Living in Costa Rica: Requirements for digital nomads

In 2021, Costa Rica issued a law to attract international remote workers and service providers, better known as “digital nomads”, whose regulations were published in July 2022.

The initiative arose to encourage long-stay visits to Costa Rica and increase the investment of resources of foreign origin in the country through the creation of opportunities and immigration and tax benefits.

The law created a framework to allow the residency of foreign workers who can show stable employment with a foreign employer.

However, these foreigners are not only eligible for residency but also bring in dependents if the applicant’s wages meet a sufficient threshold.

Among other benefits, individuals may 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 must show that they were in the country for at least six months during the term of their first visa.

TAX TREATMENT FOR DIGITAL NOMADS

The law also guarantees tax matters, meaning that individuals will not pay taxes on profits 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, former deputy of the Republic, who promoted the law in the Legislative Assembly 2018-2022.

Another benefit of the initiative is the possibility of opening savings accounts in the national banking system. Also, foreigners may use the driver’s license issued abroad as long as this document is still in force.

In addition, the legal regulation authorizes entry into the country without paying taxes for those basic elements of their work, for example, computers, cellular phones, cameras, and any other specialized equipment they may need.

REQUIREMENTS FOR THIS VISA

Applicants must demonstrate that they have a minimum income of US$3,000 per month or US$4,000 if they come with dependents.

These amounts are higher than what other countries ask.

“We decided on those amounts because it seemed to us that we should determine from now on the visitor that Costa Rica wants to promote, which is someone with a basic ability to leave money in our communities,” said Benavides, who spoke at a virtual lecture recently organized by Lead University.

The law considers the following dependents: spouse, unmarried children under 25 years of age who are economically dependent on the applicant, and children over 25 who have a physical or cognitive condition, which a medical opinion must prove.

Also, the applicant’s parents must prove such dependency.

Also, the applicant must prove that they have medical insurance for the entire visa term.

In case of an accident or illness while in the territory, it will not be paid by the State of Costa Rica.

PORTAL TO APPLY FOR THIS MIGRATORY CATEGORY

To apply, foreigners can find the necessary documents on the General Directorate of Migration and Aliens website and submit an online application or schedule an appointment at an immigration office in Costa Rica to submit the application in person.

The cost per application is US$100, plus US$90 for legal stay documents, and processing time can range from 15 to 30 days.

“Some migratory requirements that are established for other categories of temporary resident provisional visas are not in the one for digital nomads, that is, it is one of the conditions of stay with the least amount of requirements that exist in our law,” said Benavides.

It implies that the requirements for a digital nomad to stay in Costa Rica are precisely the same as those of a regular tourist, except for proof of income.

COSTS 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.

In some areas, the cost of living is cheaper than in 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 US$2,000 allows for a high standard of living, as average rents range from US$450 to US$850 per month for two- to three-bedroom homes.

Public buses are affordable in price and widely used by locals. A four-hour trip can cost US$6.

For food, a common way to save money is to go where the locals shop, such as farmers’ markets for fruits and vegetables.

With information from Bloomberg

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