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.
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.
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.
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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.
Biz Latin Hub can assist in Costa Rica
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