(QCOSTARICA) Three legislators propose creating incentives to attract investors, pensioners and rentiers (rentistas) to the country.
The legislators presented the bill last Thursday, August 20, in order to contribute to the economic recovery of the country due to the COVID-19 pandemic.
The initiative was signed by María Inés Solís, of the Partido Unidad Social Cristiana (PUSC), Silvia Hernández, of the Partido Liberación Nacional (PLN), and Mileidy Alvarado, of the Partido Restauración Nacional (PRN).
According to the proposal, the people covered by this regime would enjoy the following incentives for a period of five years:
- A one-time-only duty-free and exemption of all other taxes on the importation of household items and tax exemption for the import of a vehicle for personal or family use. The vehicle may be sold or transferred to third parties exempted from said taxes after three years from the date the vehicle entered the country.
- Exoneration of 20% of the total transfer tax on real estate acquired within the term of the law, as long as the beneficiary is the registered owner of the property. If the beneficiary person transfers the assets within three years of their acquisition, they must pay the taxes from which they were exempted. If the beneficiary person renounces their status as a retired resident or as a rentier resident within the term of this law, she must pay the taxes from which she was exempted.
- For the category of investors, for the term established by law, a new investment range is established with a capital of not less than US$150,000, according to the official exchange rate determined by the Central Bank of Costa Rica (BCCR), whether in real estate, registrable assets, shares, securities and productive projects or projects of national interest. The current law requires a US$200,000 minimum investment.The initiative establishes that the Ministerio de Gobernación (Ministry of the Interior), through the Dirección General de Migración y Extranjería (DGME) – immigration service – will have a specialized service window for the migratory categories of investors, retired residents and rentier residents.
“I have been constant about the situation in which Costa Rica finds itself, plunged in an unprecedented economic crisis, a condition that, according to economic projections, threatens to worsen even more, so that legislators are forced to establish strategies that not only depend on our domestic market as an alternative to boost, but we must create policies to attract investment, which will create more jobs and reactivate the economy,” said Solís.
The legislator explained that the proposal is promoted between different aspects, taking into account that, according to the Prosperity Index 2019, prepared by the Legatum Institute 3, Costa Rica is the second-best country in Latin America to live, surpassed only by Chile.
Areas such as personal freedom, environmental policies, and governance are highlighted as its most prevalent axes, which make Costa Rica an extremely attractive destination for investors.
If approved, this law will apply to all those persons who are authorized to enter our country under the immigration categories of investors, retired residents or rentier residents.
Rafael Valverde, at Outlier Legal, is of the opinion that “While it is a good start to create some incentives for expats to relocate to Costa Rica, a lot more should be done.”
Valverde says that the government can create other incentives and/or adjustments to make it more attractive for foreign nationals to relocate to Costa Rica. Some of them are:
- Simplify the residency process for people applying as self-employed or with a small business.
- Grant estancias (a lesser immigration category) for people who do not want residency or do not meet the investment amount but have property in Costa Rica.
- Make more flexible regulations for digital nomads.
- Make driver’s licenses more accessible to foreign nationals.
- Create a tax exemption to all startups. This option is the only one to require a law, the other options can be passed via executive order.