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Tax guide

How to set up your taxes in Costa Rica

by Luke Poulson
calendar iconJan 18
clock icon10 min

Who will this be the most beneficial for? Remote workers and digital nomads who plan on spending more than 183 days in Costa Rica. Keep in mind that this visa is not a path to tax residency.

Difficulty of applying from 1-5: 4 Are there any citizens of specific countries that can’t apply? There are no current restrictions.

What % of the process can be done online? 0%

How to set up your taxes in Costa Rica as a digital nomad and remote worker

To obtain a preferential tax rate in Costa Rica, you have to get a Rentista Visa first. Once you have gone through this process, you’ll be looking at a tax rate of approximately 25%.

Although vaguely stated within the legislation, digital nomads should not have to pay tax on foreign-sourced income such as dividends.

Is Rentista Visa the best option for digital nomads and remote workers wanting to stay in Costa Rica for longer?

While there are plans for Costa Rica's nomad visa, it’s not clear how to apply yet. It’s been in the works for a few years and might become available this year. However, we don’t know the details of this upcoming visa and can’t guarantee it will have any tax incentives.

As for the Rentista Visa, anyone can apply for temporary residency within the country, allowing them to stay for 2 years. After that, you can extend the visa for another year. If you stayed for more than 183 days per year in the country for 3 years, you can apply for permanent residency status. As a permanent resident, you’re only obliged to spend 72 consecutive hours within the country per year to maintain it! Permanent residency status requires renewal every five years.

How it works

Social Security Contributions

Unfortunately, the official guidelines relating to this area are not clear regarding which tax applies to whom. There’s a possibility that an additional 10.5% to 18.62% social security contribution could be applied to you in addition to the taxes you’re already paying. This will depend on your situation and what exactly you’ll be paying for in Costa Rica. Suppose you have a health insurance plan in place already. In that case, it’s likely that you will not have to pay this contribution, although, much like the taxation amounts mentioned above, there is no clarity in official legislation relating to this. A visa tailored to digital nomads will hopefully clarify information.

Costa Rican tax brackets for those on the Rentisa Visa:

*These rates are adjusted on a yearly basis. Conversion taken at: 1.00 Costa Rican Colon = 0.0015169313 USD. Due to low brackets, the taxation for self-employed nomads and remote workers will be approximately 25%.

Pros & Cons

🟢 Costa Rica is one of the most desirable locations for nomads and travelers alike due to its pristine beaches and lush tropical forests. 🟢 Good infrastructure for remote work in most places. 🟢 You can enter the country on a tourist visa and then apply for a long-term residency. 🟢 There are no strict visa laws in place regarding temporary entries. 🟢 Those who obtain permanent residency are only expected to stay 72 consecutive hours within the country to maintain it.

🔴 All documents you need to present to gain this visa have to be in Spanish and notarised. 🔴 The legislation surrounding taxation for non-residents is often convoluted or vague. 🔴 To go through the visa process, you need to do it within the country, and there is no official online resource available to expedite the process. 🔴 A significant bank deposit ($60,000) has to be made to qualify for the visa (hopefully the digital nomad visa will bypass this.) 🔴 The application process can take between 12-15 months.

How to apply

Applying for residency in Costa Rica is done through the Direccion General de Migracion y Extranjeria (the General Directorate of Immigration and Nationality), better known as Migracion. You can find info on different types of residency in the Personas Extranjeras section.

To obtain this visa, you’ll have to:

  • Make a bank deposit of $60,000 USD to a local bank.

  • Get a commitment letter stating that at least $2,500 USD of funds will be made available each month (from your employer or your previous bank statements if you’re a freelancer.)

  • Proof of regular income amounting to $2,500 from a guaranteed source must be presented. If you have dependents outside your immediate family, these requirements could be higher.

  • 2 passport photos.

  • Proof of fingerprinting by the Ministerio de Seguridad Publica (Ministry of Public Safety).

  • Proof of registration within your country's embassy in Costa Rica.

  • A birth certificate, complete with apostille (a special stamp usually issued by your local government proving the document is valid) and a police record, also apostilled.

  • You may also need to provide a cover letter explaining why you wish to stay in Costa Rica.

  • As mentioned, all documents must be presented and notarised in Spanish.

It’s important to note that residency is achieved individually and cannot be extended to relatives if they do not meet the time requirements and monetary criteria for non-dependents.

Fees |While there are no official fees related to the application process, the bank deposit requirement of $60,000 still makes this a capital-intensive venture for any digital nomad.

How does Costa Rica benefit from this system?

The Rentista program is specifically designed to attract high-income individuals into the country and encourage investment in Costa Rica.

Disclaimer: Borderless and SafetyWing do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own independent tax, legal and accounting advisors before making any decisions or engaging in any transaction.

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