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.
- Tax exemptions
- 100% tax exemption for the importation of household goods.
- 100% tax exemption for the importation of vehicles.
- 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.
- 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.
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:
- 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.
- 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.
- 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.
- Make driver’s licenses more accessible to foreign nationals.
- 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.