Costa Rica
Pura Vida & Territorial Tax

Costa Rica sits at the narrow neck of Central America, bordering Nicaragua to the north and Panama to the south, with the Pacific Ocean to the west and the Caribbean Sea to the east. It is a country the size of West Virginia with a population of 5.2 million — and a wildly disproportionate share of the world’s plant and animal species, owing to a geography that runs from sea-level tropical coast to cloud forest to volcanic highland within a few hours’ drive.

The tax system is purely territorial: only income derived from Costa Rican sources is subject to Costa Rican income tax. Income earned from foreign sources — dividends from shares held abroad, rental income from foreign property, capital gains on foreign investments, foreign business profits, foreign pensions — is completely exempt from Costa Rican tax, without any time limit or special application required. This is not a temporary concession or a special regime: it is the basic architecture of the tax system, applied equally to residents and citizens alike.

What distinguishes Costa Rica from other territorial-system destinations is the surrounding package. The country abolished its military in 1948 — the longest-running such arrangement in the Americas — and redirected that spending into education and healthcare. The result is a public system that, while imperfect, functions considerably better than its regional neighbours, and a private healthcare sector in San José that delivers international-standard treatment at a fraction of European or North American prices. The country has the highest life expectancy in the Western Hemisphere outside Canada and the United States, and consistently ranks in global wellbeing surveys alongside much wealthier nations.

Costa Rica uses the US Dollar extensively in parallel with the Costa Rican Colón (CRC), and most major transactions — property, private school fees, medical services — are quoted in USD. The country has four active double tax agreements: with Germany, Spain, Mexico, and the UAE. There is no DTA with the UK, USA, Canada, or Australia, which has specific planning implications for nationals of those countries with ongoing home-country income (see Section IX).

The name means Rich Coast. The Spanish named it that in 1502, expecting to find gold. They didn’t find much gold — but five centuries later, the name has acquired a different kind of truth. Costa Rica is extraordinarily rich in what gold cannot buy: biological diversity, clean air, clean water, political stability, and a culture organised around the phrase pura vida — pure life — which Ticos use for hello, goodbye, thank you, you’re welcome, and everything is fine. It is a national philosophy as much as a greeting.

The country divides into four main zones. The Central Valley (Valle Central), at 1,200 metres altitude, contains the capital San José, the city of Alajuela, and the towns of Heredia and Cartago. This is where most of the country’s infrastructure, international schools, private hospitals, and business activity are concentrated. The altitude keeps temperatures at a near-permanent 22–26°C year-round — no air conditioning needed, no heating needed. It is as close to a perfect climate as any metropolis offers.

The Pacific Coast runs from the dry forests and beaches of Guanacaste in the north — where most resort development is concentrated, including the international airport at Liberia — to the rainier Nicoya Peninsula in the middle and the wild Osa Peninsula in the south. The Pacific Nicoya Peninsula, including the towns of Tamarindo, Nosara, Santa Teresa, and Sámara, has become the primary location for international expats seeking beach living with community infrastructure. The Caribbean Coast is less developed, more Afro-Caribbean in character, and receives significantly more rainfall — lush, green, and genuinely off the beaten track.

The volcanic highlands form the spine of the country. Arenal, one of the world’s most perfectly conical active volcanoes, sits above the tourist town of La Fortuna. Poás, Irazú, and Rincón de la Vieja are all accessible day trips. Cloud forests cover the mountain ridges — Monteverde is the most famous, accessible by a road that is famously terrible and famously worth it. The wildlife ranges from scarlet macaws and resplendent quetzals to jaguars, tapirs, sloths, and more species of butterfly than all of Europe combined.

“As the eco- and adventure-tourism capital of Central America, Costa Rica has a worthy place in the cubicle daydreams of travellers around the world.”

— Lonely Planet, Costa Rica

“Costa Rica seduced the young solo traveller me in the mid-1990s with visions of tropical beaches, smoking volcanoes, abundant wildlife and friendly locals.”

— Wendy Yanagihara, Lonely Planet writer

“Mine is an unarmed people, whose children have never seen a fighter or a tank or a warship.”

— Óscar Arias, President of Costa Rica, Nobel Peace Prize laureate, 1987

Costa Rica operates one of the most genuine territorial tax systems in Latin America: only income earned within Costa Rican borders is subject to Costa Rican tax. Foreign-source income — wages from foreign employers, dividends from foreign companies, interest from foreign bank accounts, capital gains on foreign assets, foreign rental income — is entirely exempt for residents, regardless of how long they have lived in Costa Rica. There are no inheritance, estate, gift, or wealth taxes. Property tax is just 0.25% of registered value annually. The Digital Nomad Visa (Law No. 10008) goes one step further: foreign earnings are explicitly exempt from Costa Rican tax even if the holder stays more than 183 days, removing the standard tax-residency trap that affects most other digital nomad programmes.

• ›0% on foreign-source income — wages, dividends, interest, capital gains, rental income from outside Costa Rica are not taxed at any time, regardless of residency duration.
• ›0% inheritance, estate, gift, and wealth tax — Costa Rica imposes none of these on residents or non-residents.
• ›Digital Nomad Visa with statutory tax exemption — under Law No. 10008, holders earning at least $3,000/month (individual) or $4,000/month (family) from foreign sources are explicitly exempt from Costa Rican income tax on those foreign earnings even if they stay more than 183 days. This solves the residency-trigger problem that affects most digital nomad jurisdictions.
• ›Modest local taxation — for income that is Costa Rican-sourced, employment income is taxed at 0%–25% progressively. Self-employed individuals from 1 January 2026 benefit from a new 25% flat deduction without receipts requirement, materially simplifying compliance for freelancers and consultants.
• ›Capital gains at 15% — gains on Costa Rican real estate or local financial assets are taxed at a flat 15%; assets acquired before 1 July 2019 may opt for a one-time 2.25% rate on first sale.
• ›13% VAT (IVA), 0.25% property tax — standard VAT is 13%, with reduced rates on certain essentials. Annual property tax is 0.25% of registered value, among the lowest in Latin America.
• ›Pensionado, Rentista, Investor, and Digital Nomad routes — multiple residency pathways: $1,000/month lifetime pension (Pensionado), $2,500/month stable income or $60K deposit (Rentista), $150,000+ investment (Investor), or $3,000/month foreign income (Digital Nomad). Permanent residency available after 3 years; citizenship after 7 years (dual citizenship allowed).
• ›Stable democracy, no military, "Pura Vida" lifestyle — Costa Rica abolished its army in 1948 and has been continuously democratic since. The country combines low taxation with developed-world legal frameworks, modern banking, and one of the highest standards of living in Latin America.

Costa Rican tax residency for individuals follows the standard 183-day rule: spending 183 days or more in Costa Rica within a calendar year establishes tax residency. There is no complex centre-of-life test or multi-factor analysis — it is a day count.

Once tax resident, you are subject to Costa Rican income tax on Costa Rican-source income only. Foreign-source income remains entirely exempt under the territorial system regardless of residency status.

Residency status vs. immigration status — these are two separate concepts in Costa Rica. You can be a Costa Rican tax resident (183+ days) without holding legal immigration residency, and you can hold immigration residency without meeting the 183-day threshold in a given year. Most long-stay expats hold both.

The main immigration residency categories relevant to internationally mobile individuals are covered in Section XII. Each of these residency statuses, once obtained, allows you to live in Costa Rica long-term, and after 183 days you are tax-resident. Residency does not change the territorial nature of the tax system — foreign income remains exempt whether you are a visitor, a tax resident, or a permanent resident.

Costa Rica has a small but growing DTA network. Active treaties as of 2026:

• ›Germany — in force; reduces withholding on German-source dividends, interest, and royalties for Costa Rica residents
• ›Spain — in force
• ›Mexico — in force
• ›UAE — in force

No DTA with the United Kingdom, United States, Canada, or Australia. For nationals of these countries, the absence of a treaty means Costa Rica cannot provide treaty-based protection on home-country source income. Home-country domestic rules apply in full to income earned from those countries.

For British nationals: the UK Statutory Residence Test governs whether HMRC considers you non-resident. Once you are genuinely UK non-resident, the absence of a DTA with Costa Rica means UK income may face withholding at domestic rates rather than reduced treaty rates — but your Costa Rica tax position on that UK income remains exempt under the territorial system.

For US nationals: the US taxes citizens on worldwide income regardless of where they live. The absence of a US-Costa Rica DTA does not change this. See Section XIX.

Despite the limited treaty network, Costa Rica’s territorial system means that for most foreign-source income — which is simply not taxed in Costa Rica — the absence of treaties has limited practical impact on day-to-day tax planning.

Moving to Costa Rica does not automatically end your home-country tax obligations. Tax authorities in the UK, Australia, Canada, and elsewhere will apply their own domestic rules to determine whether you have genuinely ceased to be tax resident — and those rules look at facts, not paperwork.

• ›What genuinely establishes Costa Rica as your home: A rented or owned property in Costa Rica that is your principal residence. Physical presence in Costa Rica for the majority of the year. Family relocated with you. Professional and social connections centred in Costa Rica. A demonstrable lifestyle built around Costa Rica rather than periodic visits from your real home elsewhere.
• ›The most common failure mode for Costa Rica relocations is the Guanacaste beach house used as a tax address while the individual’s actual life — family, clients, property, banking, social connections — remains elsewhere. Costa Rica does not require minimum stay to maintain immigration residency in most categories, which can tempt people into nominal residency arrangements. Home-country tax authorities are not fooled by these. The standard is: where do you actually live?
• ›Home-country property. Retaining a property available for your own use in your home country is the single strongest indicator that your tax residency has not genuinely moved. For UK nationals, it is a statutory “tie” under the SRT. For Australians, it is primary evidence of domicile. Sell it, or lease it commercially to an unrelated third party before you leave.

Before you relocate to Costa Rica, you need to understand what tax consequences arise in your current country of residence at the point of departure. These rules vary significantly by country and must be assessed individually. Many countries impose an exit tax, deemed disposal charge, temporary non-residence rule, or continuing reporting obligation when a tax resident leaves.

• ›United Kingdom. The Statutory Residence Test determines when you cease to be UK tax resident. Get the date right — UK CGT applies to gains realised while resident. The temporary non-residence rules can claw back gains on assets sold while you are in Costa Rica if you return to the UK within five years. The number of days spent in the UK in the year of departure and the number of UK ties you retain both affect the SRT outcome.
• ›Australia. CGT Event I1 deems most assets disposed of at market value on the day you cease to be an Australian tax resident. The ATO uses a domicile test and 183-day test to determine cessation of residency — neither of which is simply a matter of applying for Costa Rican residency. Australian superannuation remains subject to Australian rules regardless of your residency.
• ›Canada. Canadian departure tax applies to most property at the point of emigration — a deemed disposition at market value triggers capital gains on unrealised appreciation. Registered accounts (RRSP, TFSA) are not subject to deemed disposition but face withholding tax on withdrawals made as a non-resident. No Canada-Costa Rica DTA to reduce this withholding.
• ›United States. US citizens and long-term green card holders remain subject to US worldwide taxation. Moving to Costa Rica does not reduce US tax obligations. See Section XIX.
• ›Scandinavia. Nordic countries generally have strong exit rules. Sweden applies a ten-year look-back on capital gains from Swedish securities for emigrants. Denmark has specific pension and share scheme rules triggered by departure. Norway’s exit tax applies to gains on shares above a threshold. Take advice from a Nordic tax adviser before leaving.

Costa Rica offers two primary company structures for foreign entrepreneurs:

• ›Sociedad Anónima (S.A.): The standard corporate vehicle, equivalent to a limited company. Setup cost: approximately $1,500–3,000 including legal fees and registration. Annual maintenance: $500–1,000. No minimum capital. 100% foreign ownership permitted.
• ›Sociedad de Responsabilidad Limitada (SRL/Ltda.): A simpler structure with fewer formalities than the S.A. Popular for smaller businesses and property holding.
• ›Corporate income tax rates: - Income below CRC 5.8M/year (~$10,500): 5% - CRC 5.8M–8.7M/year: 10% - Up to CRC 15.6M/year: 10%–20% (graduated) - Above CRC 15.6M/year (~$28,000): 30%
• ›Free Trade Zones (Zonas Francas): Export-oriented businesses operating in a designated zone can benefit from income tax exemptions for up to 12 years, plus exemptions from import duties and VAT.

Is a local company always the right answer?

Not necessarily. For many internationally mobile entrepreneurs residing in Costa Rica, it is more tax-efficient to operate through a company incorporated in a low-tax or zero-tax jurisdiction outside Costa Rica — and simply draw tax-free or low-taxed income from that entity while benefiting from Costa Rica's territorial system on the personal level.

Because Costa Rica taxes only locally-sourced income for residents, income flowing from a well-structured foreign company to a Costa Rica-resident individual as salary, dividends, or management fees is generally exempt from Costa Rican personal tax — provided the income genuinely originates outside Costa Rica.

Popular structures for internationally mobile entrepreneurs include:

• ›US LLC (single-member, disregarded entity): No US corporate tax if the owner is a non-US person and the LLC has no US-effectively-connected income. Income flows through to the individual. Widely used by non-US residents for international consulting, digital services, and investment businesses. The combination of a US LLC and Costa Rica residency is straightforward and well-understood by local accountants.
• ›Singapore company: 17% headline corporate rate with extensive exemptions for new companies and SMEs. Strong banking access, international credibility, and a clean regulatory environment. Suited to clients with Asian business ties or who need a jurisdiction with broad global acceptance.
• ›UAE company (mainland or free zone): 0% corporate tax on qualifying income below AED 375,000 in profit, or 9% above — still competitive. 0% on qualifying Free Zone income with substance. No personal income tax on distributions. Increasingly used by Latin America-based clients as a holding and operational structure.

We help clients design the right international structure for their specific situation. Learn more about our company setup services →

Costa Rica offers several pathways to legal residency for internationally mobile individuals:

• ›Pensionado (Retirement) Residency: Minimum $1,000/month in pension income from a foreign source — state pension, private pension, annuity. One of the most straightforward options for retirees. No age requirement. Residency is renewable every two years and can be converted to permanent residency after three years.
• ›Rentista Residency: Minimum $2,500/month in demonstrated passive income from a foreign source for at least two years, or a $60,000 deposit in a Costa Rican bank held for a minimum period. More demanding than Pensionado but open to those with investment rather than pension income.
• ›Inversionista (Investor) Residency: Minimum investment of $150,000 in a qualifying Costa Rican business or real estate development. This is the fastest pathway to residency and does not require ongoing income.
• ›Digital Nomad Visa: Introduced in 2021. Minimum income requirement: $3,000/month ($4,000 for families). Valid for one year, renewable for one additional year. Does not lead to permanent residency but provides a legal basis for stays longer than the standard 90-day tourist entry.
• ›Permanent Residency: Available after three years in a qualifying temporary residency category. After completing permanent residency requirements, Costa Rican citizenship is available after seven years of legal residency in total.

Processing times for temporary residency typically run 12–18 months. Most applicants use a Costa Rican immigration lawyer — fees are $1,500–3,000 in addition to government fees.

Costa Rican citizenship by naturalisation requires seven years of legal residency (reduced to five years for nationals of other Spanish-speaking Latin American countries and Spain). Requirements include: passing a Spanish language exam, passing a Costa Rican history and civics exam, demonstrating good conduct (criminal record check), and demonstrating integration into Costa Rican society.

Costa Rica permits dual citizenship — you do not need to renounce your existing citizenship to naturalise as Costa Rican.

The Costa Rican passport provides visa-free or visa-on-arrival access to approximately 150 countries, including the Schengen Area and the United Kingdom.

Costa Rica has a functioning banking sector divided between state banks — Banco Nacional, Banco de Costa Rica, and Banco Popular — and private institutions including BAC Credomatic, Scotiabank Costa Rica, and Davivienda. Local accounts are useful for day-to-day expenses: paying rent, utilities, domestic bills, and local services. Private banks are more accessible to foreign residents than state banks and generally offer better digital infrastructure.

Opening a local account requires legal residency status (or a pending application), passport, proof of Costa Rican address, and source-of-funds documentation. Processing takes a few days once documentation is complete.

Where to hold your main accounts

For internationally mobile individuals and entrepreneurs, it is generally advisable to maintain your primary banking relationships outside Costa Rica, in a jurisdiction with strong banking infrastructure, broad international acceptance, and a full range of investment and private banking services. Costa Rican banks operate primarily in Costa Rican Colónes and US Dollars, and while SWIFT transfers are available, their international banking infrastructure is not comparable to the major financial centres.

Jurisdictions we frequently recommend for primary international banking include:

• ›Switzerland — private banking tradition, multi-currency accounts, strong asset protection, and a level of banking discretion that operates within the full limits of international law. Swiss private banks have long experience with internationally mobile clients.
• ›Singapore — Asia-Pacific hub, excellent international wire infrastructure, strong regulatory framework, and broad acceptance by global counterparties. Particularly useful for clients with business or investment interests in Asia.
• ›United States — US dollar accounts at major US banks are universally accepted. Useful for USD-denominated businesses, investments, and for North American clients maintaining US financial ties.
• ›Georgia (Caucasus) — straightforward account opening for non-residents, low fees, and a surprisingly robust banking system for a jurisdiction of its size. Particularly useful as a secondary account for transaction flexibility.

We help clients identify the right banking structure for their specific situation. Learn more about our offshore banking services →

Beyond the territorial tax system, Costa Rica offers a combination of qualities that makes it the most serious option for internationally mobile relocation in Central America:

• ›Political stability. Costa Rica has been a functioning democracy for over 75 years without military interruption. It abolished its army in 1948 — the same year Switzerland was doing the opposite. The rule of law functions, corruption is lower than any of its neighbours, and property rights are genuinely protected.
• ›Healthcare. The public CAJA system is available to legal residents and is free at point of use — not always fast, but functional. The private healthcare sector in San José is excellent and affordable: a GP consultation costs $50–80; specialist consultations $80–150; surgical procedures a fraction of comparable costs in the UK or US.
• ›Biodiversity and outdoor life. Costa Rica contains 5% of all species on earth. 28% of its territory is protected national park or reserve. The outdoor options — surfing, hiking, wildlife watching, diving, whitewater — are extraordinary and accessible from within the country.
• ›Expat community depth. There are approximately 100,000 American citizens resident in Costa Rica — the largest US expat community in Central America — plus significant British, Canadian, and European populations. Infrastructure catering to expats (English-language schools, international hospitals, English-speaking professionals) is genuinely established, not emerging.
• ›Proximity to the US. Direct flights from San José to Miami: 2.5 hours. New York: 5.5 hours. Los Angeles: 6 hours. For North American clients maintaining business ties, this proximity matters.

Costa Rica is not the bargain it once was. Good housing, private schooling, cars and imported goods are expensive, especially in Escazú, Santa Ana, Nosara, Tamarindo and other foreigner-heavy areas.

Typical monthly costs for an internationally mobile professional or family in Costa Rica (2026 planning ranges):

• ›Comfortable single professional (no children): CRC 1,560,000–2,860,000/month (£2,350–4,300 / $3,000–5,500)
• ›Family of four with private schooling: CRC 3,640,000–6,760,000/month (£5,450–10,150 / $7,000–13,000)

These figures are planning ranges, not promises. The actual budget in Costa Rica depends heavily on housing quality, neighbourhood, school choice, healthcare needs, car ownership, travel frequency, and whether you are trying to live like a local or maintain a Western expatriate standard.

Foreign nationals have the same property ownership rights as Costa Rican citizens — 100% direct ownership of titled property is permitted, with no restrictions on foreigners holding title. This is relatively unusual in Latin America and is a significant advantage.

Types of property title:

• ›Escritura Pública (fee simple): Full registered title, recorded in the National Registry. The gold standard — this is what you want.
• ›Concession land: Property within 50 metres of the ocean high-tide line is technically state-owned maritime zone land; foreigners cannot own concession land directly and must use a Costa Rican corporate structure. Property between 50 and 200 metres from the high-tide line requires a concession from the relevant municipality — foreigners can hold concessions but with restrictions.

Price ranges (2026):

Transaction costs:

• ›Transfer tax: 1.5% of registered value
• ›Stamp duties and legal fees: approximately 1.5–2%
• ›Real estate agent commission: 5–6% (paid by seller typically, but negotiable)
• ›Total buyer costs: approximately 3–4% of purchase price

Due diligence: Engage a Costa Rican property lawyer (not the seller’s lawyer) and conduct a title search through the National Registry. Check for liens, mortgages, and squatter occupations. Verify municipal permits and construction legality. Do not rely on verbal representations.

Costa Rica ranks consistently in global surveys as one of the world's top retirement destinations, and the reason is not hard to find: retirees who arrive for a holiday frequently do not leave. The Nicoya Peninsula is one of only five designated Blue Zones in the world — locations where populations live measurably longer than average — with residents attributing it to diet, physical activity, community bonds, and a lower-stress relationship with time.

• ›The Pensionado residency (see Section XII) is designed for retirees: $1,000/month in pension income, and you qualify for legal residency, access to the CAJA public health system, and a range of Pensionado discounts (25% off domestic flights, cinema tickets, hotel stays, and more).
• ›Healthcare in retirement: The CAJA is open to legal residents including Pensionados for a monthly contribution based on income — typically $50–150/month for a retiree, covering access to hospitals and clinics. Many retirees supplement this with private health insurance ($1,200–3,000/year) for faster access and private hospitals.

Foreign pension tax treatment:

• ›Costa Rica: Foreign pension income is exempt from Costa Rican tax under the territorial system — regardless of source or amount.
• ›UK: Under the UK-Costa Rica tax position (no DTA), UK pension income paid to a Costa Rica-resident non-resident is subject to UK income tax at source (PAYE), with no treaty to reduce this. Take specific advice from a UK adviser.
• ›Canada: CPP/OAS and RRSP/RRIF withdrawals face Canadian non-resident withholding tax at 25% (no Canada-Costa Rica DTA to reduce this).
• ›Australia: Superannuation in pension phase has its own rules independent of where you live — take ATO-specific advice.
• ›US: See Section XIX.

US citizens and long-term green card holders are taxed by the United States on their worldwide income, regardless of where they live. Relocating to Costa Rica does not end US tax obligations — it changes the picture, but does not eliminate it.

Key considerations for US citizens in Costa Rica:

• ›Foreign Earned Income Exclusion (FEIE): US citizens who qualify as bona fide residents of Costa Rica or pass the physical presence test can exclude a significant amount of foreign earned income from US federal income tax. This applies to wages and self-employment income — not passive income such as dividends, interest, capital gains, pensions, or rental income.
• ›Foreign Tax Credit: Income tax paid in Costa Rica can generally be credited against US tax on the same income, reducing or eliminating double taxation. The credit is particularly important for income not covered by the FEIE and for taxpayers whose income exceeds the annual FEIE threshold.
• ›Treaty position: Treaty relief between the United States and Costa Rica is limited or fact-dependent. Before relying on any treaty position, US citizens should confirm the current treaty status and the exact income category with a qualified US international tax adviser. A treaty does not automatically remove US filing obligations, and most treaties contain savings-clause rules that preserve US taxation of citizens.
• ›FBAR: US persons with bank accounts in Costa Rica exceeding $10,000 in aggregate must file FinCEN Form 114 (FBAR) annually. Failure to file can carry severe penalties, even when no tax is due.
• ›FATCA: US citizens may also need to report foreign financial assets on Form 8938. Banks in Costa Rica may separately identify US account holders under FATCA procedures and report account information through the relevant channels.
• ›Social Security and self-employment tax: The FEIE reduces income tax but does not automatically eliminate US self-employment tax. Whether US Social Security tax applies depends on employment status, entity structure, and any applicable totalization agreement.

US citizens considering Costa Rica should work with a qualified US international tax adviser alongside local counsel. The interaction between US tax law and Costa Rica tax law is manageable, but it requires careful planning before the move, not after the first filing deadline arrives.

• ›When should I start planning? At least six months before departure. Twelve months is better if you have significant assets, a business to restructure, or property to deal with. The most expensive mistake in relocation is arriving and then discovering the tax issues you should have resolved before leaving.
• ›Must I apply for residency before I can use the territorial tax system? No. The territorial system applies to any person physically present and tax-resident in Costa Rica (183+ days), regardless of immigration status. However, legal residency is required to open bank accounts easily, access the CAJA health system, and establish a credible paper trail of your Costa Rica life. Apply for the appropriate residency category before or shortly after arrival.
• ›What does the minimum viable Costa Rica setup look like? A long-term rental in your name, demonstrable physical presence (180+ days), and a local bank account. These three things, combined with genuine exit from your home-country tax system, establish Costa Rica as your tax base.

What residency category should I apply for?

• ›Pension income over $1,000/month: Pensionado
• ›Passive income over $2,500/month: Rentista
• ›Want to invest $150,000+ in property or business: Inversionista
• ›Remote worker: Digital Nomad Visa (one year, renewable once)
• ›Building toward citizenship: choose a category that leads to permanent residency

Must I learn Spanish? English is widely spoken in the expat communities of the Central Valley, Guanacaste, and Nicoya. Government processes, banking, and official dealings are conducted in Spanish. Learning conversational Spanish improves daily life significantly and is required for the citizenship naturalisation exam.

What is the recommended order of steps?

1. 1.Take home-country departure tax advice
2. 2.Research residency category and begin document preparation
3. 3.Visit Costa Rica for an extended stay (3+ months) to verify the lifestyle is genuinely right
4. 4.Secure rental accommodation
5. 5.Engage a Costa Rican immigration lawyer
6. 6.Submit residency application
7. 7.Open Costa Rican bank account
8. 8.Formally notify home-country tax authority of departure
9. 9.Establish 183-day presence in first full tax year of claimed Costa Rica residency

Costa Rica participates in the OECD Common Reporting Standard (CRS), the global framework for automatic exchange of financial account information between tax authorities. Costa Rica has been exchanging information with partner jurisdictions since 2018.

In practical terms, this means: if you hold bank accounts or financial assets in Costa Rica, the financial institution in Costa Rica will report your account details — balance, income, and identifying information — to the local tax authority, which will then automatically share this information with the tax authority of your country of tax residence.

The key point is that CRS follows tax residence, not nationality or citizenship. For example, a Swedish citizen who has genuinely become tax resident in Costa Rica is treated, for CRS purposes, as a tax resident of Costa Rica — not as a Swedish reportable person merely because of the passport. The same principle applies to any non-US nationality: the account should be reported to the country of tax residence, not automatically to the country of citizenship.

CRS does not create a tax liability — it creates transparency. If you are properly tax resident in Costa Rica and have correctly severed residency in your home country, CRS reporting simply confirms what should already be declared. The risk arises when individuals attempt to maintain dual residency, leave old tax-residence indicators unresolved, or claim Costa Rica residency without genuinely living there.

US citizens are different. The United States does not participate in CRS in the same way. Americans are affected by FATCA instead: banks outside the United States generally identify US persons and report their account information through FATCA channels to the US authorities, regardless of whether the person is tax resident in Costa Rica or anywhere else.

Upon establishing residence in Costa Rica, you will need to obtain a DIMEX and local tax registration where required from the competent local authority. This is required for most financial and legal transactions in Costa Rica, including opening bank accounts, signing contracts, registering with tax authorities, and dealing with public offices.

You will also need to obtain or complete the relevant DIMEX (Documento de Identidad Migratoria para Extranjeros) process once your residence status has been approved. This document or registration record becomes your practical proof of residence in Costa Rica and is usually required for banking, telecom contracts, utilities, leases, property transactions, and day-to-day administrative matters.

• ›Driving licences from most countries are accepted only for a limited period after arrival. Once you become resident in Costa Rica, you should verify whether your licence can be exchanged directly or whether a local medical certificate, translation, theory test, or practical test is required.
• ›Health insurance should be arranged before arrival unless you are immediately covered by a local public system. In many cases, private international cover is the safest bridge solution while residence, employment, or social-security registration is still being completed.
• ›Importing personal effects should be planned before shipping anything to Costa Rica. Household goods may qualify for relief when imported shortly after taking up residence, but customs paperwork, inventory lists, timing rules, and vehicle-import duties can make late or informal shipping expensive.
• ›Proof of address and banking are often linked. Banks, telecom providers, and government offices may require a lease, utility bill, local address certificate, or residence registration before they will open an account or complete onboarding.
• ›Ongoing local compliance should not be treated as an afterthought. Calendar reminders for residence renewals, tax registrations, local filings, health-insurance renewals, and address updates help prevent administrative problems that can later undermine the tax-residency position.

We offer comprehensive tax and legal support for your relocation to Costa Rica. We follow a proven process — and where Costa Rica requires specialist local input, we involve appropriately qualified local tax, legal, immigration, and banking advisers on the ground, while remaining responsible for overall coordination.

The results speak for themselves: we have helped over 100 entrepreneurs and business owners significantly reduce their tax burden through carefully planned relocations. Careful planning, thorough advice, and comprehensive support are our standard. Legally sound structuring within the framework of international tax law is our highest priority.

Our services typically include one or more of the following:

Our fees are generally billed on a time basis; fixed prices apply for certain services such as company formation.

As a first step, we recommend booking a consultation to discuss your plans — by phone, Zoom, or Signal. Together we find the best approach and establish contact with our local partner. As project coordinator, we keep all the threads in hand that are necessary for the successful implementation of your plans.