The Best Visas and Residency Strategies in Costa Rica

The tropical cove where my daughter and I enjoyed the gentle surf looked oddly familiar.

Turns out if you’ve seen 1492, Congo—or heck, even Paddington—you’ve seen it too. I later learned it was a location in these films and many others about tropical islands.

Playa Las Gemelas is near the Pacific coastal town of Manuel Antonio—specifically in the eponymous nature reserve on the south side of town. It’s one of the most beautiful places I’ve ever seen. Besides the glorious beaches, there are towering tropical rainforests full of tree sloths, iguanas, and an array of colorful birds. My eight-year-old’s eyes were wide as saucers as we hiked our way through the green hallways.

Along with Panama to the south (read my last column here), Costa Rica is a haven of stability and prosperity in Central America. Famed for its beaches, rainforest, and volcanoes—and for being the only country ever to have voluntarily disbanded its armed forces—Costa Rica is one of the most popular tourist destinations in the Western Hemisphere. It has some of the highest standards of living and overall development in the region.

But it’s also a place where foreigners can get long-term residency with relative ease—one of the many reasons it came in No. 1 on IL’s 17 Best Places to Retire 2024. About 70,000 US expats already live here, many as retirees. Indeed, the coastal highway between the capital of San José and Manuel Antonio is dotted with little enclaves of Americans and Canadians who’ve built lovely homes on the bluffs overlooking the Pacific playas.

In this article, I’m going to tell you everything you need to know to get residency in this delightful tropical gem.

Visas and Residence Permits

Costa Rica offers two types of temporary visas and three forms of long-term residency.

• 180-Day Tourist Visa: Last year, the government announced it would double the time Americans, Canadians, and those from a few other countries can remain in Costa Rica with the tourist visa granted on entry. Like Mexico, Costa Rica was prompted to make this change to accommodate the thousands of North Americans who own holiday homes in the country.
• Digital Nomad Visa: Costa Rica jumped on the digital nomad bandwagon two years ago. If you can prove you’re earning foreign source-income between $3,000 and $4,000 a month and have private health insurance, you can stay in the country for a year. The visa is renewable for a second year if you spend at least six months in the country during the first year.
• Pensionado Residency: In common with many other countries in Latin America, retirees who can prove a minimum of $1,000 in monthly income from a retirement fund or permanent pension can remain in the country indefinitely. You need to prove a local address (rental is fine) and insurance.
• Rentista Residency: This grants you a two-year permit to remain in-country. You must deposit $60,000 in a foreign bank account and show proof of a fixed monthly transfer of $2,500 from it into a Costa Rican bank account, valid for two years. Alternatively, you can simply deposit $60,000 in a Costa Rican bank account. The permit can be renewed for another two years with another deposit of $60,000.
• Inversionista Residency: This is a form of permanent residency, but without the right to work in Costa Rica. It requires a minimum investment of $150,000 in real estate, stocks, bonds, or local business.

All three types of residency enable you to apply for permanent residency after three years. With that, you can work in the country. Note that even if you’re not a permanent resident, you can own a Costa Rican business—but you’re not allowed to work in it yourself.

Successful applicants for the Rentista and Inversionista visas can bring household items into the country without paying import duties. You can also import up to two vehicles, including cars, boats, and aircraft.

The processing time for long-term residency averages from four months to a year, depending on what you’re applying for and how busy the immigration department is. During your wait, you can either return home or stay in Costa Rica pending the outcome.

Note, however, that if you plan to drive in the country, your foreign driver’s license is only valid for three months. To keep its validity, you’ll need to exit and re-enter the country every 90 days—say, crossing into Panama—or apply for a Costa Rican license.

Once you’re approved as a long-term resident, you’ll need to register with the public healthcare system. You must pay 12% of your declared monthly income to the National Health System.

That’s well worth it, given that the country has one of the best healthcare systems in Latin America—so good, in fact, that it’s one of the biggest medical tourism hotspots in the world, ranked in the top 20 by the United Nations. Many doctors speak English. Prescription drugs are far cheaper than in the US.

The combination of excellent health care, abundant healthy produce, and a relaxed lifestyle, explains why Costa Rica is home to one of the world’s “Blue Zones,” characterized by exceptionally long life expectancy.

Low Taxes in Central America’s Green Gem

One of the most attractive features of Costa Rican residency: You won’t pay any income tax on foreign source income. That’s because unlike the United States and Canada, Costa Rica operates a territorial tax system. All foreign source income, whether active or passive, is tax exempt. (Of course, you’ll still owe taxes to the country where you earned that income. Read more about that on page 30.)

You will, however, pay tax on any Costa Rican source income, such as renting out a vacation home or profit from a local business. If you do earn local income, tax rates range from 10% to 25%. There’s a 1.5% property transfer tax paid by the purchaser, as well as a property tax ranging from 0.25% to 0.55%. Finally, there’s a 13% value-added tax on everything except food, medicine, and similar necessities.

Any taxes you pay to Costa Rica can be offset against tax on the same income by the United States or Canada, both of which have tax treaties with the country.

Expat-Friendly Spots to Rent or Buy

Since having a local address is critical to achieving long-term residency, it’s important to plan for that upfront.

One of our key principles at International Living: You should always rent overseas before you buy.

Costa Rica is extremely popular with North American expats and is well-served with websites and other resources—like Facebook groups for expats—that allow you to search for a place to stay. Search “US Expats in Costa Rica” on Google or Facebook; you’re sure to find links to rental listings there.

Being a tropical country, Costa Rica is humid. The Pacific Coast, where most expats live, is the hottest and most humid. A sizable number opt for the mountains in the north, which are cooler but still humid. The Central Valley, where the capital San José is found, has a cooler temperate climate with less humidity than the beaches or mountains.

Rents vary widely from as little as $500 for a one- or two-bedroom flat, condo, or small home, up to $5,000 a month for a large house in a desirable location. Rents are cheaper in the countryside, whilst oceanside properties are the most expensive.

Even so, properties close to the beach can be had for as little as $2,000 if you’re willing to walk 10 or 15 minutes to get to the water.

Once you’ve got a place to stay, you’ll find that utilities are of a First World standard, and relatively inexpensive. Electricity, water, and gas will cost you about $230 a month. Internet access is about $50, while cell phone service is about $25. The average monthly grocery bill for a couple is about $600.

When and if you’re ready to buy, there are almost no restrictions on foreign property ownership. The real estate system is well-developed, given the large number of expats, and all title deeds are supposed to be registered with the national government as part of a searchable database.

This hasn’t always been the case, however, and it’s important to work with an attorney to investigate property for any potential encumbrances. Although it doesn’t happen very often, occasionally a claimant will appear saying that they have title to the property based on long-ago events or relationships.

Because title insurance isn’t available in Costa Rica, it’s critical to have an attorney go through everything with a fine-tooth comb.

The Path to Costa Rican Citizenship

As a holder of multiple passports, I’m a big fan of obtaining citizenship if you’re going to live permanently in another country.

In Costa Rica, you can apply for citizenship via naturalization after seven years of long-term residency. If you can demonstrate that you have Latino heritage, the period is only five years. And if you marry a Costa Rican, the period is only two years. Dual citizenship is no problem. When it comes time to apply for citizenship, you’ll need to pass a Spanish language exam, as well as a test on Costa Rican history and civics.

Pros and Cons of Moving to Costa Rica

Costa Rica isn’t a big financial or business hub, which attracts many expats to neighboring Panama. Instead, Costa Rica’s economy revolves around tourism. The upside is Costa Rica is one of the world’s most progressive nations when it comes to preserving its natural resources and heritage. Much of the country is national parks or nature reserves, and there are strict regulations governing the environmental impact of developments. As a popular tourist destination, getting in and out of the country can be an ordeal. The last few times I went there, the line at the immigration counter was over an hour long. (Admittedly, I went over Easter vacation—so go off-season, if you can.)

And of course, along with every country south of the Rio Grande, things are a little slower than many North Americans are used to. Not for nothing do the ticos speak of their lifestyle as pura vida, literally meaning “pure life,” but more accurately translated as “good living.”

Somehow, I’ve managed to set foot in over 80 countries in my life. I maintain a “return list” of those I will go out of my way to visit again, no matter how many times I’ve been there before. And Costa Rica is near the very top. Learn about our upcoming Costa Rica event here.