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Incentives for Foreign Nationals

A few months ago, the CR Government announced in a press conference the intention to attract more expats to Costa Rica. People have asked frequently about the status of the proposal. On August 19th, three

A few months ago, the CR Government announced in a press conference the intention to attract more expats to Costa Rica. People have asked frequently about the status of the proposal. On August 19th, three representatives from CR Congress put a bill on the floor under file number 22.156 with the name of “Law to Attract Investors, Rentistas and Retirees.

Objective of the Law

The main objective of the bill is to create incentives with the intention to attract more foreigners coming to Costa Rica under those three categories. Namely, investors, rentistas and retirees. The Introduction of the bill lays out the background to justify it. Some arguments include the necessity for Costa Rica to compete with other countries when it comes to being destination for expats as well as the current economic environment requiring foreign investment to the country.


The bill proposes some incentives for foreign nationals with the intention to make Costa Rica more attractive as a destination.

  1. Tax exemptions
    1. 100% tax exemption for the importation of household goods.
    2. 100% tax exemption for the importation of vehicles.
    3. 20% tax exemption for the transfer of property.
      These exemptions will be applicable to all foreigners and dependents applying under one of those three categories.
  2. Reduction of minimum capital required for investors.
    Currently, the law requires a minimum capital investment of $200,000 USD to qualify for this category. The bill proposes to reduce the amount to $150,000 USD.

My opinion

While it is a good start to create some incentives for expats to relocate to Costa Rica, a lot more should be done.

From an immigration perspective, the government can create other incentives and/or adjustments to make it more attractive for foreign nationals to relocate to Costa Rica. Some of them are:

  1. Simplify the residency process for people applying as self employed or with a small business. Currently, the requirements and the process to obtain this category makes it virtually impossible to obtain this category.
  2. Grant estancias (a lesser immigration category) for people who do not want residency or do not meet the investment amount but have property in Costa Rica. There are thousands of people who have a second home in Costa Rica and spend a few months a year in Costa Rica (more than 90 days, and less than six months) just to avoid winter.
  3. Digital nomads. Make more flexible regulations for digital nomads. They can also get an estancia for one year. If they want to stay longer, they can get residency.
  4. Make driver’s licenses more accessible to foreign nationals.
  5. Create a tax exemption to all start ups (regardless it is an expat or a tico) for income taxes during a period of three years from the moment of incorporation.

Of this options, only the fifth one will require a law, the other options can be passed via executive order. Just my thought.

I am sharing the bill for you to review. The translation may not be perfect.



Attorney and Entrepreneur with more than 15 years experience in: immigration law in the US and Latin American countries including Argentina, Chile, Colombia, Brazil, Costa Rica and Panama. In addition, Rafael has extensive experience in Business Law, Estate Planning, and Real Estate. Lastly, Rafael has developed experience in people management, talent development and business development.

Review overview
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    Sandy August 23, 2020

    One item the CR Government could consider is to create a category of immigration/residency for the foreign nationals that are and have been in the country during the pandemic and have had their Visa extended. For example, create a $1500 law firm submitted application that includes finger prints/birth certificate and expedited process and approval. $1500 is allocated to CR government and a portion to law firm. The price could help recoup lost revenue on past and future exit taxes. Just a thought and probably needs to be modified but it could generate revenue quickly.

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    Rob August 24, 2020

    How about us ‘tourists’ who stayed, weathered the pandemic and made a positive impact on the local economy?
    Maybe some sort of reduced residency requirements as a tank you?

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    Walter Freeman August 25, 2020

    Also under recent possibilities being considered is the taxation of all residents worldwide income. If that were to happen, you can expect these modest measures to be futile and out-migration to start rapidly. The typical response to that is to enact currency controls. Resulting in zero new investment capital and the currently issued securities becoming near-worthless – there is little internal demand for them now and the foreign market would evaporate overnight. The history of how this plays has been written too many times to expect a different outcome this time. Show me where that’s wrong.

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    Tary B August 25, 2020

    Great now this is the first real step to encourage retires to look at CR again. But I agree another crucial items is a speedy path to residency. An office or path with simplicity as to not have additional costs due to the complexity of the process and requiring an attorney to get things done.

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    John Senior August 26, 2020

    Thank you this information. How long do you think it will be for this bill to be passed into law? We are hoping to relocate to Costa Rica in the near future.

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    Emily August 28, 2020

    This is great news for people who want to be expats there! I know it’s hard to predict anything, but do you have an idea of when these changes may take place? It would help us figure out our plans! Thank you!

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    Jamie Armstrong September 6, 2020

    Do you have to already have residency under Investor, Rentista and Retiree to benefit or can you be in the process, or even just planning residency in the future?

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    Marcel September 13, 2020

    A thought for the upcoming winter season…where Nicaragua and Panama borders are still closed and so many are cancelling their stays.
    The government could/should upon arrivals of travellers with airlines tickets with overs 90 day stays…charge like 100US$ per person….maybe even per month for extended stays. Ex-a couple for 6 months would pay 600US$ directly to the government at the airport. We do alos help local groceries, bar and restaurants and more.