A TEMPTING OFFER

Costa Rica 2017 | ECONOMY | INTERVIEW

TBY talks to Jorge Brenes, President of AZOFRAS, on how Costa Rican free zones differentiate themselves, and what incentives can be offered to bring new companies into the fray.

Jorge Brenes
BIOGRAPHY
Jorge Brenes, President of Asesoría Profesional JB S.A., dedicated to financing by the way of factoring. Consultant of free zone legal and operational aspects and business associated to real estate companies. President of the Association of Free Trade Zone Companies of Costa Rica (AZOFRAS), Vice President of Banco Lafise Costa Rica and member of the Board of Directors of the Union of Private Chamber of Costa Rica (UCCAEP).

How would you assess AZOFRAS' contribution to the development of free trade zones in Costa Rica, and how do you support these companies?

Our main contribution is to support these companies from a political perspective. This means representing the sector within the government; for example, with the Ministry of Finance when it comes to customs service, the Ministry of Health with operation permits, or with Procomer, the principal regulatory body. We offer representation and institutional support, not promotion, which is done by Jorge Sequeira and his team from CINDE. We fully believe in the division of responsibilities; they bring investors to the country. Procomer decides whom to authorize as a free zone company, and Azofras defends and represents them.

Which sectors are showing the most potential for the coming years, and how is AZOFRAS working to attract new companies to these sectors?

At the moment, we have two important sectors. One is the life sciences sector, which includes medical devices and pharmaceutical. The other is services and includes companies such as HP, Procter and Gamble, IBM, and Intel, for example. At the moment, these segments are our introduction letter to potential investors. In the future, Costa Rica should modify its entire scheme and aggressively look for companies focused on human capital. We need to promote R&D with new medicines, but in a wider form. Each year, the universities graduate many biologists, chemical engineers, and doctors; yet, there is not enough work to absorb them all. To create needed labor opportunities, it is necessary to think about incentives beyond the reduction of taxes; things like providing support for a specialized workforce. We need schemes that allow companies to fully benefit from setting up here.

There are now 80,000 people working in free zones in Costa Rica. COMEX said it will finance training programs for employees that want it. How is AZOFRAS working together with COMEX in this regard?

We are part of this project, and in some respects it is financed by us. Companies that belong to the free trades zone finance approximately 60-70% of Procomer's budget. We are actively taking part in this; we go to the companies and ask them what they need. Though the level of trust is still in its early stage, we are getting there.

Costa Rica has the fifth most companies operating in free zones in the region at 313. What competitive advantages do firms have coming here instead of elsewhere?

One clearly defined advantage is the ease of access to the largest market in the world, the US. We have many daily flights to the east and west coasts. Several North American companies are flying to smaller, but still important cities inside the North American economy. Equally, we enjoy another relevant factor, which is that we have had a relatively stable economy during the last 30 years. A firm macro-economic footing has given the country a stable path, and this is a clear advantage. Our workforce is also significant, especially Costa Ricans' open minds and ability to listen and adapt to new things. Even those with only a secondary education can have the skills to adapt and be innovative people. Costa Ricans are proactive people.

What are Azofra's main priorities for 2017?

We have to find out how to consolidate ourselves. We are in a democratic country where human rights are respected, and congress is sovereign. There is a debate about fiscal reform being presented to the Legislative Assembly by the President of Costa Rica, which has still to be put into discussion at Congress. Therefore, our priority is to follow up with this issue while avoiding possible fluctuations in the future. Our aim is to keep an eye on what happens in congress in the next months and make our best efforts to keep the status quo without modifications.