Costa Rica ships more medical devices per person than any country on earth. It built that on a tax holiday the world has just capped at 15%.

Start with the achievement, because it is real. CINDE, the country's investment promotion agency, puts medical-device exports at roughly $11 billion in 2025, close to half of all goods exports and a record, up from $5.21 billion in 2021. A country of about five million people is the world's largest per-capita exporter of medical devices and sits around tenth in the world by total value, ahead of far larger economies. CINDE's 2026 life-sciences forum counted 100 companies around the Central Valley, among them Boston Scientific, Medtronic, and Abbott. If you run an investment agency anywhere, this is the case study you have already been shown. The tool that won those companies has just been taken off the table.

That tool was the Free Zone Regime. A company that qualifies gets a full income-tax exemption for its first eight years and a half exemption for the next four, on top of permanent relief from VAT and import duties on equipment and inputs. For four decades that discount, paired with an unusually stable rule of law, an OECD membership secured in 2021, and a short flight to the United States, is how a coffee-and-bananas economy recruited the most demanding names in regulated manufacturing. The holiday was never the whole story, but it was the opening line of every pitch.

The opening line no longer works the way it did. Under the OECD's second pillar, large multinationals now owe an effective 15% minimum wherever they book profit. If Costa Rica's exemption drops a company below that floor, another government is entitled to collect the difference as a top-up. The exemption stops lowering the investor's global bill and starts handing revenue to a foreign treasury. The OECD's own study, Tax Incentives and the Global Minimum Corporate Tax, finds that tax holidays and zero-tax zones are the incentives this hits hardest, while cost-based tools such as accelerated depreciation and payroll or research credits survive largely intact. Costa Rica's finance ministry has moved carefully, for the obvious reason that the Free Zone Regime is the flagship it is being asked to rethink.

The response most exposed countries are reaching for, and the one the Costa Rican tax advisory ICS Consultores expects here, is a domestic top-up tax that collects the 15% at home rather than surrendering it abroad. That keeps the revenue. What it cannot do is keep the price advantage, because there is no longer a price advantage to keep.

What holds Boston Scientific in Costa Rica in 2026 is a workforce trained in device assembly, sterile processing, and regulatory affairs, a local supplier base that has learned to pass FDA and ISO audits, and a promotion agency, CINDE, that runs its own talent programs with the technical institutes rather than waiting for graduates to appear. Moving to chase a lower rate somewhere else means rebuilding all of that from scratch, and the rebuild takes years the investor does not have. Cost-based tools survive the second pillar, so a rival can still come at Costa Rica with grants, payroll credits, and accelerated depreciation, and use them to cover the cost of that rebuild. What no grant shortens is the time a new supplier base needs to pass its first FDA audit.

The lesson runs the other way for agencies still early in the game. If you have a holiday, treat the years you still hold it as a budget for building the things that outlast it. Tie the exemption to commitments that leave something behind, starting with a named talent pipeline with local colleges and supplier development that makes the second and third tier domestic. Then count engineers certified and suppliers qualified. If Boston Scientific or Medtronic moves a Costa Rican plant to a cheaper jurisdiction and absorbs the rebuild anyway, the argument here is wrong. When the discount gets capped, and it now has been, the agency that spent it on capability keeps its cluster.