Accounting Practices in Costa Rica

Accounting is big business in Costa Rica, a country in Central America which is about the size of West Virginia (Faddis, 2006). This is due in part to the tremendous influx of America’s baby boomers choosing to live and retire in Costa Rica for the country’s mild weather and its reasonable cost of living. In Costa Rica, there are over 10,000 Accountants. Every Accountant who practices in Costa Rica is required by law to be certified through the Costa Rican Board of Accountants. The Costa Rican Board of Accountants must authorize each of the 10,000 plus Accountants. Public Law 1269 states that each Account must be authorized by the Board to legally exercise the professional accounting practice in Costa Rica (Zamora, 2005).

The government itself openly discourages people from utilizing the “$20 a month” Accountants who handle numerous clients. Because many individuals seek Accounting services in Costa Rica, professionals and “not so” professionals try to attract the customer’s attention. Many new customers for these accountants are coming from the U.S. Because of its lower cost of living and onslaught of baby boomer retirees, many Americans and their money are moving to Costa Rica and taking advantage of these accountants. This is causing the country to have an increase need in financial consultants and accountants for their new residents.

It is quite common on Costa Rican websites to find warnings of those in various professional fields that aren’t so professional. Because accounting is big business in Costa Rica, accounting scammers are too. This is why the Costa Rican government warns people to check the “Accountant’s” certification and professional status. The following is just one of the common cautions I found on one Costa Rican site: “CPA’s here are of course accountants, but no need to spend years in public accounting before they became CPA’s. Here you want someone who is careful, knows the tax laws and how they affect you, and has experience” (Professionals, 2007).

Costa Rica is even impressing U.S. businesses with its accounting practices. Because Intel Corporation, a U.S. company, was impressed by the quality of accounting services demonstrated in Costa Rica; they have since located their new financial services center in Costa Rica. The following was reported in Itnews.com:

Intel, which already operates a major facility in Costa Rica, said it will fill 100 new accounting professional positions for a new financial services center it will open next year. In an email this week, an Intel spokesman said the operation would provide financial services for the corporation while overall accounting control and policy management would remain in the US (Gardner, 2005).

The Costa Rican Investment Promotion Agency (CINDE) attributes Intel’s move and that of other companies to Costa Rican’s new literacy rate, their improved education system along with their high tech infrastructure as why many companies are choosing Costa Rica to move their businesses to (Gardner, 2005). There are many other companies and countries who outsource their accounting needs to Costa Rica. Many individuals aren’t aware of this because the companies physically stay put while conducting their accounting business with Costa Rica through the Internet.

Costa Rica has been a forerunner in other areas pertaining to accounting also. In 2002, Costa Rica offered an international Pilot Project presentation on “Environmental Management Accounting” which was geared toward better understanding and supporting the financial decision-making processes that are influenced by environmental factors (Feoli et al., 2003).

Managers that participated in this Environmental Management Accounting program were impressed with the studies used in combining managerial accounting with environmental management in that the results were “very relevant to their decision making process since they had not previously accounted the impact of environmental management in their cost structure” (Feoli et al., 2003).

Overall, management of the companies stated that they had no idea of their environmental costs and that this Environment Management Accounting Pilot Project hosted and developed by the country of Costa Rica helped “identify operational potential factors in reducing their environmental costs” (Feoli et al., 2003).

     The U.S. Government advises the traveler visiting Costa Rica be up-to-date on their immunizations including those for typhoid, Hepatitis A and B, tetanus-diptheria and measles (Tips, 2007). It’s also important for business travelers to pack insect repellant with Deet when coming to Costa Rica. Other useful tips would include that the traveler leave their passport number and a detailed itinerary with a friend or relative in the U.S. The U.S. Department of State advises that the traveler bring travelers checks, not cash when coming to Costa Rica (Tips, 2007).

Some interesting information about Costa Rica, according to NASA Research, the climate in Costa Rica is considered to be the healthiest climate in the world (Faddis, 2006). December through April is their dry season whereas their rainy season lasts from May to November. Because Costa Rica still has many secondary roads, often transportation can be challenging to those who live there and some tourists who often aren’t aware of this. Four-wheel drive vehicles are strongly recommended for those who have to or choose to drive on Costa Rica’s secondary roads during the rainy season.

Costa Rica has some of the best places to ride motorcycles. People come from all over the globe to ride motorcycles in Costa Rica (Faddis, 2006). Costa Rica is considered to have some of the most varied riding areas in the world.

     Costa Rican is considered by some to be a food lovers paradise because of their fusion of cuisine. The culinary traditions represented in this area combines elements from Africa, Italy, France, China and Spain. Costa Rican’s food is generally mild to lightly seasoned flavored by grains, roots, spices, oils, sauces along with fresh fruit and vegetables (Business, 2006). Tap water in most areas of Costa Rica is considered safe to drink, however, it is generally recommended that one bring bottled water when traveling to any remote areas in Costa Rica (Faddis, 2006).

Not too surprising I would guess, catering to business travelers and international visitors is more expensive than catering to Costa Ricans (Business, 2006). So if an American were to live or retire to Costa Rica, their daily expenses would be less than what you would be paying as a tourist or as a business traveler in Costa Rica.

Women have made great strides in Costa Rican politics. There were a series of laws passed in Costa Rica to make sure women were represented in political offices and it worked! By the year 2002, the percentage of female legislators in office was unmatched by any other democratically elected national legislature in the world (Professionals, 2007). Costa Rica was the first country in the world to constitutionally abolish its army.

References

(2006). Business travel information. Retrieved June 17, 2007, from costarica.com Web

     site: http://www.costarica.com/Home/Business/Business_Travel_Information

Gardner, D (2007). “Costa Rica scores high tech operations.” Retrieved June 19, 2007,

     from itnews Web site: http://www.itnews.com.au/newsstory.aspx?CIaNID=18756

Faddis, R (2006, December 14). About Costa Rica. Retrieved June 20, 2007, from Costa

     Rica Web site: http://www.mototourscostarica.com/costa_rica_facts.php

Feoli, M. Jasch, C., Cordoba, A., Danse, M. (2003). “Environment management

     accounting pilot project in Costa Rica.” Retrieved June 16, 2007, from Environment

     Management Case Studies Web site:

     http://gin.confex.com/gin/2003/techprogram/P140.HTM

(2007, May 16). “The Professionals in Costa Rica.” Retrieved June 19, 2007, from The

     Real Costa Rica Web site:   http://www.therealcostarica.com/living_in_costa_rica/professional_services.html

(2007). Tips for travelers to Central and South America. Retrieved June 18, 2007, from

     U.S. Department of State Web site:

     http://travel.state.gov/travel/tips/regional/regional_1172.html

Zamora, R (2005). “Accounting Services in Costa Rica.” Retrieved June 19, 2007, from

     1costaricalink Web site: http://www.1costaricalink.com/business/accounting.htm