Living in Costa Rica

Depending on your country of origin, you can remain in Costa Rica with a tourist visa for up to three months. With a driver's license from your home country and your passport, you can legally drive.

Property taxes are generally lower in Costa Rica than in North America and many other countries. As a foreign resident, you will not pay income taxes on foreign pensions or income generated outside of Costa Rica, but you may have to pay taxes on income generated in Costa Rica. Businesses income, after expenses, is taxed, and there is a 13% sales tax on goods and services, including restaurants, hotels, entertainment, and so on.

For those considering retirement in Costa Rica, it may be unwise to expect to earn a living, or to supplement your income. Pensionados and Rentistas are allowed to own and operate a business but are not permitted to work for wages for someone else.

Establishing Residency

It is necessary to qualify for and establish legal residency if one plans to live in Costa Rica for an extended period of time. To this end, Costa Rica offers several alternatives for legal residency: a pensionado (retiree), rentistas (a foreigner with a guaranteed income) and inversionistas (large investors).

The pensionados and rentistas program has historically been the easiest method of establishing temporary residency in Costa Rica. To quality for the pensionado status, one must fulfill three basic requirements: (1) prove that one earns at least $600.00 per month from a qualified pension or retirement account or from Social Security, (2) change at least $500.00 per month into colones, and (3) live in Costa Rica for at least four months out of the year. In order to quality for rentista status, one must fulfill three similar requirements: (1) prove that one has outside investments that will guarantee $1,000.00 income per month for five years, (2) change at least $1,000.00 a month into colones, and (3) live in Costa Rica for at lease six months out of the year. Neither pensionados nor rentistas pay taxes on money earned outside of Costa Rica.

Inversionista status is available to foreigners who invest either $ 50,000 in strategic sectors of the economy, such as tourism and exports, $ 100,000 in reforestation projects or $ 200,000 in any other qualifying business. They also must reside in Costa Rica at least half the year.

After two years with pensionado, rentista or inversionista status, temporary residents may apply for permanent status. Those who marry Costa Ricans or have a Costa Rican child may also legally call the country home.