Developing in Costa Rica: what international investors underestimate

Land price and construction cost are the easy numbers. The ones that decide a project’s return are permitting duration, logistics and the quality of local execution — and none of them appear in a feasibility spreadsheet unless somebody puts them there.

International investors arrive in Costa Rica with a model built on assumptions imported from another market. The assumptions are rarely wrong about materials or labour rates. They are almost always wrong about time.

Permitting is a programme, not a formality

Approvals in Costa Rica involve multiple institutions with their own sequences, review cycles and documentation standards. Treated as a box to tick after design, permitting becomes the critical path. Treated as a workstream with its own schedule, owner and risk register — started during concept design — it stops being the reason a project slips.

Logistics decides more than you think

Imported materials and FF&E carry lead times that dwarf installation durations. Customs, warehousing and site access on coastal and mountain sites add weeks that only appear in the programme if someone has built them in deliberately. On hospitality projects, this is usually the difference between opening on the announced date and opening on a revised one.

Local execution quality is not uniform

Costa Rica has excellent contractors and consultants. It also has contractors who price optimistically and manage reactively. Owner-side project management exists precisely to tell the difference before a contract is signed — through prequalification, reference checking and a bid analysis that compares scope, not just totals.

What we recommend

Model the programme before you model the return. Run technical due diligence on the site before the purchase closes. Appoint owner-side representation before the design contract, not after the first variation. The cost of doing this is a rounding error against the cost of not doing it.