COSTA RICA APPROVES LAW TO ATTRACT FOREIGN INVESTORS, RENTIERS, AND RETIREES

On June 22nd, 2021, the Costa Rican Congress approved the Bill of Law N. 22156 that will benefit Investors, ´Rentier´ (“Rentistas”), and Retirees that want to apply for a temporary residency in Costa Rica.

This Bill seeks to attract foreigners to move to Costa Rica by granting them a series of incentives and benefits as follows:

● Application: Benefits and incentives applies to those foreigners who are granted or have obtained a temporary residency as Investors, ´Rentiers´, or Retirees (hereinafter, the “Beneficiary” or “Beneficiaries”).

● Duty-Free Import Benefits:

• Household items: A one-time exemption will apply for importation taxes for household items. In specific situations, in which the household items have been destroyed or stolen, the Beneficiaries may replace them by buying such items in Costa Rica free from taxes.

• Vehicles: The Beneficiaries may import up to two vehicles for personal and family use under the Duty-Free Import regime.

• Instruments and materials for professional use: These items will also be exempted from importation taxes, but the beneficiary must demonstrate to the Tax Authorities that he/she needs these items for his/her professional activity.

● Income Tax Exemption: The amounts declared as income to apply for the benefits granted by this law, will be exempted from income tax; however, the income obtained or generated in the country resulting from investments performed in the national territory, will be taxed in accordance with the Costa Rican Income Tax Law.

● Transfer Tax Exemption: The beneficiaries that want to acquire a property will enjoy a 20% exemption on the total transfer tax to be paid that is 1,5% of the purchase price.

● Tax Payers: The beneficiaries will not be automatically considered as tax residents.

● Investment threshold for Investors: the minimum capital investment has been reduced to US$150,000.00 (before US$200,000.00) to apply for a residence in the investor category.

● Specialized attention platform before Immigration Authorities: The Immigration Authorities will create a specialized attention platform dedicated to beneficiaries to expedite application processes in these categories.

● Benefits Term: The benefits established by this law may only be requested in the first five (5) years after the Bill is published and, once granted, they will only be valid for ten (10) years.

It is important to mention that if the beneficiaries waive their immigration status or the Immigration Authorities cancel their migratory status within the term of this law, they must cancel the taxes from which they were exempted.

For more information about the temporary residence categories, contact us at info@caialegal.com.