I originally posted the following information in response to a question on another bulletin board but thought it might be of general interest to readers here, as well.

There are many investment opportunities in Costa Rica, including starting or purchasing operating businesses and real property investments of every type, but be very careful! Many people come here, fall in love with the country, make local "friends" and go into business with them or follow advice from their new friends in making business or investment decisions. Many of these arrangements are made in good faith. Others are straight cons from the beginning. In either event, they usually turn out to be very poor investments.

At the minimum, you need to follow the same due diligence guidelines you would follow in the US, plus add a very healthy degree of skepticism and have the willingness and patience to deal with a cumbersome, frustrating bureaucratic system - as well as assuming the risks of a fragile, emerging economy which is largely dependent on the US economy, but where recessionary trends and other problems in the US economy are greatly amplified.

I'm not a prophet of gloom and doom, but I'm not very optimistic about the general short-term economic outlook here. This doesn't mean that it's a bad time to invest. Quite the opposite may be true, but it should color your judgment as to suitable investments. For example, I expect to see quite a few distress sales of certain businesses and real property investments by owners who don't have enough staying power or vision to weather the storm. By the way, there are always distress sales here. I define a real distress sale opportunity as one where you are purchasing at no more than 20 or 30 cents on the dollar, with sound prospects for the future and little or no negative cash flow. For me, negative cash flow is an absolute deal-killer unless I'm absolutely confident of a turnaround in the very short-term future.

Unless you are very familiar with the country and the cultural differences and are completely fluent in Spanish, you almost certainly need to rely on local advice and assistance from someone. This is where your greatest problem will come from. Who do you trust? The answer is "No One!" Assume that everyone you deal with is going to fall into one of two categories: Either they are going to lie, cheat and steal at every opportunity, or they are going to be well-intentioned, honest fools and dreamers who can't find their asses with both hands.

There are two common expressions here which capture the soul of the Costa Rican outlook on life - "Pura Vida" and "Mas o Menos" and they are used to describe almost every type of transaction or situation. The first can usually be taken to imply that you should relax, not take things too seriously, and have a good time whenever you can - a great attitude in many ways, but not a good way to run a business. The second literally means "more or less", and that is the way most things are done here.

Doing business with Gringo ex-pats who live here can be even more dangerous. The saying is that there are two types of Gringos who choose to live here - the wanted and the unwanted. Like most good humor, it's very close to the truth.

I'll leave you with one more bit of humor which also has the ring of truth - the definition of a "joint venture" is a business arrangement whereby one person with a lot of money and no experience, and another person with a lot of experience and no money, get together and change positions.

Pura Vida,
TG

PS. Sorry, I'm not in the investment business and I can't give you personal advice, so please don't ask.

TampaGringo,

I also live in the Tampa area and I am very experienced in buying and selling businesses in the US. Although I am not experienced with CR, it appears to me that many of the guys who contact me to buy a business in Florida could also be just as interested in CR if they new of the opportunities and had help from the US which they could trust. From your many years experience in CR, does this make any sense? If you think it does, would you like to meet in person to discuss how to make it happen?

TampaGringo's advice is spot on. I own several businesses in CR and it can be very challenging. It is very difficult to know who to trust, and if you are in business there, you must be prepared to visit often and frequently unannounced to keep everyone on their toes.

Having said this, the opportunities for a person of Western marketing mentality are broad and readily available. Just be very selective, as you have an entirely differnet set of laws and procedures.

A good example....Embezzlement (sp?) is not illegal. If you allow someone to have signature authority on your bank account, and they drain the account, it is your fault for giving them access to your funds, etc.

Lenny,

tampagringo can't answer because he is no longer a member of the board--that's why his name is in black, unlike the other clickable names.