Costa Rica is becoming a global hub for web hosting. Here's why:
- Fast Internet Speeds: Fixed broadband averages 43.32 Mbps, with top providers offering up to 240.66 Mbps.
- Eco-Friendly Energy: 98% of electricity comes from renewable sources, ensuring stable, clean power for data centers.
- Affordable Hosting Plans: VPS starts at $11.99/month; high-performance configurations go for $99.99/month.
- Business Incentives: Tax breaks and Free Trade Zone policies attract tech investments.
- Reliable Infrastructure: Connected to major submarine cables like AMX-1 and ARCOS-1, ensuring strong global connectivity.
- Political Stability: A safe, stable environment for international companies to operate.
Costa Rica's combination of renewable energy, robust infrastructure, and business-friendly policies makes it a leading destination for web hosting in Latin America.
Learn more: Costa Rica: A Strategic Location for Global Web Hosting | Why Your Choice of Web Hosting Matters for SEO
How Costa Rica runs on 100% renewable electricity
1. Costa Rica's Hosting Infrastructure
Costa Rica combines strong connectivity with eco-friendly energy solutions, creating a reliable hosting infrastructure. Its central location provides direct access to key submarine cable networks, making it a strategic choice for data hosting.
Network Infrastructure
Costa Rica is integrated into advanced submarine cable systems. For example, the Dallas–Mexico City route costs around $12,000 for a 100 Gbps connection, showcasing the region's competitive pricing.
Renewable Energy Edge
One of Costa Rica's standout features is its nearly 100% renewable energy grid, ensuring stable power for data centers. Environment Minister Franz Tattenbach highlights this advantage:
"Every kilowatt we export strengthens democracy."
Affordable Operations
Costa Rica Servers offers competitively priced hosting options. VPS plans in Costa Rica start at $11.99 per month, while high-performance configurations like 8 vCPU and 32 GB RAM are available for $99.99 per month. These cost benefits stem from operating within Costa Rica's Free Trade Zone.
Supportive Regulations
Costa Rica's business-friendly environment enhances data center operations through clear policies and incentives. Luis Rojas, CEO of ADN Datacenters, explains:
"Costa Rica is the only country in the region with political stability, legal certainty – we have all these major international companies operating there."
This stable framework has made Costa Rica a magnet for foreign investment, which grew by 24% in 2023. Over 70% of this investment comes from the United States. Unlike markets like Querétaro and Colombia, Costa Rica avoids power supply issues, further solidifying its position as a hosting hub.
These advantages set the stage for exploring the broader hosting market in Latin America.
2. Latin American Hosting Markets
The hosting industry in Latin America offers a mix of opportunities and challenges, with Costa Rica standing out for its strategic advantages.
Regional Connectivity Infrastructure
Costa Rica benefits from advanced submarine cable systems like ARCOS-1 and AMX-1. The AMX-1 cable stretches 17,500 km and supports 85 Tbps, boosting the region's connectivity. In November 2022, Claro Costa Rica committed US$500 million to expand the AMX-1 cable's fiber network. Marcelo Mouzo, Country Director of Claro Costa Rica, highlighted the significance of this investment:
"Through this work, Costa Rica is positioned within the Central American isthmus as the second country with the most connections to submarine cables and places Claro as the leading operator in fiber optics, by offering an increase in data traffic capacity."
This strong connectivity, combined with affordable energy costs, gives Costa Rica a competitive edge in the hosting market.
Power Infrastructure Comparison
Costa Rica's nearly 100% renewable energy supply and electricity priced at US$0.28 per kWh create an attractive environment for hosting operations.
Market Development and Investment
Improved connectivity and energy efficiency are driving investments across the region. Ray Collins, SVP of Infrastructure and Corporate Strategy at Liberty Latin America, emphasized the importance of collaboration in the region:
"We're always open to discussing new cable extensions with partners in the region."
Future Growth Indicators
Costa Rica is at the forefront of hosting industry trends. Sergio Diaz-Granados, CAF Executive President, pointed out:
"For the first time, we can decouple economic growth from emissions."
This vision aligns with Costa Rica's ambitious goal of achieving 100% renewable electricity by 2030, setting a strong example for sustainable hosting practices across Latin America. These factors position Costa Rica as a leader in the region's hosting market.
Key Differences and Trade-offs
Costa Rica's hosting infrastructure stands out in Latin America, offering several advantages. Here's a closer look at how it compares to other markets in the region.
Infrastructure Quality
Costa Rica's submarine cable network is a standout feature, supported by four major systems: Pan‐American Crossing, ARCOS-1, AMX-1, and TAM-1. These connections provide impressive connectivity. For example, Metrocom recorded median download speeds of 240.66 Mbps and upload speeds of 214.86 Mbps in early 2024, making it a regional leader.
| Metric | Costa Rica | Regional Average |
|---|---|---|
| ISP Download Speed | 240.66 Mbps | 48.22 Mbps |
| Gaming Latency | 92 ms | 120+ ms |
| Submarine Cables | 4 major systems | 1–2 systems |
Power Infrastructure Reliability
Costa Rica's renewable energy system is a key strength. In 2020, 99.78% of its electricity came from renewable sources, with hydroelectric power contributing 72% and geothermal 15%. Between 2010 and 2017, the country attracted US$1.9 billion in clean energy investments, ensuring stable power for hosting operations. Impressively, Costa Rica also boasts the highest rate of residential electrification in Latin America.
Regulatory Framework
Costa Rica's territorial tax system is another advantage, as it only taxes income earned within the country. The Free Trade Zone Regime adds further incentives for tech companies, solidifying Costa Rica's position as a prime hosting destination.
| Factor | Costa Rica | Other LATAM Markets |
|---|---|---|
| Political Stability | High | Variable |
| Infrastructure Quality | Premium | Basic to Moderate |
Luis Rojas, CEO of ADN Datacenters, highlighted these benefits:
"In Costa Rica we have subsea cables, we have land, people...Costa Rica is one of the top three or four countries in terms of renewable [energy] matrix. We have a surplus of energy right now. Costa Rica might be a small country, but if you think of the country from a regional perspective, one can build there to serve Central America."
Conclusion
Costa Rica has emerged as a top choice for web hosting, thanks to its strong infrastructure and policies that attract businesses. A nearly 100% renewable energy supply ensures reliable hosting while addressing environmental concerns - key priorities in an industry that values both uptime and sustainability.
The combination of cutting-edge infrastructure and supportive policies offers a compelling draw for tech companies. For instance, the Free Trade Zone Regime significantly boosts the economy, contributing around 12% of Costa Rica's GDP. This initiative has already attracted 59 multinational projects for 2023–2024, giving Costa Rica a clear edge over its regional competitors.
Renewable energy efforts have also driven a 24% rise in foreign direct investment in 2023, solidifying Costa Rica’s reputation as a leader in sustainable technology infrastructure.
Here’s a snapshot of Costa Rica’s hosting advantages:
| Factor | Impact on Hosting Operations |
|---|---|
| Renewable Energy | 98% clean energy usage over the past 5 years |
| Business Climate | Ranked #1 IT services exporter per capita in Latin America |
| Investment Growth | 24% increase in foreign direct investment in 2023 |
CAF Executive President Sergio Diaz-Granados sums it up perfectly:
"For the first time, we can decouple economic growth from emissions."
With a goal of achieving 100% renewable electricity by 2030, Costa Rica is solidifying its place as a leader in sustainable web hosting.