Costa Rica Plans To Attract Foreign Retirees And Rentiers/
Recently, deputies of the Tax Committee unanimously approved a bill, according to which the minimum amount of investment in Costa Rica was reduced from US$200,000 to US$150,000. This idea was adopted to stimulate the arrival of foreigners to the country to boost the economy.
“This project will help the economic reactivation of our country, since for more than four decades our country has granted certain benefits to attracting investors, rentiers and pensioners; Due to what our country is living under COVID and worldwide, this project was presented to be able to provide benefits, to be able to contribute, to attract new capital to the Costa Rican economy." - says the legislator Mileidy Alvarado.
The text increases the contribution of these investments to the status of the law, which is currently stipulated in the provisions of the Ley de Migración y Extranjería (Law on Immigration and Aliens), which sets the amount at US$200,000.
Article 3 of the Immigration and Aliens Act states that “to qualify for a temporary residence, the foreigner must contribute a minimum investment capital of US$150,000, which includes real estate or registrable, shares, securities and productive projects or projects of national interest.".
With a decrease in investment requirements, the country can become even more interesting for investors and compete with Panama, which has interesting investment programs.
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The law already allows the entry and temporary stay of investors, retirees, and renters for periods ranging from three months to two years, with the possibility of renewal.
In order for retirees to participate in the program, they must have accumulated lifetime pension or retirement income from abroad of at least US$1,000. The minimum income is US$2,500 for 24 months (if the foreigner applies for a special category of rentier).
The text will also govern the following benefits:
One-time exemption from customs duties on the import of household items: household items, household appliances, decor items, kitchen and bathroom accessories, bedding, and much more.
If the rehabilitated assets are transferred, the rehabilitated tax must be paid; and in case of loss, they can be replaced by tax-exempt ones.
Investors, retirees, or rentiers can import a vehicle for personal or family uses free of taxes and import duties, which can be sold or transferred to third parties, also exempt from liability only if the law expires.
The exemption can be one-time: in order to import another vehicle, the exempt beneficiary must first pay the taxes of the previous vehicle. Another car can be imported tax-free in case of loss due to theft, fire, or traffic accident.
Amounts declared as income under this rule, such as monthly pension received from abroad, are not subject to income tax. Income tax is only levied on income earned in Costa Rica that is the product of their investment. However, in case of cancellation of the residence permit, the foreigner must pay all taxes exempted by law.
Anyone who changes or falsifies documents in order to benefit from this initiative must pay exempt taxes and incur a 10% penalty on the exempt taxes.
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