Costa Rican Free Zone

The free zone in Costa Rica is a set of tax incentives to attract companies to do business in the country. It creates a mutually beneficial relationship. Corporations invest in the country, provide employment to its citizens, and urbanize the area by creating roadways to businesses and much more. In return, companies are not required to pay any taxes to the Costa Rican government. The companies do not pay taxes on exports or yearly revenues.

However, there are requirements and obligations that businesses and corporations must meet that aligns with the country's sustainability goals. Costa Rica has a goal to reach carbon neutrality by 2021. This means they want to have a zero carbon footprint which requires decreasing the country's carbon emissions and using sustainable businesses practices including energy efficient technology and recycling processes. Therefore, many foreign corporations, especially those from the United States, must alter their corporate culture to align with the environmentally friendly and sustainability culture of Costa Rica.

Outsourcing has been a method used by Americam corporations to reduce cost. Wages in countries like Costa Rica are much lower than those in the United States. Therefore, the free zone is more beneficial than simply being a tax shelter. Companies can reduce the cost of labor by outsourcing jobs to a country with lower wages while saving money by not having to pay taxes in that country.

Today, we visited two companies in the free zone, VMWare and Thomson Reuters. VMWare is involved in data handling, security, and cloud storage. Thomson Reuters is involved in the sale of information. Their exports gather data and information. Then, they publish that information in texts or online databases which they then sell to consumers. The office buildings are multiple stories high so they've constructed the free zone upward instead of outward which decreases the amount of land it requires. Both companies have multiple recycling bins throughout their offices. Thomson Reuters offers transportation for their employees. This means employees do not have to drive their vehicles back and forth to work so this could substantially decrease carbon emissions made by their employees. Thomson Reuters also talked about opportunities for their employees to continue their education, volunteer, and a good work-life balance. This creates not only environmental sustainability but workforce sustainability. VMWare has five company values which include execution, passion, integrity, customers, and community. These values push them to align with the globization effort around the world while still maintaining sustainable business practices that are part of their corporate integrity and culture. It was obvious that they take a lot of pride in the work they do and that they continually work to live out those values on a daily basis.


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