Starting today, Costa Rica allows non-resident investors to participate in the acquisition of its public debt bonds, as a measure to control the country’s fiscal deficit.
The law approved last December and signed by the president, Rodrigo Chaves, seeks to establish clearer rules for investors and improve the placement of internal public debt securities issued by the Ministry of Finance and the Central Bank.
As President Chaves explained, this law will allow more investment and better conditions for the government and the private sector, as it will drive a drop in interest rates paid in the public debt market.
“The law seeks agile mechanisms for investment and that this new window of opportunity for foreign investors increases their participation in the medium term and with this, interest rates in the local market decrease and investment terms are extended,” Chaves said.
The law is part of Costa Rica’s agreements with the International Monetary Fund to eliminate double taxation on foreign buyers of titles, who were charged 15% for sending remittances and 15% for income in Costa Rica.
The fiscal deficit in Costa Rica closed at 5.13% of the gross domestic product (GDP) for 2021, while the figure for the month of October 2022 was 1.9% of GDP, according to the latest available data.
With information from Xinhua