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

Are you considering the geographical diversification of your capital and looking for a stable country outside the European Union where private property enjoys strong protection and investments make long-term economic sense?

As a native Costa Rican and private real estate specialist working in Prague as well as in Costa Rica, I frequently encounter questions from Czech investors about how safe it is to do business and own real estate in Central America. The answer comes not only from my personal professional experience and my tenure at the Embassy of the Republic of Costa Rica in Prague, but primarily from independent international data.

In the latest report by the prestigious Canadian think tank, the Fraser Institute (Economic Freedom of the World 2025), Costa Rica achieved an outstanding result. It ranked among the 15 freest economies on the planet (specifically 14th worldwide) and claimed 1st place in all of Latin America, with an overall score of 7.85 out of 10. For Czech investors and entrepreneurs, this provides clear confirmation that Costa Rica offers a predictable, secure, and mature environment for capital allocation.

WHO THIS ARTICLE IS FOR

This analysis is intended primarily for investors and business leaders who:

• are considering strategic wealth diversification outside Europe
• are seeking a jurisdiction with robust private property protection, independent courts, and a stable currency
• are planning to purchase prime real estate, land plots, or enter hotel or residential development projects
• wish to base their investment decisions on solid international data and understand the specific dynamics of the Costa Rican market.

WHAT THE ECONOMIC FREEDOM INDEX MEASURES AND WHY IT MATTERS

The Fraser Institute's Economic Freedom Index examines five key pillars that form the institutional backbone of a modern economy:

• Size of government and intervention in the economy
• Legal system and property rights protection
• Sound money and currency stability
• Freedom to trade internationally
• Regulation of credit, labor, and business.

The higher a country's score, the greater the freedom enjoyed by private capital, and the more predictable investment returns become. Historical data demonstrates that nations with high levels of economic freedom exhibit higher living standards, lower inflation, and enduring long-term stability. For an investor, the index serves as a dependable roadmap of both risks and opportunities.

IN-DEPTH ANALYSIS OF THE 5 PILLARS: COSTA RICA COMPARED TO THE CZECH REPUBLIC

Costa Rica achieved remarkable results in areas that directly impact the security and profitability of real estate and commercial projects. Below is a detailed comparison with the Czech Republic.

1. SIZE OF GOVERNMENT AND STATE INTERVENTION

This pillar assesses the scale of public spending, taxation levels, and the state's footprint in the economy. Lower redistribution creates wider space for private initiative. Costa Rica maintains a balanced model where the state provides essential infrastructure, healthcare, and education, without placing an excessive tax burden on entrepreneurs.

• Costa Rica: score of approximately 7.5 out of 10 (reasonable fiscal policy and transparent budgeting)
• Czech Republic: score of approximately 7.0 out of 10 (higher taxation levels and a larger public sector footprint)

In practice, this means greater room for investors to execute private projects efficiently, particularly in services, tourism, and prime real estate.

2. LEGAL SYSTEM AND PROPERTY RIGHTS PROTECTION

A crucial indicator for anyone purchasing real estate abroad. Costa Rica is one of the oldest and most stable democracies in Latin America. In 1949, it constitutionally abolished its military and redirected all related resources into education and healthcare. The country is a full member of both the OECD and the World Trade Organization (WTO), and its legal system fully complies with Western standards.

Foreign investors enjoy the exact same property rights in Costa Rica as local citizens. You can hold property:

• directly as an individual
• through a local corporate entity, such as an S.R.L. (limited liability company) or an S.A. (joint-stock company)
• via trusts or international holding structures.

All real estate transfers must be processed by authorized notaries and registered in the central digital land registry (Registro Nacional), eliminating the risk of duplicate ownership claims or hidden title defects.

• Costa Rica: 6.8 out of 10 (solid legal protection, transparent registries, historically slower court administration)
• Czech Republic: 7.7 out of 10 (advanced institutional framework within the European Union)

Costa Rica's slightly lower score is primarily driven by longer procedural timelines in formal judicial litigation, rather than weaker legal protection. In terms of security of title acquisition, Costa Rica offers a comprehensive, secure framework.

3. SOUND MONEY AND INFLATION CONTROL

In this category, Costa Rica achieved exceptional global success, ranking 4th in the world. The local currency (the Costa Rican colón) has shown long-term stability, backed by a credible monetary policy from the central bank and low, controlled inflation.

The country operates on a system of complete monetary freedom. Foreign investors can legally and routinely hold bank accounts and conduct transactions in US dollars (USD) or euros (EUR).

• Costa Rica: 9.5 out of 10 (extraordinary currency stability, low inflation, zero foreign exchange barriers)
• Czech Republic: 8.4 out of 10 (stable koruna, though marked by higher cumulative inflation over recent years)

Investment impact: A stable monetary climate eliminates exchange rate risks, simplifies return-on-investment calculations, and allows rental income and capital gains to be generated directly in strong currencies.

4. FREEDOM TO TRADE INTERNATIONALLY

Costa Rica is an export-oriented, open economy with comprehensive free trade agreements with the United States, the European Union, and several other major global partners. This ensures the free movement of capital, smooth importation of construction materials and technologies, and international legal protection for investments.

• Costa Rica: 8.5 out of 10 (high market openness and low tariff barriers)
• Czech Republic: 8.9 out of 10 (natural openness within the EU single market)

For a Czech investor, this translates into complete structural compatibility. Transferring investment capital into the country and repatriating returns back to Europe proceeds smoothly and in full compliance with international anti-money laundering standards.

5. REGULATION OF CREDIT, LABOR, AND BUSINESS

This pillar examines the administrative requirements for company incorporation, obtaining permits, hiring staff, and accessing bank financing. Costa Rica is aggressively digitizing public administration while actively supporting foreign direct investment and sustainable development.

The comparison of building permitting processes is particularly revealing. In the Czech Republic, preparing and permitting a larger development project often takes 5 years or more due to cumbersome proceedings, environmental impact assessments (EIA), and recurrent administrative appeals. Costa Rica takes a more pragmatic approach. Minor construction projects (obra menor) can receive permits within several working days, while larger developments typically undergo municipal review and approval within several weeks to months.

• Costa Rica: 7.0 out of 10 (investor-friendly environment, accelerating digitalization)
• Czech Republic: 7.1 out of 10 (comparable regulatory framework, but lengthy permitting cycles)

SUMMARY COMPARISON: COSTA RICA VS. CZECH REPUBLIC

Evaluated Area	Costa Rica	Czech Republic
Size of Government	7.5 out of 10	7.0 out of 10
Legal System & Property Rights	6.8 out of 10	7.7 out of 10
Sound Money	9.5 out of 10 (4th globally)	8.4 out of 10
Freedom to Trade Internationally	8.5 out of 10	8.9 out of 10
Business & Credit Regulation	7.0 out of 10	7.1 out of 10
Overall Index Score	7.85 out of 10 (14th globally)	7.70 out of 10 (29th globally)

While the Czech Republic benefits from strong institutional legal certainty within the EU framework, Costa Rica offers world-leading currency stability and greater private-sector flexibility. For a Czech portfolio, it serves as an ideal diversifying counterweight in the Americas.

WHAT THIS DATA MEANS FOR YOUR REAL ESTATE INVESTMENTS

• Straightforward valuation and predictable financing: Thanks to its 4th-place global ranking in sound money, investors in Costa Rica can accurately model yields, RevPAR indicators, and capitalization rates (CAP rate). Minimal inflationary volatility lowers the risk premium and allows long-term planning free from currency fluctuations.
• Growing demand for accommodation: Expanding international tourism, the influx of digital nomads, and the continuous growth of multinational corporations fuel steady demand for both short-term vacation rentals and long-term residential leases.
• Seamless capital transfers: Foreign investors can acquire property directly in their own name or through a corporate structure, with uninhibited repatriation of capital and profits under zero exchange controls.
• Global ESG and sustainability trends: Costa Rica is an acknowledged world leader in sustainability, generating nearly 100% of its electricity from renewable sources. Development projects centered on sustainable architecture, eco-resorts, and energy-efficient villas attract an affluent, environmentally conscious global clientele.

"Costa Rica is not just my native country; it is an exceptionally mature and secure market. It pairs Latin American dynamism with solid legal certainty and US-dollar-aligned monetary stability, making it an ideal destination for international capital diversification."

Maria Kopřivová

ARE YOU CONSIDERING A REAL ESTATE INVESTMENT IN COSTA RICA?

Costa Rica is not an exotic experiment, but an established market with transparent rules, a functioning democracy, and an exceptional quality of life.

I would be delighted to guide you through the opportunities this country presents. Drawing on my heritage, in-depth knowledge of local real estate legislation, direct network of verified notaries and attorneys, and previous experience at the Embassy of Costa Rica in Prague, I ensure a smooth and secure acquisition:

• selecting prime investment parcels, luxury villas, or commercial properties
• comprehensive legal title due diligence in the central registry
• setting up the optimal corporate vehicle (S.R.L., S.A.) and opening local bank accounts
• end-to-end coordination of the acquisition process, from initial feasibility analysis to the signing of the notarial deed.

If you are looking to diversify your portfolio into a country characterized by sound money and high economic freedom, please fill out the short form below this article. I will be pleased to get in touch and discuss your investment objectives during a personal or online consultation.