Consider a Move to Costa Rica

I.

Costa Rica: Country Overview

Costa Rica occupies a narrow strip of Central America between Nicaragua to the north and Panama to the south, bordered by the Pacific Ocean on one side and the Caribbean Sea on the other. Its geography is extraordinary — cloud forests, active volcanoes, pristine beaches, and biodiversity that accounts for nearly 6% of the world's species despite covering just 0.03% of its surface. For a country of five million people, it punches far above its weight in global reputation.

What distinguishes Costa Rica from its Central American neighbours is political stability. The country abolished its military in 1948 — a decision that redirected defence spending into education and healthcare — and has maintained uninterrupted democratic governance ever since. It consistently ranks among the top countries in Latin America for rule of law, press freedom, and quality of life. The capital San José is a modern, functional city with good infrastructure, international schools, and a growing expat community.

From a tax perspective, Costa Rica operates on a strict territorial system. Only income derived from Costa Rican sources is subject to local taxation. Foreign-sourced income — dividends, capital gains, rental income, or business profits generated outside the country — is entirely exempt from Costa Rican tax. For internationally mobile professionals, investors, and entrepreneurs whose income originates elsewhere, this creates a genuinely favourable tax environment without requiring complex structures or offshore arrangements.

The country is not a zero-tax jurisdiction — those earning locally will pay income tax at progressive rates up to 25%, and corporate tax sits at 30%. But for those whose wealth and income flows are international, Costa Rica offers a clean, straightforward exemption that is embedded in the tax code rather than dependent on special applications or limited-time schemes. The territorial principle has been in place for decades and shows no signs of changing.

Costa Rica has also positioned itself as one of the most accessible countries in the region for foreign residents. A range of visa categories — including a well-structured Digital Nomad Visa launched in 2022 — makes legal residency achievable for remote workers, retirees, and investors. The country's Pensionado and Rentista programmes have attracted thousands of foreign retirees for decades, and the infrastructure to support expat life is well established.

II.

Putting Costa Rica on the Map

There is a word Costa Ricans use that has no direct translation: pura vida. Pure life. It is a greeting, a farewell, a philosophy, and a way of measuring whether a day was well spent. You hear it everywhere — from the street vendor handing you a mango, from the taxi driver navigating San José's traffic, from the surfer emerging from a wave at Tamarindo. It is not a marketing slogan. It is the genuine operating system of a culture that has decided, collectively, that life is too short for unnecessary stress.

The landscape is almost aggressively beautiful. In the Central Valley, where most of the population lives, the air is cool and clean at 1,200 metres elevation, the coffee is grown on the hillsides above the city, and on clear mornings you can see Irazú volcano from your kitchen window. Drive two hours in any direction and you are somewhere completely different — the dry forests of Guanacaste, the cloud forests of Monteverde, the Caribbean coast with its Afro-Caribbean culture and year-round warmth, the Osa Peninsula with some of the most biodiverse jungle on earth.

What makes Costa Rica unusual among Central American countries is the depth of its civic culture. Education has been free and compulsory since 1869. The literacy rate is 97%. There are more teachers than soldiers — because there are no soldiers. The healthcare system, the Caja Costarricense de Seguro Social, is one of the most comprehensive in Latin America and is accessible to legal residents. Life expectancy is 80 years, higher than the United States.

For those considering relocation, the practical infrastructure is well developed. San José has international schools, private hospitals, reliable internet, and a growing community of digital nomads and entrepreneurs. The country runs on 99% renewable energy. English is widely spoken in business and tourist areas. The time zone (UTC-6) aligns well with both US East Coast and European morning hours, making it genuinely functional for remote work across multiple continents.

Costa Rica is not for everyone. It is not a glamour destination in the way that Monaco or Dubai are. The roads outside the capital can be rough. Bureaucracy moves slowly. The rainy season is real. But for those who value nature, stability, genuine warmth, and a tax system that leaves foreign income untouched, it is one of the most underrated relocation destinations in the world.

III.

Tax Advantages: What Costa Rica Has to Offer

The defining feature of Costa Rica's tax system is its territorial scope. The Ministerio de Hacienda taxes only income that originates within Costa Rica. Dividends received from foreign companies, capital gains on assets held abroad, rental income from overseas properties, and business profits generated outside the country are all outside the reach of the Costa Rican tax authority. This is not a special scheme or a temporary incentive — it is the fundamental architecture of the tax code, and it has been in place for decades.

For an internationally mobile professional or investor, this means that relocating to Costa Rica can effectively eliminate tax on the majority of their income without requiring offshore structures, complex holding arrangements, or applications for special status. The exemption is automatic and applies to all tax residents equally. There is no minimum investment requirement, no application process, and no annual renewal.

Inheritance tax does not exist in Costa Rica. There is no wealth tax. Capital gains on Costa Rican assets are taxed at a flat 15% — relatively modest by international standards — and gains on foreign assets are not taxed at all. For those with significant investment portfolios held internationally, this combination is genuinely attractive.

Costa Rica's Free Trade Zone regime offers additional benefits for businesses. Companies operating within designated Free Trade Zones can access exemptions from import duties, income tax, VAT, and export taxes for periods of up to 20 years. While this is primarily relevant for manufacturing and service export businesses, it illustrates the country's willingness to use tax policy as a tool for attracting foreign investment.

The territorial system does have limits. Income earned from Costa Rican clients, Costa Rican employers, or Costa Rican-based business activities is taxable at standard rates. Those who relocate and then build a local business or take local employment will pay Costa Rican income tax on those earnings. The advantage is specifically for those whose economic activity remains international after relocation.

IV.

Tax Rates at a Glance

The most important tax rates in Costa Rica are as follows. Note that these have been simplified and should be used as general guidance only.

V.

Tax Residency: What Triggers It

Costa Rica determines tax residency primarily through physical presence. An individual who spends more than 183 days in Costa Rica during a fiscal year — whether continuously or discontinuously — is considered a tax resident. The fiscal year runs from 1 October to 30 September. Sporadic absences during the year are counted as days present unless the taxpayer can provide a tax residency certificate from another country.

The 183-day rule is the primary trigger, but it is not the only one. The Ministerio de Hacienda may also consider tax residency established if an individual's main economic interests or vital interests are centred in Costa Rica — for example, if a person's family, primary residence, or principal business activities are located there, even if they spend fewer than 183 days in the country. In practice, the day-count rule is the most commonly applied test.

Tax residency and immigration residency are separate concepts in Costa Rica. A person can hold a tourist visa or a Digital Nomad Visa without becoming a tax resident, provided they do not exceed the 183-day threshold. Conversely, holding a permanent residency permit does not automatically make someone a tax resident — the day-count rule still applies. This distinction is important for those who want immigration security without triggering tax obligations.

Once tax residency is established, the territorial principle applies: only Costa Rican-sourced income is taxable. Tax residents must file an annual tax return with the Ministerio de Hacienda if they have taxable income. The filing deadline is typically in March for the previous fiscal year. Non-residents who earn Costa Rican-sourced income are subject to withholding tax at source rather than filing obligations.

VI.

Double Tax Treaties

Costa Rica has a limited but growing network of double tax treaties. As of 2025, the country has signed comprehensive DTAs with Germany, Spain, Mexico, and the United Arab Emirates. Additional treaties are under negotiation with several other countries, reflecting the government's efforts to expand its international tax cooperation framework.

The limited treaty network is less of a practical concern than it might appear, precisely because of the territorial tax system. Since Costa Rica does not tax foreign-sourced income, the risk of double taxation on international income is structurally low. A Costa Rican tax resident receiving dividends from a German company, for example, would not pay Costa Rican tax on those dividends regardless of whether a DTA exists — the territorial principle already excludes them.

Where treaties do matter is in the context of withholding taxes imposed by the source country. If a Costa Rican resident receives income from a country that imposes withholding tax at source, a DTA can reduce that withholding rate. Without a treaty, the resident must rely on the domestic rules of the source country. For residents with significant income from Germany or Spain — both treaty partners — the existing agreements provide useful protections.

Costa Rica is a member of the OECD's Global Forum on Transparency and Exchange of Information and participates in the Common Reporting Standard. Financial information about Costa Rican residents is automatically shared with tax authorities in participating countries. This is an important consideration for those relocating from high-tax jurisdictions who may still have financial accounts or assets in their home country.

VII.

Avoid Remaining Tax Resident at Home

Moving to Costa Rica for tax purposes only works if you genuinely cease to be a tax resident of your home country. Many high-tax jurisdictions — Germany, the United Kingdom, France, and others — have anti-avoidance rules specifically designed to prevent residents from claiming to have relocated while maintaining their economic and personal ties at home. A superficial relocation that does not reflect genuine change of life centre will be challenged.

The criteria that home-country tax authorities examine include: where you maintain a permanent home, where your family lives, where you spend the majority of your time, where your economic interests are centred, where you hold bank accounts and investments, where your social and professional networks are based, and where you are registered for social insurance and healthcare. A person who registers in Costa Rica but continues to live primarily in Germany, maintain a family home in Munich, and conduct most of their business activities in Germany will remain a German tax resident regardless of their Costa Rican address.

Genuine relocation requires genuine change. This means physically spending the majority of your time in Costa Rica, establishing a real home there, transferring your primary banking relationships, and demonstrating that your centre of life has moved. It also means formally deregistering from your home country's tax system — a step that many people overlook and that can have significant consequences if not done correctly.

Costa Rica's territorial system is a genuine advantage, but it must be paired with a clean exit from your previous tax jurisdiction. This is where professional advice is essential. The rules vary significantly between countries, and the consequences of getting it wrong — continued tax liability in your home country plus potential penalties — can be severe. We help clients navigate this process as part of our relocation advisory service.

VIII.

Tax Considerations When Leaving Your Home Country

Before you can benefit from Costa Rica's territorial tax system, you must successfully exit your home country's tax net. Several countries impose exit taxes — taxes levied on unrealised capital gains at the moment of departure — that can create significant liabilities for those with substantial investment portfolios or business interests.

Germany's exit tax (Wegzugsteuer) applies to shareholders holding more than 1% in a corporation at the time of departure, treating the shares as if they had been sold at market value. The United States imposes an expatriation tax on high-net-worth individuals who renounce citizenship or long-term residency. France has an exit tax on unrealised gains on substantial shareholdings. The UK does not currently have a formal exit tax but has extensive anti-avoidance rules for departing residents.

The timing and structure of your departure can significantly affect the exit tax liability. In some cases, it is possible to defer payment, restructure holdings before departure, or take advantage of treaty provisions that limit the home country's taxing rights. In other cases, the liability is unavoidable and must be factored into the financial planning for the move.

Costa Rica itself does not impose an exit tax on departing residents. The $29 departure tax at airports is a travel fee, not a tax on assets or income. This means that once you are established in Costa Rica, future departures — whether to another country or back to your home country — do not trigger additional tax liabilities under Costa Rican law.

IX.

Company Setup & Corporate Tax

Costa Rica's most common business structure for foreign entrepreneurs is the Sociedad Anónima (S.A.) — equivalent to a limited company or corporation. It can be formed with a minimum of two shareholders and one director, and there is no minimum capital requirement for most activities. Formation typically takes 2–4 weeks through a local notary and costs approximately $1,000–$2,000 in professional fees and registration costs. The S.A. is the preferred vehicle for holding real estate, operating businesses, and managing investments.

The corporate income tax rate is 30% for companies with annual revenues above CRC 119 million (approximately $220,000). Smaller companies benefit from reduced rates: 5% on the first CRC 5.7 million of income, 10% on the next bracket, and 20% on income up to the threshold. Companies operating within Free Trade Zones can access full exemptions from corporate income tax for up to 20 years, making this regime highly attractive for export-oriented service businesses and technology companies.

The territorial principle applies equally to companies. A Costa Rican company is only taxed on income derived from Costa Rican sources. A holding company incorporated in Costa Rica that receives dividends from foreign subsidiaries, or that holds foreign investments, would not pay Costa Rican corporate tax on those foreign earnings. This makes Costa Rican companies potentially useful as holding vehicles for internationally mobile entrepreneurs — though the substance requirements and anti-avoidance rules of the home country must always be considered.

We assist clients with company formation, structure planning, and ongoing compliance in Costa Rica. Setting up the right structure is something we do regularly for clients relocating to Costa Rica. Learn more about our company setup services →

X.

Who Should (and Shouldn't) Move to Costa Rica

Costa Rica works well for: Remote workers and digital nomads whose clients and income sources are entirely outside Costa Rica. Retirees with pension income, investment returns, or rental income from abroad. Entrepreneurs running internationally-oriented businesses with no Costa Rican revenue. Investors holding foreign portfolios, real estate, or business interests. Those who value political stability, natural beauty, and a well-developed expat infrastructure alongside their tax planning.

Costa Rica is less suitable for: Those who plan to work for Costa Rican employers or build a locally-focused business — local income is taxed at standard progressive rates up to 25%. Those who require an extensive double tax treaty network. Those from countries with aggressive exit tax regimes who have not yet addressed their departure tax position. Those who need a zero-tax environment across all income types — Costa Rica taxes local income, capital gains on local assets, and local dividends.

The ideal Costa Rica resident is someone who has decoupled their income from their physical location — a consultant billing international clients, an investor living off foreign dividends, a retiree drawing a pension from abroad, or an entrepreneur whose business operations are based in another jurisdiction. For this profile, Costa Rica offers a compelling combination of tax efficiency and quality of life that is difficult to match in the region.

Those with more complex situations — mixed local and foreign income, significant assets in high-tax jurisdictions, US citizenship — should seek professional advice before committing to a move. The territorial system is straightforward in principle but requires careful planning in practice, particularly around the exit from the home country tax system.

XI.

Visas and Residence Permits

Costa Rica offers several pathways to legal residency, making it one of the more accessible countries in Latin America for foreign nationals. Citizens of many countries — including the EU, UK, US, Canada, and Australia — can enter visa-free for up to 90 days, which provides a useful window to explore the country before committing to a longer-term arrangement.

Digital Nomad Visa (Nómada Digital): Launched in 2022, this visa is available to remote workers and freelancers who earn at least $3,000 per month from foreign sources (or $4,000 for those with dependants). It grants a one-year stay, renewable for a further year, and does not require the holder to pay Costa Rican income tax on their foreign earnings. It is not a pathway to permanent residency but provides a legal framework for extended stays.

Pensionado Visa: For retirees with a guaranteed monthly pension income of at least $1,000 from a government or private pension fund. This is one of Costa Rica's oldest and most popular residency programmes, granting two-year renewable residency with a path to permanent residency after three years.

Rentista Visa: For those with a guaranteed monthly income of at least $2,500 from investments, rental income, or other passive sources. Similar terms to the Pensionado — two-year renewable with a path to permanence.

Investor Visa: Requires a minimum investment of $150,000 in Costa Rican real estate or a registered business. Grants two-year renewable residency. Permanent residency is available after three years of legal residency under any category. Citizenship requires seven years of legal residency and a basic Spanish language test.

XII.

Citizenship & Passport

Costa Rican citizenship by naturalisation requires seven years of legal residency. The process involves demonstrating integration into Costa Rican society, passing a basic Spanish language and civics test, and showing no serious criminal record. Costa Rica permits dual citizenship, meaning you do not need to renounce your existing nationality to become a Costa Rican citizen.

The Costa Rican passport provides visa-free or visa-on-arrival access to approximately 150 countries, including the Schengen Area, the United Kingdom, and most of Latin America. While it is not among the world's most powerful passports, it is a solid travel document that significantly expands mobility compared to many developing-country passports. For those from countries with restricted passports, Costa Rican citizenship can be a meaningful upgrade.

Citizenship by descent is available to children of Costa Rican citizens. There is no citizenship by investment programme — the only route to citizenship is through naturalisation after the required residency period.

XIII.

Banking in Costa Rica

Costa Rica has a well-developed banking sector with both state-owned and private institutions. The main state banks — Banco Nacional de Costa Rica, Banco de Costa Rica, and Banco Crédito Agrícola de Cartago — are among the most stable in Central America and offer a full range of retail and commercial banking services. Private banks including BAC Credomatic, Scotiabank, and Davivienda also operate extensively.

Opening a bank account as a foreigner is possible but requires patience. Non-residents can open accounts at some state banks, but with restrictions — Banco de Costa Rica, for example, limits non-resident accounts to $1,000 per month in deposits. Legal residents have access to the full range of banking services. The documentation typically required includes a passport, proof of address, proof of income or source of funds, and in some cases a reference letter.

Both US dollars and Costa Rican colones are widely accepted in the country. Most international transactions are conducted in dollars, and many businesses quote prices in both currencies. ATMs dispense both currencies. The banking system is generally reliable, though digital banking infrastructure lags behind European standards.

We assist clients with bank account opening as part of our relocation service. Navigating the documentation requirements and choosing the right institution for your specific needs can save significant time and frustration. Learn more about our offshore banking services →

XIV.

What Makes Costa Rica Attractive

Beyond the tax advantages, Costa Rica offers a quality of life that is genuinely difficult to replicate elsewhere in Latin America. The combination of political stability, environmental quality, healthcare access, and cultural warmth creates a living environment that attracts not just tax optimisers but people who simply want to live well.

The healthcare system deserves particular mention. The Caja Costarricense de Seguro Social (CCSS) is a universal public healthcare system that legal residents can access by paying monthly contributions based on income. Private healthcare is also excellent and affordable by international standards — a consultation with a specialist typically costs $50–$100, and private hospital care is a fraction of US prices. Many expats use a combination of private care for routine needs and the CCSS for major procedures.

The country's commitment to environmental sustainability is remarkable. Costa Rica generates over 99% of its electricity from renewable sources — primarily hydroelectric, geothermal, and wind. It has protected approximately 30% of its territory as national parks and reserves. For those who value living in a country that takes environmental responsibility seriously, Costa Rica is genuinely exceptional.

The expat community is large and well-established, particularly in the Central Valley, Guanacaste, and the Southern Pacific coast. English-language resources, international schools, expat social networks, and professional services catering to foreign residents are all readily available. The learning curve for settling in is gentler than in many other Latin American countries.

XV.

Cost of Living in Costa Rica

Costa Rica is more expensive than most of its Central American neighbours but significantly cheaper than Western Europe or North America. A comfortable lifestyle in San José or the Central Valley — including a modern apartment, good food, private healthcare, and regular travel — is achievable for $2,500–$4,000 per month for a couple. Those who choose to live in smaller towns or rural areas can live well for considerably less.

Rent is the largest variable. A modern one-bedroom apartment in a good neighbourhood of San José costs $700–$1,200 per month. A two-bedroom apartment suitable for a family runs $1,000–$1,800. In beach communities like Tamarindo or Manuel Antonio, prices are higher — $1,200–$2,500 for a comfortable two-bedroom. In the Central Valley towns of Escazú or Santa Ana, which have large expat populations and good amenities, expect to pay $900–$1,600 for a two-bedroom.

Food costs are moderate. Eating at local sodas (small family restaurants) costs $4–$8 per meal. Mid-range restaurants run $15–$30 per person. Supermarket shopping for a couple costs $400–$600 per month depending on how much imported food you buy. Local produce — fruits, vegetables, rice, beans — is excellent quality and very affordable.

Transport costs depend heavily on whether you own a car. Public transport (buses) is cheap and extensive but slow. Uber operates in the main urban areas. Owning a car is expensive — import duties make vehicles significantly more costly than in the US or Europe, and fuel prices are comparable to European levels. Many expats in urban areas manage without a car; those in rural or beach areas find it essential.

XVI.

Retiring in Costa Rica

Costa Rica has been a top retirement destination for North Americans and Europeans for decades, and for good reason. The Pensionado Visa provides a straightforward legal pathway for retirees with a pension income of $1,000 per month or more. The combination of affordable healthcare, pleasant climate, natural beauty, and a well-established expat community makes it one of the most practical retirement destinations in the world.

From a tax perspective, retirees are among the primary beneficiaries of the territorial system. Pension income received from a foreign government or private pension fund is not Costa Rican-sourced and therefore not subject to Costa Rican income tax. Investment returns on foreign portfolios are similarly exempt. A retiree living in Costa Rica on a combination of foreign pension income and investment returns can effectively pay zero Costa Rican income tax on their entire income.

The healthcare situation is particularly compelling for retirees. Access to the CCSS public system is available to legal residents, and the quality of care — particularly for chronic conditions and routine procedures — is good. Private hospitals in San José, including CIMA Hospital and Clínica Bíblica, offer international-standard care at a fraction of US prices. Many US retirees find that their healthcare costs drop dramatically upon moving to Costa Rica.

XVII.

US Citizens Moving to Costa Rica

US citizens face a unique challenge when relocating abroad: the United States taxes its citizens on worldwide income regardless of where they live. Moving to Costa Rica does not eliminate US tax obligations. However, several mechanisms exist to reduce or eliminate double taxation for Americans living in Costa Rica.

The Foreign Earned Income Exclusion (FEIE) allows qualifying US citizens living abroad to exclude up to $130,000 (2025 figure) of foreign-earned income from US taxation. For tax year 2026, the limit rises to $132,900, adjusted annually for inflation. To qualify, you must meet either the bona fide residence test (established resident of a foreign country) or the physical presence test (330 days outside the US in a 12-month period). The FEIE applies to earned income — wages and self-employment income — but not to passive income such as dividends, interest, or rental income.

The Foreign Tax Credit (FTC) allows US citizens to offset US tax liability with taxes paid to foreign governments. Since Costa Rica taxes only local-source income, and most US citizens in Costa Rica earn foreign-source income that Costa Rica does not tax, the FTC is often of limited use in the Costa Rica context. The FEIE is typically the more relevant mechanism.

• File Form 2555 to claim the FEIE
• File FinCEN 114 (FBAR) if foreign financial accounts exceed $10,000 at any point in the year
• File Form 8938 (FATCA) if foreign financial assets exceed $200,000 (single filer abroad)
• There is no US-Costa Rica tax treaty — all relief comes through domestic US provisions

US citizens considering renunciation of citizenship to escape worldwide taxation should be aware of the expatriation tax rules under IRC Section 877A, which can impose significant tax on unrealised gains for high-net-worth individuals. This is a complex area that requires specialist US tax advice before any decisions are made.

XVIII.

Preparation & Tax Planning

A successful relocation to Costa Rica begins well before you board the plane. The most important preparatory steps are on the tax side: ensuring that you exit your home country's tax system cleanly, that your assets and income structures are optimised for the Costa Rican territorial system, and that any exit tax liabilities are addressed before departure.

Timing matters significantly. In many countries, tax residency is determined on a calendar-year basis, and the date of departure affects which year's income is subject to home-country tax. Restructuring investments or business interests before departure — rather than after — can make a substantial difference to the overall tax position. In some cases, it makes sense to delay the move by a few months to optimise the timing.

On the Costa Rican side, the preparation involves choosing the right visa category, understanding the documentation requirements, and — if relevant — setting up the appropriate business or holding structure before or shortly after arrival. The Sociedad Anónima formation process is straightforward but takes time, and having the right structure in place from the beginning avoids complications later.

We work with clients through the full preparation process — from initial tax analysis and exit planning to visa applications, company formation, and ongoing compliance. The goal is to arrive in Costa Rica with everything in order, so that the first chapter of your new life is about living, not paperwork.

XIX.

CRS & Automatic Exchange of Information

Costa Rica is a signatory to the Common Reporting Standard (CRS), the OECD's framework for automatic exchange of financial account information between tax authorities. This means that Costa Rican financial institutions report information about account holders to the Ministerio de Hacienda, which in turn shares this information with the tax authorities of other participating countries.

For those relocating to Costa Rica from a CRS-participating country, this has two implications. First, your home country's tax authority will receive information about your Costa Rican financial accounts — which reinforces the importance of properly exiting the home country tax system before establishing accounts in Costa Rica. Second, if you maintain financial accounts in other countries, those countries' tax authorities will report your account information to Costa Rica if they are also CRS participants.

Costa Rica also has a FATCA Intergovernmental Agreement (IGA) with the United States, meaning that Costa Rican financial institutions report information about US persons to the IRS. US citizens living in Costa Rica should be aware that their Costa Rican bank accounts are visible to the IRS.

The era of financial privacy through offshore accounts is over. The CRS and FATCA frameworks mean that tax authorities have unprecedented visibility into cross-border financial flows. Compliant tax planning — genuinely relocating, properly exiting the home country tax system, and filing all required returns — is the only sustainable approach.

XX.

Buying Real Estate in Costa Rica

Costa Rica has one of the most foreigner-friendly real estate markets in Latin America. Foreign nationals have the same property rights as Costa Rican citizens and can purchase property directly in their own name without restrictions. There is no requirement to be a resident, to have a local partner, or to obtain government approval. The legal framework for property ownership is well established and generally reliable.

Property prices vary enormously by location. In San José's upscale suburbs of Escazú and Santa Ana, apartments average $2,500–$3,500 per square metre. In beach communities, prices range from $1,500 per square metre in less developed areas to $5,000+ in prime locations like Tamarindo or Manuel Antonio. The Central Valley offers the best value for urban living, while coastal properties command a premium for lifestyle reasons.

One important caveat: a significant portion of Costa Rican coastal land is classified as Maritime Zone (Zona Marítimo Terrestre), which extends 200 metres from the high-tide line. The first 50 metres are public domain and cannot be privately owned. The remaining 150 metres can be leased from the municipal government on a concession basis but cannot be purchased outright. Buyers should always verify the legal status of coastal properties before purchasing.

Transfer taxes are 1.5% of the registered value, plus notary fees of approximately 1.25%. Annual property tax is 0.25% of the registered value — very low by international standards. Capital gains on the sale of Costa Rican real estate are taxed at 15% on the gain, calculated from the registered purchase price. Properties held through a Sociedad Anónima may have different tax treatment and should be reviewed with a local tax adviser.

XXI.

What Others Say About Costa Rica

"If there is no peace in Central America, it will not be because Costa Rica, and myself as president, have not done what is necessary to obtain peace."

"During the 41 years that have elapsed since Costa Rica abolished its army, our fundamental freedoms have never been threatened, nor do we know a shameful history of repression."

"Costa Rica, with its tourist-based economy and lack of a national army, has focused on keeping safe its beaches, parks and other public draws. It is one of the safest countries in Central America."

XXII.

Formalities for Moving to Costa Rica

The practical steps for relocating to Costa Rica depend on your chosen visa category and home country. The general sequence is: enter on a tourist visa or visa-free entry, identify and apply for the appropriate residency category, gather the required documentation, and submit the application through the Dirección General de Migración y Extranjería (DGME).

Documentation requirements typically include: a valid passport, a police clearance certificate from your home country (apostilled), proof of income or pension (apostilled), birth certificate (apostilled), and in some cases a marriage certificate. All documents in languages other than Spanish must be officially translated by a certified translator. The apostille process — having documents certified for international use — can take several weeks and should be started well in advance.

Processing times for residency applications vary significantly — from a few months to over a year in some cases. During the processing period, applicants can remain in Costa Rica legally by making periodic border runs (leaving and re-entering the country) to reset the tourist entry period, though this is not a long-term solution. Some applicants choose to use an immigration lawyer to manage the process, which can reduce errors and delays.

On the home-country side, the key formalities are deregistration from the tax system, notification of relevant authorities (pension providers, banks, healthcare), and — in some countries — formal deregistration of residence. These steps are as important as the Costa Rican immigration process and should not be overlooked.

XXIII.

How We Help With Your Move to Costa Rica

Relocating to Costa Rica involves navigating two parallel processes simultaneously: exiting your home country's tax and administrative systems cleanly, and establishing yourself correctly in Costa Rica. Both require specialist knowledge, and mistakes in either can be costly. We provide end-to-end advisory support for the entire process.

Our services include: initial tax analysis to assess your position in both jurisdictions, exit tax planning and timing optimisation, visa category selection and application support, company formation and structure planning, bank account opening assistance, and ongoing tax compliance in Costa Rica. We work with a network of local lawyers, accountants, and immigration specialists to ensure that every aspect of your relocation is handled by the right expert.

Every client's situation is different. The right approach for a German entrepreneur with a GmbH and significant unrealised gains is very different from the right approach for a British retiree with a pension and a rental property portfolio. We take the time to understand your specific circumstances before making any recommendations.

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