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The third quarterly business survey, “Pulso Empresarial,” published by the Costa Rican Union of Chambers and Associations of the Private Business Sector (UCCAEP), found that opening a business in Costa Rica through the formal routes is becoming more difficult for entrepreneurs.
When asked, “How difficult is it to start a new business in Costa Rica?”, 75 percent of those consulted said that it was difficult or very difficult to start a business; in addition, 65 percent stated that it was very costly to comply with the administrative requirements established to run a formal business.
But that isn’t stopping entrepreneurs, who are increasingly opting to sidestep the overwhelming bureaucracy and prohibitive costs and set up informal operations. You see them everywhere – the car salon in your neighbor’s living room, the car mechanic working out of his garage, the bakery in your friend’s kitchen.
The informal sector is estimated to include 45 percent of the economically active population, according to Franco Arturo Pacheco, president of UCCAEP – a truly stunning number that has leaders concerned.
“Our chamber aims to create the best economic and legal conditions so that the workers can develop sustainable companies. That is why we are working on a series of reforms to encourage workers who are in the informal sector to move into formal work, in compliance with national legislation,” added Pacheco.
The study also found that perceptions on access to business credit are also increasingly negative with businesses included in the survey citing bank procedures, interest rates and guarantees requested by banks as limiting factors.
There has been a drop this year in the country’s Business Perceptions Index and Business Confidence Index which Pacheco said could be related to the uncertainty surrounding the upcoming presidential elections (2018) and the slowdown in some sectors of the economy.
The quarterly business survey has been carried out by UCCAEP for the past 21 years, with data coming from companies located mostly in the central part of the country, and which included 400 business leaders this year.
The study sample has an error of 3.6 percent and a confidence level of 95 percent, said Pacheco.
