Podcast Audio Transcript
Alisha: Hello listeners, this is Alisha; thank you for tuning in to yet another exciting and informative podcast from us at Infosys BPM. Today, we are discussing about why the IT services market is booming in Costa Rica. And to talk about this, we have here with us, Sharad Choudhary, Sr. Regional Center Head – Costa Rica. Welcome Sharad. How are you?
Sharad: Pura vida, Alisha. Thank you for having me.
Alisha: For a long time, I believe Costa Rica used to be known as a retirement and travel destination. Has the country moved on from that reputation and become a hub for IT services now?
Sharad: Good question, Alisha. Yes, when we hear about Costa Rica, we are immediately reminded of its biodiversity, beaches, and its verdant nature. But these aspects are no longer its only highlights.
Now, Costa Rica is the preferred offshoring destination for large companies and is effectively exporting IT services to North America, Asia, and Europe. IT service exports are fast becoming a major portion of Costa Rica’s GDP. Almost $5 billion of Costa Rica’s revenue is from IT-enabled services exports.
As an example, one of the booming sectors in which Costa Rica delivers IT services is telecommunications. With significant wireless and wired coverage across the country, communication has become very easy today. So, outsourcing your operations to Costa Rica can be quite a game-changer today in terms of cost and distance.
Alisha: That sounds very exciting, Sharad.
Every country known for outsourcing has its own specific advantages that clients are looking for. Could you elaborate on some of the advantages for outsourcing IT services to Costa Rica?
Sharad: Sure. Firstly, I would say one of the key reasons why Costa Rica is preferrable for IT services outsourcing is the communication infrastructure I mentioned earlier. With the last-mile connectivity available in the nation, we are able to communicate effectively across different time zones. That is a key advantage for our clients and vendors.
Costa Rica also enjoys an ideal geographical location. Besides, having a thriving developer community is an advantage for Costa Rica as it lowers costs compared to Eastern Europe and Asia.
Costa Rica is also perceived as the 5th best destination for business services in the world, according to Deloitte. The country is home to several prominent Fortune 500 companies. According to estimates released by the Inter-American Development Bank, San Jose, the capital of Costa Rica, will become one of the five essential poles of the global software industry by 2025. Also, it’s interesting to note that Costa Rica is already touted as the “Silicon Valley” of Latin America.
Alisha: Silicon Valley of Latin America – that has a zing to it!
For any kind of business, a conducive regulatory environment is quite essential. In the case of Costa Rica, is it the same?
Sharad: Absolutely. Costa Rica is not only benefitted by its location, but also its favorable tax regime.
Costa Rica offers free trade zones, which provide lucrative incentives for foreign investors and companies. Because of this, companies operating in the country can achieve significant cost savings. We have also seen the elimination of import duties on raw materials, corporate income tax, export taxes, and capital taxes that typically account for a majority of expenses for businesses.
Companies can recognize more benefits as well, should they comply with all local and national regulations. Moreover, tax savings increase when organizations re-invest in the local industry. Costa Rica is also benefitted by a set of Free Trade Agreements (FTAs) with countries like the USA, Canada, China, EU, Mexico, Singapore, and South Korea.
Alisha: Sounds very exciting, Sharad.
Talking about the workforce of the country. Do you face any challenge in finding and retaining talent?
Sharad: As you know, a young and talented workforce is an important asset for any organization.
The World Economic Forum ranks Costa Rica as the top destination for high-quality human capital. Costa Rica achieves this by focusing on improving English language skills and bolstering educational innovation. Multilingualism is crucial to the service offerings in Costa Rica, which is validated by its 2nd rank across LATAM in the 2021 English Proficiency Index. The human capital of Costa Rica makes it very easy to deliver agility in our operations.
So, I would say it’s not a difficulty at all for us to find exceptional talent across the country.
Alisha: Looks like the region is perfect for setting up offshore operations. Sharad, thank you so much for coming to our podcast today and giving your wonderful insights.
Sharad: It was a pleasure, Alisha. Looking forward for more.
Alisha: Dear listeners, if you enjoyed our podcast today, please don’t forget to share and like it on social media. Our social handles are mentioned in the podcast page. The podcast will be available on various platforms like Google Podcasts and Spotify, in addition to our website.
Also, if you have any queries, do reach out to us through the email address on the podcast description. Watch this space for more exciting podcasts coming up. Once again, thank you for tuning in, stay safe, happy, and healthy. Have a nice day!