Costa Rica passes the Law to Attract Investors, Rentistas and Pensionados. The Costa Rican Congress has approved in second debate legislative bill number 22.516 which is the Law to Attract Investors, Rentistas and Pensionados. Now that the legislature has passed the law it moves forward to the office of President Carlos Alvarado who must sign the bill into law. Once it becomes law it will be sent to the different agencies that are in charge of implementing the law which in this case are the Department of Immigration and the Ministry of the Treasury for the tax exemptions.
The government is betting that this law will incentivize baby boomers and investors to move to Costa Rica and spend in the local economy. To entice the move the law is providing the following:
- Import duty exemption on the import of your household items.
- Import of up to two vehicles for land transportation, air or sea. The original version of the law provided for the duty-free import of one automobile. The legislators expanded this exemption to now include two of them and they can be an automobile, boat, plane or helicopter. The regulations that will follow will provide more details of how this will work in practice.
- The income that you report as the basis for the application will be exempt from any Costa Rican income taxes. At the moment Costa Rica only applies territorial taxation so most foreign income is exempt anyway but this provides the added protection that should that change those that retired will protected from any tax on that income.
- Exemption of 20% of the total real estate transfer tax when you purchase real estate.
For the category of investors, this law has reduced the required investment from US$200,000 to $150,000. This means that to apply for Investor Residency you can invest in any of the methods authorized by the law with a minimum of $150,000 and you would qualify for this category.
For an overview of the law you can watch my video which reviews the approval process involved to pass this law here: