As a result of the governments commitment to broad social welfare Costa Rica boasts one of the highest standards of living in Latin America. The nation has an outstanding record for its respect for human rights and has maintained a strong democratic tradition from 1948 to the present day. Costa Rica is a member of the United Nations, the Organization of American States, the Inter-American Court of Human Rights, the United Nations University of Peace and many other international organizations related to human rights and democracy.
Costa Rica is a Democratic Republic, with a legal system based on the Spanish Civil Law system. The structure of the government is similar to the United States in that it is divided into three branches: the executive, the legislative, and the judicial. Current President, *scar Arias S*nchez (May 2006 - Present) is the first Nobel Laureate to be elected a nation's president after winning the award. He served as President from 1986 to 1990, and was elected for a second term in a close election in 2006.
Costa Rica's basically stable economy depends on tourism, agriculture, and electronics exports. Foreign investors remain attracted by the country's political stability and high education levels, and tourism continues to bring in foreign exchange. The current administration has made it a priority to pass the necessary reforms to implement the US-Central American Free Trade Agreement (CAFTA). CAFTA implementation would result in an improved investment climate (www.cia.gov).
Incentives / Advantages to Foreign Investors Include:
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Under the Costa Rican Tax System, Residents and Corporations are Taxed Only on Income Earned in Costa Rica
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Property Tax Cannot Exceed 1% of Registered Property Value
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Costa Rican Law Defines Gross Income as The Total Income and Profits Earned in The Country During the Taxable Year. Excluded from the Gross Income are the Following:
- Donations in Cash or Kind;
- Revaluation of Fied Assets;
- Profits, Dividends, Participation and Any Other form of Distribution of Benefits Credited to the Taxpayer;
- Income Derived as a Result of Contracts or Agreements Made on Goods or Capital Located Abroad, Even for Contracts Negotiated in Costa Rica;
- Capital Gains Obtained from the Transfer of Real or Personal Property so Long as this Income Does Not Constitute a Habitual Transaction;
- Inheritances, Legacies or Community Properties;
- Prizes from National Lotteries;
- Approved Charitable Donations
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There are Many Tax Credits Available for Spouses, Dependants, Fixed Salary & Profit Generation, Along with Deductions for a Variety of Costs Including Travel, Salaries, Insurance Premiums and Much More
Costa Rica Retirement Incentives Include:
There Are More Americans Living Per Capita in Costa Rica Than Any Other Country Outside the United States. With World Class Medical Facilities, A Strong Educational System, An Easy To Relocate Retirement System and Great Tax Incentives, It Is No Wonder Why More and More Americans Are Finding Their Retirement Haven in Costa Rica.
Here is a Brief List of The Requirements Necessary to Qualify for Pensioner Status:
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Anyone 45 years or older can apply for the easy-to-relocate retirement system set up by the Costa Rican government
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Qualified retired pensioners are eligible for benefits including specific tax exemptions and incentives
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Retirement income is tax exempt in Costa Rica
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The applicant should receive at least six hundred dollars (US$ 600) a month from a qualified retirement plan or a lifetime pension source outside Costa Rica
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Income certificate - The applicant should provide an original document from the company, government or institution guaranteeing that the monthly income will be sent to Costa Rica in the name of the applicant
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Foreigners could also demonstrate that they receive the minimum amount of US$ 600 from interests or dividends from investments on foreign currency deposited in a Costa Rican government bank
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A Police Certificate should be issued by the State in which the applicant has resided for the last six (6) months.
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The foreign currency received as a monthly pension should be converted into Costa Rican currency (colones). The Costa Rican Central Bank or any other government bank should certify this requirement
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The retirees (and their dependents) cannot work and/or earn a salary in Costa Rica. They can however, administer their own investments but without a salary
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A physical presence in Costa Rica for a minimum of 4 months each year is required
(For informational use only, the above is not to be construed as legal advice)
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