitlement: All biological fathers qualify.
• Duration: Two days of paid leave per week for the first month after a child’s birth.

Public Holidays

• Employees are entitled to designated public holidays.

Source: https://publicholidays.co.cr/2024-dates/

These policies ensure that employees in Costa Rica receive adequate time off for vacation, sickness, and family matters, contributing to a balanced work-life environment.

Conclusion

Costa Rica’s talent market is vibrant and growing, particularly in the tech sector. With an average hourly wage significantly lower than in the US, Costa Rica offers an attractive cost-benefit for companies looking to outsource software development. The country has a large pool of skilled professionals, including software developers with a range of expertise from JavaScript to Python. 

The ease of communication due to high English proficiency among ICT specialists, combined with a close time zone to the US, stable political and economic environment, and supportive government initiatives, makes Costa Rica an appealing destination for nearshore development projects. Additionally, Costa Rica’s labor laws provide clear guidelines on working hours, minimum wage, and leave policies, ensuring a fair and compliant hiring process. Overall, Costa Rica presents a compelling option for businesses seeking quality talent in a nearshore location.