Bloomberg Línea — In 2021, Costa Rica passed a law to attract international remote workers and service providers, better known as “digital nomads”, and the regulations concerning the legal residence for such individuals in the country were published in July 2022.
The initiative arose in order to encourage long-stay visits to Costa Rica and increase the investment of foreign resources in the country, through the creation of opportunities as well as immigration and tax benefits.
The law created a framework to allow the residency of foreign workers who are able to demonstrate stable employment with a foreign employer. Not only are such foreigners eligible for residency, but they can also bring in dependents if the applicant’s wages meet a sufficient threshold.
Among other benefits, individuals can leave and enter the country as many times as they wish, with the only limitation being that, if they decide to apply for an extension of their visa for an additional year, they have to prove that they were in the country for at least six months during the term of their first visa.
Taxes
The law also provides a guarantee to eliminate double taxation, meaning that individuals will not pay taxes in Costa Rica on income already taxed in the country from which they are paid.
“Here it is guaranteed that there is no double taxation, but what they do pay in Costa Rica is value added tax (VAT), which adds to the revenues of the public treasury,” explained Carlos Ricardo Benavides, a former congress member who backed the law in the Legislative Assembly’s 2018-2022 period.
Another benefit of the initiative is the possibility of opening a savings account in Costa Rica, and foreigners may use a driver’s license issued abroad, as long as this document is still valid.
In addition, the legal regulation authorizes the entry into the country without payment of taxes of basic items required to carry out their work, such as computers, cellphone, camera and any other specialized equipment they may need.
Requirements for the visa
Applicants must demonstrate that they have a minimum income of $3,000 per month, or $4,000 if they come with dependents, amounts which are higher than what some other countries require.
“We decided on those amounts, because it seemed to us that we should determine from now on the type of visitor that Costa Rica wants to promote, and which is someone with a basic ability to leave money in our communities,” said Benavides during his participation in a virtual lecture organized by Lead University.
The law considers the following as dependents: spouse, unmarried children under 25 years of age who are economically dependent on the applicant, children over 25 years of age who have a physical or cognitive condition, but which must be proven by a medical authority.
Also, the applicant’s parents must prove such dependency.
Applicants must also prove that they have medical insurance for the entire term of the visa, in the event of an accident or illness while in the country, as medical expenses will not be paid by the state of Costa Rica.
How to apply
To apply, foreigners can find the necessary documents on the website of the Dirección General de Migración y Extranjería (migracion.go.cr), and must submit an online application or schedule an appointment at an immigration office in Costa Rica to apply in person.
The cost per application is $100, plus $90 for the documents to legally remain, and processing time can range from 15 to 30 days.
“Some migratory requirements that are established for other categories of provisional temporary resident visas are not included in the visa for digital nomads, making it one of the conditions for staying with the least amount of requirements that exist in our law,” said Benavides.
This means that the requirements for a digital nomad to stay in Costa Rica are exactly the same as those of a regular tourist, with the exception of having to prove income.
The cost of living in Costa Rica
The travel agency My Costa Rica gives some recommendations for people looking to live temporarily in the Central American country. For example, in some areas, the cost of living is cheaper, in relation to the Greater Metropolitan Area, which includes the four largest cities: San José, Alajuela, Cartago and Heredia.
While the cost of living has increased over the last decade, housing, medical expenses, and transportation remain very affordable. A monthly income of $2,000 allows for a high standard of living, as average rents range from $450 to $850 per month for two- and three-bedroom homes.
Public buses are affordable in price and widely used by locals. A four-hour trip can cost $6. For food, a common way to save money is to go where the locals shop, such as farmers’ markets to buy fruits and vegetables.