New Incentives Ease Investment in Costa Rica

A new government initiative seeks to encourage greater investment in Costa Rica by slashing taxes and lowering the minimum financial threshold for residency for investors.

Playa Escondilla in Costa Rica, where you may be interested in investment
Playa Escondilla in Costa Rica

In an act recently signed into law by President Carlos Alvarado, the previous minimum investment needed to receive residency has been reduced from $200,000 to $150,000, with beneficiaries enjoying resident status for a period of ten years.

Applicable investment in Costa Rica includes the likes of real estate, shares and securities, and productive projects or projects of national interest.

SEE ALSO: Key Requirements for Starting a Business in Costa Rica 

Meanwhile, income tax on funds entering the country has been eliminated, while taxes on the likes of property transfers have been reduced by 20%.

The scheme is intended to help breathe more life into the country’s economy after the turmoil of the global pandemic by encouraging more investors and retirees to relocate to the country. 

Before the pandemic, foreign investment represented 7.8%of gross domestic product (GDP), however it currently sits at approximately 3.5%, and the plan seeks to reinvigorate the influx of overseas capital.

Dependents and family members of those granted residency are also eligible for the same benefits, which also include tariff- and VAT-free import of up to two land, sea, or air transportation vehicles for personal or family use.

Costa Rica an attractive destination for investment

Costa Rica is known for being among the most stable countries in Latin America, and boasts some of the lowest violent crime statistics in the region. It is also one of the most prosperous, with GDP only dipping during one year between 1981 and 2019, when it hit $61.8 billion.

That growth saw a concomitant rise in prosperity, with gross national income reaching $11,700 per capita in 2019 — one of the highest in the region.

Buoyed by its prosperity and safety, Costa Rica has emerged as a particularly popular destination for foreign investment and retirees, with more than $2.5 billion in FDI entering the country in 2019

Today the country finds itself seeking to overcome the economic ructions of a pandemic that has battered many economies around the world.

However, prospects for recovery were recently boosted by an improved forecast for growth this year, which is now expected to hit 3.9% in 2021.

A snapshot of the Costa Rica economy as an investment destination
A snapshot of the Costa Rica economy

Biz Latin Hub can assist in Costa Rica

At Biz Latin Hub, we have experts on the ground in Costa Rica who can help you relocate to this prosperous Central American country. Whether you are interested in company formation, or investment in Costa Rica via property purchase, we have legal and accounting experts available to assist you every step of the way.

Contact us to discuss how we can help you in Costa Rica or any of the other 18 markets around Latin America and the Caribbean where we have teams in place.

Or read about our team and expert authors.

Key services offered by BLH including legal services, accounting & taxation, hiring & PEO, due diligence, tax advisory, and visa processing
Key services offered by Biz Latin Hub

The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.

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