Thursday, 3 December 2020

Costa Rica wants to attract foreign pensioners and rentiers

Proposed bill would reduce by $50,000 the investment that foreigners must demonstrate, in real estate, shares or productive projects, to obtain residency as investors, pensioners, or rentiers

QCOSTARICA – The minimum amount of capital investment that a foreign investor, rentier or pensioner must demonstrate to immigration authorities, as a requirement to opt for a temporary residence, could decrease by 25%.

The deputies of the Tax Affairs Committee endorse a project to encourage the arrival of foreign investors, pensioners and rentiers

Unanimously, 11 deputies of the Tax Affairs Committee of the Legislative Assembly, on Tuesday, November 17, endorsed the bill that would lower the minimum sum to invest in Costa Rica from US$200,000 to US$150,000.

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The idea of ​​the adjustment is to encourage the arrival of this type of foreigner to the country, as part of the plans to reactivate the economy.

This is established by the project called Ley de atracción de inversionistas, pensionados y rentistas (Law to attract investors, pensioners and rentiers), proposed by legislators Silvia Hernández of the PLN, María Inés Solís of the PUSC and Mileidy Alvarado of the PRN.

This project will help the economic reactivation of our country, since for more than four decades our country has granted certain benefits to attracting investors, rentiers and pensioners; Due to what our country is living under COVID and worldwide, this project was presented to be able to provide benefits, to be able to contribute, to attract new capital to the Costa Rican economy.Mileidy Alvarado

The text raises the contribution of this investment to the rank of law, which, for now, is stipulated in the regulations of the Ley de Migración y Extranjería (Immigration and Aliens Law), which sets the amount at US$200,000.

Article 3 of the initiative says that “to qualify for a temporary residence, the foreigner must contribute a minimum investment capital of US$150,000, which includes real estate or registrable, shares, securities and productive projects or projects of national interest.”

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More: Legislators present proposal to attract pensioners, investors and rentiers to Costa Rica

“This law is of public interest for the development of the attraction of investors, rentiers and pensioners to the national territory. For its fulfillment, the institutions of the Public Administration may include financial contributions to support the fulfillment of their purposes through the ordinary and extraordinary budgets of the Republic,” orders article 3 of the initiative.

The plan was approved by legislators of the Partido Liberacion Nacional (PLN) Gustavo Viales, Ana Lucía Delgado and Hernández; of the Partido Unidad Social Crisitaina (PUSC), Solís and Oscar Cascante; Laura Guido and Nielsen Pérez; from the Partido Accion Cuiadana (PAC); Carlos Avendaño and Mileidy Alvarado from the Partido Restauración Nacional (PRN); Otto Roberto Vargas, from the Partido Republicano Social Cristiano (PRSC); and Harllan Hoepelman of the bloque fabricista.

According to the proponents, this would be a true initiative for economic reactivation.

Solís said that, by reducing the amount of the investment requirement, the country begins to compete with countries like Panama where, she said, they have better plans.

Hernández recalled that President Carlos Alvarado, in his work report this year, promised to legislators to promote the arrival of retirees from other countries, to promote the economy through the arrival of foreign exchange or investments.

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“This is a clear post-pandemic exercise and an example of reactivating the economy. Let’s hope that the Government will convene the (legislative) initiative in the period of extraordinary sessions that begin on December 1,” commented Hernández.

Nielsen Pérez, for his part, clarified that the persons covered by this law must be “of good conduct.”

“That is a fundamental requirement. Welcome people with good backgrounds to invest and spends,” he added.

The Ley de Migración y Extranjería already allows the entry and temporary stay of investors, pensioners and rentiers, ranging between three months and two years, which is extendable.

For temporary residence procedures in the pensioner (pensionado) category, the legislation requires an accumulated lifetime pension (or retirement income) from abroad of at least $1,000 USD per month.

The minimum income is US$2,500 for a period of 24 months if the foreigner aspires for the special category of rentier (rentista).

The text would also regulate the following benefits:

  • One-time exemption from import customs taxes for household items. This would include home furnishings, appliances, decorative items, kitchen and bathroom utensils, bedding, among others.
  • If the exonerated assets are transferred, the exonerated tax must be paid; and, in case of loss, they can be replaced tax exempt.
  • Investors, pensioners or rentiers may import a vehicle for personal or family use, free of import taxes and tariffs, which could be sold or transferred to third parties also exonerated only if the law expires.
  • The exemption would be a one time, to import another vehicle, the beneficiary to receive the exemption, must first pay the taxes of the previous one. Another vehicle could be imported tax-free in case of loss due to theft, fire, or traffic accident.
  • The amounts declared as income under this rule, for example, the monthly pension received from abroad, is free of income tax. Only the profits obtained in Costa Rica, a product of their investments, would pay income tax. However, in the event that residency is canceled, the foreigner must pay all the taxes that the law exempted.
  • Whoever alters or falsifies documents in order to obtain benefits from this initiative, must pay the taxes that were exonerated, and sanctioned with a fine equivalent to 10% of the taxes that were exonerated.

 

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"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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