This chapter provides an overview of the Costa Rican economy and the role of FDI in its development. Costa Rica stands as an undeniable economic and social success story in the developing world, and in particular within the Latin American and Caribbean region. With a population of only 4.7 million inhabitants, Costa Rica’s economy is small, but has nonetheless achieved significant integration into the world economy. It successfully attracted and used FDI as a catalyst for economic development. While foreign investments were at first mainly geared towards simple manufacturing operations, they have become increasingly diversified and knowledge-intensive and have helped to transform the economy. Over the past two decades, annual FDI inflows have increased at an impressive pace, accelerating over the last ten years to reach an average growth rate of 13% per year.