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The Costa Rican government's monopoly on energy, telecommunications and the insurance and health industries loosened up considerably in 2010-11, thanks largely to implementation of the Central American Free Trade Agreement-Dominican Republic (CAFTA-DR) in January 2009. Though economic expansion, trade liberalisation and protection for foreign investors are the treaty's primary objectives, in the opinion of one Costa Rican attorney, "The most important thing about CAFTA-DR is that it opened up communications, which had been unchanged for 60 years....

The Costa Rican government's monopoly on energy, telecommunications and the insurance and health industries loosened up considerably in 2010-11, thanks largely to implementation of the Central American Free Trade Agreement-Dominican Republic (CAFTA-DR) in January 2009. Though economic expansion, trade liberalisation and protection for foreign investors are the treaty's primary objectives, in the opinion of one Costa Rican attorney, "The most important thing about CAFTA-DR is that it opened up communications, which had been unchanged for 60 years."

Even so, the government-owned Costa Rican Institute of Electricity (ICE), which has three million of Costa Rica's four and a half million cell phone users, has been resistant to the new markets. According to a report by Costa Rica's Superintendent of Telecommunications (SUTEL), it took an entire year after SUTEL began issuing authorisations to alternative companies for ICE to "interface" its first alternative operator. SUTEL had issued 86 telecom authorisations by that time, July 2010. As of the summer of 2011, two telecommunications giants are preparing to expand their markets into the country - Carlos Slim's América Móvil, which is already in 28 countries; and the Spanish Telefónica which is in 14 other Latin American countries.

Significant competition between insurance companies and brokers has led to a sharp uptick in work for attorneys in that area, thanks to the breakup of the National Institute of Insurance's monopoly, which had been in effect since 1924, and the arrival of foreign insurance companies. "It is the most active sector of the market," notes one partner. According to the Sociedad Agencia de Seguros, by the end of 2010 there were 11 insurance companies in Costa Rica and six brokers, though they had only captured 1% of the market.

Increased liquidity in the global market and improved confidence in the economy has brought what one lawyer called, "a huge increase" in banking and finance, though he adds, "it is not back to "pre-bubble level". High-end resorts, tourism and real estate investments by foreigners, mostly Americans, Canadians and Europeans looking to buy second homes, are all returning. The weakness of the Colón relative to the Dollar has also been good for the banking sector as local banks enter into contracts with international financial institutions as a means of hedging their investments.

M&A has been reactivated as companies use Costa Rica as a port of entry to explore other possibilities in Latin America. The country's increasingly open market continues to attract more foreign investors, particularly from Brazil, China and Colombia. "Colombia is pigeonholed," one attorney explained. "It can't go to Venezuela or Ecuador because of uncomfortable political situations so it looks to Costa Rica and Panama for expansion."

Changes in the country's immigration law came into effect in March 2010, raising the amount of pension income necessary for foreigners to become eligible for investment-based residency. Those hoping for permanent resident status must also prove they have contributed to Social Security and the medical system at the time of their residency renewal. And as a means of curbing the use of false marriages as a fast-track to permanent residency, the new law requires immigrants who marry Costa Ricans to obtain temporary residency status for three years at which time they can apply for permanent residency status.