Costa Rica continues to stand out in the region for both its political and economic stability.
Starting with the 2021 approval of a $1.778bn loan from the International Monetary Fund (IMF), with an immediate $296.5m release, a grant by the Inter-American Development Bank of two $250m loans, and the announcement of Costa Rica’s joining of the Organization for Economic Cooperation and Development (OECD) as its 38th member, the national continues its ascent as a regional economic power.
Following on from the country’s OECD entry in May 2021 came the March 2022 announcement by the UN International Trade Center that CINDES, Costa Rica’s investment promotion agency, had received its highest rating out of 85 organisations reviewed globally.
The trend continued with the June 2023 approval by the World Bank of a new $500m loan to strengthen support for the nation’s governmental budget.
Singled out internationally for its commitment to sustainability and biodiversity, in November 2022, Costa Rica became the first country to receive credit under the IMF’s Resilience and Sustainability Facility (RSF), with the IMF executive board approving a loan of approximately $710m.
In 2022, the nation also proved able to weather the economic uncertainty caused by a pair of cyber attacks by Russian ransomware groups, which targeted the computers of 27 government institutions and the country’s national health service, with the government the refusing to pay the $20m ransom and declaring a national emergency. Added support would later arrive in March 2023 from the US State Department, which granted $25m at the request of President Rodrigo Chaves to set up a security operations centre inside Costa Rica’s Ministry of Science, Innovation, Technology and Telecommunications, with a senior Biden administration official saying they believed the attacks were connected to Costa Rica’s ‘strong support for Ukraine’.
A surge in crime, with a 40% rise in homicides in 2023, has been another area of concern, with President Chaves proposing such measures as increasing prison terms for minors to the adult maximum sentence of 50 years and increasing the use of preventative detention.
However, with continued regional economic leadership, international support and the IMF projecting a 4% growth in GDP in 2024, Costa Rica’s relative stability was reflected by the observations of its legal market.
In the banking and finance sphere, firms interviewed described an uptick in energy project financing, particularly for wind farms. Respondent firms also noted a strong continuance of near shoring in the post-pandemic era. Teams predicted recent currency appreciation would also have an effect on interest in future financings, especially in the manufacturing sector.
In corporate and M&A, firms interviewed reported an uptick in M&A, and increased activity in the electronic and medical devices sectors, with the political stability of the country and the free trade zone regime continuing to be a draw.
In the dispute resolution arena, teams interviewed described a 2023-2024 resumption of pandemic-era workflow, and a spike in construction arbitrations. Firms indicated the holdover usage of virtual hearings post-pandemic posed some challenges with regards to ascertaining the veracity of testimony.
Intellectual property teams indicated an increased interest in matters related to AI, whilst noting the challenges of advising clients without legislative oversight.
In real estate matters, teams noted an increased interest by clients in making developments more sustainable. Firms also reported an interest in the outcome of the 2024 US presidential election and its effect on interest rates.
Key developments in the Costa Rican legal market include BLP’s January 2023 opening of a new office at Marina Flamingo on the nation’s Pacific coast and the March 2023 alliance between global powerhouses ECIJA, which has a growing presence in Central America, and Taylor Wessing LLP, with a special focus on TMT and lifesciences. Another major development is the June 2024 departure of former Arias intellectual property department heads Luis Diego Castro, María Del Pilar López and Simon Valverde to Eproint.
The market remains dominated by full-service regional firms Aguilar Castillo Love, Arias, BLP and Consortium Legal, while CENTRAL LAW Costa Rica, Lexincorp and Sfera Legal are also well-regarded Central American firms. Alta Batalla remains a growing force in the market, particularly following its May 2021 merger with firms in Guatemala, El Salvador and Honduras to form a regional entity. With its infusion of new personnel, Eproint now dominates the IP space alongside BLP; while other notable firms include labour specialists, BDS Asesores. A spin-off from COLBS Estudio Legal in September 2021, Tactic Legal has rebranded as Tactic Legal following its third-quarter 2024 merger with Guatemalan firm A. D. Sosa & Soto as part of an ongoing process to become a regional player; the new firm also has offices in El Salvador and Honduras.