Despite being one of the smallest countries in Central America, Costa Rica has one of its most active and dynamic M&A markets. As a member of the OECD, with a continuing reputation for political stability and economic growth (the World Bank reported a GDP increase of 4.3% in 2024 and predicted a 3.5% rise in 2025), the country remains a highly attractive jurisdiction for foreign investment, particularly in the pharmaceuticals and medical devices, technology and real estate sectors. Its strategic location close to the US has also made it a regional nearshoring hub for major North American companies.
While global political and economic uncertainty – and particularly concerns over the impact of the election of Donald Trump in the US – has caused a slight slowdown in the Costa Rican M&A market recently, law firms continued to advise on a high level of both local and cross-border deals in late 2024 and early 2025 (as well as on related tax, labour and real estate matters). ESG issues and corporate compliance are also becoming increasingly important to clients, particularly following the 2019 approval of a law introducing significant penalties for corruption offences (including bribery and accounting fraud) committed by employees and third-party agencies.
Activity levels in the banking and finance market have followed a similar trend. There has been continuing demand for advice on the financing of residential and hospitality developments, particularly in the popular tourist areas of Guanacaste and Puntarenas (where many firms have opened up offices in order to cater to growing numbers of tourists and foreign nationals seeking second homes). In addition, firms have seen a steady stream of work relating to the financing of renewable energy projects; recently, there has been an uptick in solar, biomass, and wind power projects as Costa Rica aims to increase its capabilities in these areas.
A global leader in environmental conservation and sustainability, Costa Rica generates 99% of its electricity from renewables and has set a goal of achieving 100% renewable electricity by 2030 and net-zero carbon emissions by 2050. Hotel and tourist developments are subject to strict regulations on the protection of biodiversity, marine and wildlife conservation, environmental impact assessments, and waste management, creating an onoing source of work for firms. However, Costa Rica’s credentials in this area have been challenged recently by President Rodrigo Chaves’ announcement that his administration is seeking to overturn the ban on open-pit mining that has been in place since 2010, in order to allow for the operation of the Crucitas gold mine.
In the tax arena, there is still consistent demand for advice on tax incentives for renewable energy projects and for companies operating in Costa Rica’s free trade zone. Firms are hopeful that their work will be made easier by the introduction of a new virtual tax administration platform – set to go live in the summer of 2025 – and by the introduction in February 2025 of a long-awaited draft resolution to require annual transfer pricing statements. Costa Rica is also continuing its drive towards tax transparency; the country was removed from the EU’s “blacklist” of non-cooperative jurisdictions in October 2023, after reforms to the law on foreign-sourced income, and is a member of the OECD’s Inclusive Framework on BEPS.
The country has also forged ahead in the field of intellectual property law, recently signing a cooperation agreement with the European Patent Office that will make it the first Central American country to allow European patents to be validated in its jurisdiction. As Costa Rica has more robust IP legislation than many other countries in the region, as well as a faster and less bureaucratic digital system for registration, more and more firms are being called upon to manage clients’ IP portfolios throughout Central America. In addition, firms are seeing continued demand for advice on new technologies, especially following the launch of Costa Rica’s National Artificial Intelligence Strategy 2024-27, which aims to develop a regulatory framework for the use of AI (including data protection and cybersecurity), among other targets.
In the dispute resolution sphere, the main trend has been an increased emphasis on the use of arbitration, particularly after the new Harmonisation Law came into force in April 2025, replacing the separate systems for domestic and international arbitration with a single set of rules and aligning the Costa Rican system more closely with international standards. Since the Bankruptcy Law came into effect in 2021, making alternative dispute resolution mechanisms available to the parties in insolvency proceedings, firms have also seen an uptick in arbitration, mediation and conciliation proceedings in this area.
Finally, a series of developments in the country’s labour law has also kept law firms busy. Regulations extending bereavement leave and governing remote working from abroad were recently approved, and in February 2025 the Constitutional Court recognised the right to co-maternity leave for female same-sex couples. Proposals are also on the table to adopt a 4×3 work model, with an extended 12-hour work day and an additional rest day, which would particularly benefit companies in the manufacturing sector (and would formalise practices already being implemented by many employers).
Turning to the legal landscape, Aguilar Castillo Love, BLP, Consortium Legal and Arias continue to dominate in Costa Rica, thanks to their full-service offerings and strong regional presence.
Other firms in the market with a Central American network include Alta (a leader in the dispute resolution field), EY Law Central America, Lexincorp and Sfera Legal (which has a strong reputation for real estate law). More recently, Tactic Legal has also expanded its footprint in the region through its merger with Guatemalan firm AD Sosa & Soto (it has additional offices in Honduras and El Salvador). Specialist IP firm Eproint, which provides services across Central America and the Caribbean, has also made gains in Costa Rica after hiring a group of well-regarded Arias partners.
Among the key domestic players are Facio & Cañas (a particular standout in the dispute resolution sphere), Lang & Asociados (which has strong corporate and labour offerings) and Zürcher, Odio & Raven (which is particularly well regarded for its corporate and projects practices), while international firms Dentons and ECIJA have continued to gain traction in the market.
Specialist firms BDS Asesores (which benefits from an association with US-based Littler Mendelson, P.C.) and Bufete Godinez y Asociados are notable names in the labour law sphere.