Costa Rica, a small country nestled in Central America, boasts a unique blend of natural beauty, modern convenience, and a highly appealing investor visa program for those seeking a flexible “Plan B” residency.
And priced from just $150,000, the program could make sense for a wide range of people.
Let’s get into the details below…
Costa Rica: The paradise location where buying a $150K property earns you a flexible residency…
If you hop on a plane, a quick 4-hour flight from the southern United States takes you to Costa Rica – and right into the heart of “Pura Vida” – or the “Pure Life,” for which this paradise location is renowned.
The country strikes a wholesome balance across a range of considerations that expat retirees and digital nomads care about. And as an added benefit, the country boasts an exceptionally low cost of living.
We like Costa Rica for all the above-mentioned reasons, and members of team Sovereign Man have spent a lot of time there over the years.
That’s why we dedicated a whole Total Access Quarterly Report covering Costa Rica as a Plan B destination in 2022. And in May of 2023, we also organized a boots-on-the-ground TA trip to explore it first-hand.
TA members who joined us in Costa Rica had the opportunity to meet some of our local network there in person, and also attended an insightful presentation by leading local service providers.
And as a matter of fact, tomorrow, July 27th, our trusted Costa Rican legal partners will be joining us on a TA Monthly Supplier Call to answer members’ questions about topics like Costa Rican residency, citizenship, property investment, taxation and much more…
But without further ado, let’s unpack the country’s investor visa program…
|COSTA RICA INVESTOR VISA (Inversionista)||Key Program Considerations|
|Financial requirement||$150,000 (recently lowered from $200,000) invested in real estate, vehicles, operating businesses, stocks, bonds, etc.|
|Physical presence requirement||Generally, you must come to Costa Rica for at least one day per year (but exceptions are possible).|
|Family Eligibility||Your spouse and children under 18 are eligible.|
(Kids up to 25 are eligible if they are enrolled in university.)
|Can you work or run a business there?||You cannot work as an employee.|
You can, however, receive income from the project you are investing in (if applicable) or start your own company.
|Residency Validity||The initial residency is valid for two years.|
After three years of total residency, you can apply for Permanent Residency.
The Costa Rican Investor Visa at a glance…
While Costa Rica’s “inversionista” residency may not be as popular as the country’s pensionado or rentista options, it could make a lot of sense – provided that you’re comfortable investing $150,000 or more of your own (not borrowed) money in Costa Rican property…
Having a second home here could make for an excellent lifestyle and diversification play:
After all, you will always have a place to call home if you purchase a residential property there. And by purchasing Costa Rican property, you are diversifying the location of your assets.
(Plus, with Costa Rican residency, you also achieve political diversification for yourself.)
However, you don’t have to invest in residential property. You could also invest in land, operating businesses, vehicles, stocks, bonds and more.
And the good news is that a recently enacted law reduced the minimum investment amount from $200,000 to $150,000.
Importantly — according to our provider, the required $150,000 threshold applies to the declared value of the property at a local city hall. (Your annual property tax will depend on it, too.)
The actual purchase price is irrelevant.
Also, the declared value can often be higher than the purchase price, and can depend on many factors. Your Costa Rican attorney will be able to advise you on this issue.
(Sovereign Confidential members, let us know if you need a reference for trusted suppliers on the ground.)
Speaking of property taxes – these are not high in Costa Rica at all.
For example, a declared value of $200,000 will imply an annual property tax of around $500 per year — that’s just 0.25% per year.
In addition, you are allowed to combine investments to reach the required threshold. For example, if you purchase a property with a declared value of $120,000 and buy a personal vehicle worth $30,000, this should qualify you for an investor visa, too.
Additionally, there is a one-time tax exemption for importing your standard household goods and two personal vehicles.
This is big, as cars and furniture tend to be expensive in Costa Rica due to high import taxes.
With the import duty waived, bringing your vehicle(s) from the US or Canada should be much cheaper than buying them locally.
Plus, the same legal bill that reduced the investment threshold to $150,000 also made provision for a 20% transfer tax reduction when purchasing local real estate.
But this law is not designed to last forever: It will only have a five year validity.
And if, during this time, you decide to sell your property, cars or even lose your resident status, Costa Rica will want you to pay back the taxes from which you have been exempted.
If asset and political diversification plus healthy, laid-back living in a paradise location sounds like your thing, then Costa Rica might be just the place for you.
And if you’re not necessarily looking to invest there, the country’s offers at least three other residency programs that could be well worth considering.
Yours in freedom,
Team Sovereign Man