The Central-American economies are relatively small, but as a
sub-region, these countries are steadily moving towards prosperity.
The sub-region has not only reduced tariffs and inequality,
it's also increased exports, mainly through trade agreements
with the United States and the European Union. Here are some of the
reasons why Central America is on track to becoming a future big
Costa Rica boasts one of the sub-region's strongest social
and political environments for multinational companies, and an
exceptional work force. The country's stable mercantile and
banking regulations combined with high standard modern services,
create a secure environment for investors and corporations.
The second largest country in Central America is enjoying high
levels of commerce and trade, due to its advantageous geographical
location and its strategic free trade agreements with the USA,
Central America and the Caribbean. Also, incentives for investors
are worked in to government policy.
Over the last decade Panama has emerged as one of the leading
countries in which to do business in Central America. It has built
a robust economy and has a stable government. Panama is known as
the largest Free Trade Zone in the western hemisphere thanks to the
Panama Canal, its excellent geographical position and modern
banking facilities. These have prompted more than 80 national and
international banks to operate in the country.
The Dominican Republic hosts corporations from all over the
world thanks its targeted social and educational policies. Located
in the center of the Caribbean and at the crossroads of North,
Central and the South American markets, it has a highly-developed
free trade zone system. The Dominican Republic also has one of the
strongest telecommunications sectors of the sub-region, making it
easy to do business across all continents.
El Salvador, Guatemala, Honduras and Jamaica – the other
countries of Central America – also have lots to offer. In
fact, six of the eight nations participate in the CAFTA-DR Trade
Agreement with the United States, with the objective of eliminating
tariffs, reducing poverty, creating jobs and expanding regional
opportunities among other things.
Some controversial reforms and actions are essential to continue
strengthening Central American economies, and it's expected the
countries will continue to move towards higher levels productivity
Thinking of expanding to Central America?
Despite its status as one of the best-performing markets
globally, there are of course challenges alongside the
opportunities in Central America.
Bureaucracy: Everything from opening a bank account to
registering your company and gaining product approval can drag on
for months. This is due to highly administrative and bureaucratic
Labor environment: HR and payroll regulations vary across the
countries, so these jurisdictions can never be categorised as one
Tax compliance: A single tax misstep can trigger significant
liability, and the ability to settle tax litigation claims is
Key reasons why companies are choosing to invest in the
Institutional security and legal platforms, which allow for
effective medium-term planning.
The ability to adapt to – and adopt – the latest
The productivity-versus-cost ratio in Central America is
attractive for foreign companies.
In order for a company to survive in this rapidly evolving global economy, it must eventually expand at least a portion of its business operations overseas or across borders, to become a more lean and cost-efficient organization.
Uruguay has open and solid financial and banking systems and offers a business-friendly environment. No wonder why the country and its more than 10 free zones are attractive for many multinationals and investors.
Cuba adopted a new foreign investment law earlier this year that abolished duty-free zones and industrial parks while expanding areas for investment.
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