Canada-Costa Rica services trade

Various service companies from either country will find it easier to do business in the other, when Canada and Costa Rica expand their bilateral free trade agreement.

The two countries last week concluded the fifth round of talks, focusing on services. The original agreement, which came into force in 2002, mainly liberated trade in goods.

Financial services will be part of the deal, details of which are yet to come, including possible exceptions to the liberalization of services trade, as well as a date when the new rules come into effect.

In general, however, under a services-trade agreement, a company in one country, which provides services in the other in conformity with local standards, does not need to incorporate a subsidiary in the other country. If different tax rules apply in the participating countries, free trade can create tax benefits.

An important element in the proposed expansion of Canada-Costa Rica free trade, is the right of a company in one country to bid on government procurement contracts in the other.

A growth area includes Canadian companies bidding on major Costa Rican construction contracts, most of which are awarded by government.

Language is a bigger issue in the provision of services, than it is in the trade of goods. On the other hand, many Costa Rican professionals are bilingual, as are hundreds of thousands of Canadians, following significant hispanic immigration during the past 30 years, especially from Chile, Colombia and several Central American countries.


Opportunities

• Construction companies
• Consulting engineers
• Environmental management
• General consultants