The New Proposed Pensionado Law to Attract Foreign Investors and Pensioners

By Hernan A. Carazo ( tourrificticotours@gmail.com )

 

The Project to attract foreign investors and pensioners - File 22-156 is an initiative proposed by the Government of Costa Rica which is currently favorably working its way through the General Assembly having been approved overwhelmingly twice and just awaiting publication in La Gaceta to go into Law and it is aimed at contributing to the post pandemic reactivation of the Costa Rican economy and would have an effective term of 5 years from the moment the Law is published and has the option to extend up to a decade.  It reduces from US$200,000 the amount required to qualify for Residency under the Inversionista Resident program, down to US$150,000.  Currently the law says the following for the Investors and their Dependents category of residency applicants:  

Article 87.- For the application for temporary residence as an investor, the interested foreign person must demonstrate their investment with a capital of not less than US$ 200,000 (two hundred thousand dollars) according to the official sale exchange rate determined by the BCCR, and whether in real estate, registrable assets, shares, securities and productive projects or projects of national interest such as sustainable tourism infrastructure. In those cases where the investment is regulated by special laws, it will be analyzed individually.

The proposed bill establishes that this will apply to all those persons who are authorized to enter our country under the immigration categories of Investors, Retired Residents or Rentista Residents.  President Alvarado pointed out that “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 currently living under COVID and what is happening worldwide, this project was presented to be able to give benefits, to be able to contribute, to be able to attract new capital to the Costa Rican economy”.

The persons who Will Benefit under this proposed law would receive the following:

  • Duty free of all import taxes for one time only, for the importation of household items.

  • Importation of a motor vehicle for personal or family use, free of all import, tariff, sales and economic stabilization taxes, which may be sold or transferred to third parties, exempt from said taxes after three years have elapsed from the date of entry of the vehicle into the country.  A total loss would allow a replacement vehicle to receive the same benefits.

  • The amounts declared as income to qualify for the benefits of this law will also be exempt from Income Tax.

  • Exoneration of 20% of the total property transfer tax for real estate acquired within the term of this law, provided that the beneficiary is the registered owner of the asset.

  • Tax exemption for the internment of instruments or materials for professional or scientific practice.

Penalties:  In the event that the beneficiary person renounces his / her status as a "Pensioner Resident" or as a "Rentista Resident" within the term of this law, he / she must pay the taxes from which they were exempt.  The text also states that:  “To maintain the benefits that a person acquires in compliance with the provisions of this law, the demonstration of permanence of a minimum of days in the country is not mandatory”.