COSTA RICA - ECONOMIC FREEDOM, CURRENCY STABILITY AND A TOP 15 POSITION WORLDWIDE (FRASER INSTITUTE 2025)

COSTA RICA: ECONOMIC FREEDOM, CURRENCY STABILITY AND A TOP 14 POSITION WORLDWIDE (FRASER INSTITUTE 2025)

These days, the latest report from the Fraser Institute reached me. It is a prestigious international study that has long been evaluating countries in terms of economic freedom, democracy, and the quality of their business environment. Naturally, I was very curious to see how my home country, Costa Rica, would perform in this comparison. Therefore, I have prepared a concise and accessible summary of the key findings of this respected analysis – from the perspective of Czech investors and entrepreneurs considering entering Latin America. It may come as a surprise that, according to the latest Economic Freedom of the World 2025 report, Costa Rica has ranked among the 14 freest economies in the world, while also securing the #1 position in all of Latin America. With an overall score of 7.85 out of 10, Costa Rica confirms its long-term reputation as a stable, open, and investment-friendly country. For Czech investors, this is not just a number on a chart – it is a clear confirmation that Costa Rica offers a stable and safe environment for capital, real estate projects, and business ventures.

WHAT THE ECONOMIC FREEDOM INDEX MEASURES AND WHY INVESTORS PAY ATTENTION

The Index evaluates five key areas that together form the backbone of every economy:

Size and involvement of government
Legal system and protection of property rights
Monetary stability (“sound money”)
Openness to international trade
Regulation of labour, business, and credit markets.

The higher a country’s score, the greater the freedom of capital – and the more stable investment returns tend to be. Historically, countries with high economic freedom enjoy higher household incomes, lower inflation, lower poverty, and longer life expectancy. For investors, this serves as a practical guide that highlights not only macroeconomic strength but also the quality of the environment in which they can safely allocate their funds.

WHERE COSTA RICA EXCELS – AND WHAT IT MEANS IN PRACTICE

Costa Rica has achieved outstanding results in the areas that matter most to investors. Let’s take a closer look at each pillar – and compare it with the Czech Republic.

1. SIZE OF GOVERNMENT

(Public spending, taxation, and the role of the state in the economy)

Smaller government involvement usually means lower taxes, less redistribution, and more space for the private sector. Costa Rica maintains a healthy balance – the state ensures infrastructure, healthcare, and education, while avoiding excessive interference in the business environment.

Costa Rica: around 7.5 / 10 – balanced fiscal policy, transparent budgeting.
Czech Republic: around 7.0 / 10 – higher tax burden and a larger state share in the economy.

For investors: Costa Rica offers more room for efficient private initiatives, particularly in the real estate and service sectors.

2. LEGAL SYSTEM AND PROPERTY RIGHTS

(Rule of law, judicial independence, stability of property ownership)

This pillar is fundamental for any investor considering property acquisition or company formation. Costa Rica has one of the oldest and most stable democracies in Latin America. In 1949, the country abolished its army and permanently committed to peace and civilian governance. This long-standing democratic and civilian framework creates an exceptionally stable environment for business and property investment. Costa Rica is also an active member of international organizations (such as the OECD and the World Trade Organization) and its legal structure fully aligns with global standards of commercial and investment law. Foreign investors can own property: directly as individuals, through companies (SRL – limited liability company, or S.A. – joint-stock company), or via trusts or holding structures. All transfers are notarized and registered in the National Property Registry, ensuring clear ownership records and minimizing the risk of duplication or disputes.

Costa Rica: 6.8 / 10 – stable legal framework, transparent ownership structure, though with historically slower administration.
Czech Republic: 7.7 / 10 – strong legal system and efficient digital land registry.

The difference between the two countries lies more in legal tradition than in investor protection. The Czech Republic, as an EU member, benefits from a highly developed judicial system, reflected in its higher score. Costa Rica’s slightly lower rating (6.8 / 10) is mainly due to slower administrative procedures in the past – not weaker property protection. In practice, it offers equivalent legal certainty and, in many cases, faster and more practical approval processes, especially for construction and investment projects.

3. MONETARY STABILITY (SOUND MONEY)

(Inflation, monetary policy, access to foreign currency)

This is where Costa Rica truly excels, ranking 4th in the world. Its currency (the colón) is stable, inflation is controlled, and monetary policy is credible. The country allows accounts in foreign currencies (USD, EUR), giving investors confidence in long-term planning.

Costa Rica: 9.5 / 10 – exceptional monetary stability, low inflation, no foreign exchange restrictions.
Czech Republic: 8.4 / 10 – strong currency, but with higher inflation in recent years.

Impact on investment: stable currency reduces exchange-rate risk, predictable interest rates make project financing easier, rental and sales revenues in USD remain stable. For real estate investors, this factor is crucial — a stable currency protects the real value of their capital.

4. FREEDOM OF INTERNATIONAL TRADE

(Tariffs, trade agreements, openness to foreign capital)

Costa Rica is one of the most open economies in Latin America, with trade agreements including both the United States and the European Union. This ensures easy import of materials and technologies and facilitates service exports.

Costa Rica: 8.5 / 10 – highly open economy, minimal barriers for investors.
Czech Republic: 8.9 / 10 – openness derived from EU membership.

For Czech investors: both economies are fully compatible. Capital transfer, know-how exchange, and business structures can operate between them smoothly and transparently.

5. REGULATION OF LABOUR, CREDIT, AND BUSINESS

(Ease of doing business, employment, and access to finance)

This pillar measures how difficult it is to start a business, obtain a license, hire staff, or secure credit. Costa Rica performs very well – it supports start-ups, foreign entrepreneurs, and development projects. Procedures are digitalized and straightforward. In the Czech Republic, especially for large projects in Prague, investors may wait five or more years for zoning and building permits. This is due to complex administrative processes requiring numerous approvals, environmental impact assessments (EIA), public hearings, and possible appeals. In Costa Rica, the situation is different. For standard projects (obra menor), basic permits can be obtained within a few working days, and larger developments typically within a few weeks. Permitting remains under municipal authority, but the process is being streamlined through public administration digitalization and improved institutional coordination.

Costa Rica: 7.0 / 10 – business-friendly environment, mildly slower offices.
Czech Republic: 7.1 / 10 – similar conditions, slightly faster administrative pace.

The difference is minimal – and for Czech investors accustomed to European bureaucracy, it is entirely acceptable.

WHAT IT MEANS FOR REAL ESTATE INVESTMENT

Valuation and Financing

Thanks to its high “sound money” rating, Costa Rica makes it easier to model returns (such as rental income, RevPAR, CAP rate) and long-term valuations. Low inflation volatility reduces discount rates and risk premiums, improving income stability and enabling highly accurate return forecasts — exceptional within Latin America. A stable currency also simplifies financing, as investors can use both local banks and dollar-denominated loans without major exchange-rate risk.

Predictable Returns

Low inflation and currency stability allow precise modeling of rental yields, income streams, and property valuations — critical for both residential and commercial sectors.

Growing Housing Demand

An expanding middle class, strong tourism, and advancing digitalization drive demand for both long-term and short-term accommodation.

Openness to Foreign Capital

Investors can enter directly or through local companies, repatriate profits abroad, and access local financing options.

Stable Legal Framework

Property rights protection and transparent rules ensure safety during land or property acquisitions. Sustainability and ESG Trends Costa Rica is among the world’s most environmentally progressive nations, enhancing the attractiveness of sustainable investments — from eco-resorts to “green” housing.

COSTA RICA – CALM STRENGTH FOR LONG-TERM CAPITAL

Costa Rica today stands as a synonym for stability, transparency, and business freedom. It combines Latin American vitality with a European legal framework and U.S.-style monetary stability.

From the perspective of a Czech investor, it offers a remarkable mix: a predictable environment, protection of capital, growth potential in a region opening up to the world. Costa Rica is not an exotic experiment – it is a strategic market for serious investors seeking secure capital appreciation outside Europe, in a country with clear rules, a stable economy, and high quality of life.

INVEST IN COSTA RICA WITH A TRUSTED PROFESSIONAL PARTNER

If you are looking for a stable and attractive destination for your real estate or business investments and are considering my home country, Costa Rica, I will be glad to assist you.

As a Costa Rican native with long-term professional experience in Europe, I understand not only the real estate market, but also the tourism sector, business environment, and local legal framework.

This unique combination of expertise and cultural insight allows me to be your reliable partner for a secure and successful investment in Costa Rica – whether you are planning a residential project, hotel development, or a strategic business venture in Latin America.

Let’s connect and explore how to grow your capital in a country that combines stability, opportunity, and an exceptional quality of life.

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