Costa Rica – Tax heaven, eco country or banana republic?

Is Costa Rica a tax heaven, an eco country or a banana republic? Or everything together? Probably it’s a bit of everything.

When we came to Costa Rica in 1993 we were glad that we met people who provided us with good information… From the embassy and the lawyers came not so much useful… We would like to pass this knowledge on to you, and maybe we get to know interesting people at this opportunity…

How much has to be paid Costa Rica Tax?

Only the revenue which were made in the country, are taxable.

Income from foreign business is not taxable. The controls are kept within reasonable bounds.

If you take a look at the tax authorities here in the provinces and compare it to one in a European city, you will notice differences. Of course, even in Costa Rica a business man needs a tax consultant.

If you plan to buy a property, the value will be estimated or declared by a notary. Currently the tax is at about 3-4 % of the estimated value. As at the moment prices are low, this could be an opportunity to buy.

Switzerland is expensive, Latin America’s Switzerland as well 

Nowadays it’s well-known that Costa Rica is one of Central and South America’s most expensive countries. But it depends also on what you require. If you pass through the small villages, nothing will remind you of the allegedly rich people who are supposed to live here.

Furthermore, if you go to the market to by local products such as Papaya, melon, mango or craft cheese, the prices are very low. As well, the fish from the local fisher is not expensive, but you will enjoy superior quality.

Medical treatment also is more affordable than in Europe or the USA.

Demanding emigrants still should calculate around 1,000 – 1,200 € per month.

Palm trees, white sand and sunny weather in Costa Rica
Perfect place to spend a relaxing day

Volcanoes, rain forests, palm trees and dream beaches 

Almost no other country in the world offers such a variety of life like Costa Rica. Whereas a part of the species still is unknown. It can be assumed, that only 15% of the species have been studied yet. One thing is sure: Costa Rica is Central America’s most varied and probably cleanest country.

Almost 30% of its surface is protected. The laws concerning have been tightened up. But the controls by environment authority MINAE (Ministerio de Ambiente y Energía) are often complicated.

Political stability and social peace 

Costa Rica has developed from a banana and coffee republic to a modern industrial society, with all its advantages and disadvantages. However, Costa Rica is still the world’s second banana exporter. Coffee and pineapple are also very popular export goods.

But by now, also computer chips and electronic devices are produced in Costa Rica on large scale. The so called eco tourism also became an important economic factor.

Democracy is an important value for Costa Rica. After all, in 2011 the conservative former head of state, Miguel Angel Rodriguez (from 1998 – 2002) was arrested for five years in prison due to corruption. Since then, the situation clearly improved.

And Costa Rica is now Central America’s country with the lowest corruption level. The former president Luis Guillermo Solís promised a “moral revolution” and wanted to fight corruption and inequality. But still there are some province official or mayors messing around. Which is not always for the public so good.

From 1 October 2018, electronic invoice processing was introduced, but many companies and public authorities seem to be overburdened with this.

Other dimensions

But many countries can only dream of such a situation. Even German companies are apparently almost as corrupt as Nigerian ones, as states the German journal DIE WELT.

In Germany, criminals launder, it is estimated that more than 100 billion euros will be laundered in 2018. And if they are caught, they can often keep their money. According to estimates, the UK, too, has deposited 68 billion pounds from Russian sources in British tax havens in the past ten years alone (2018).

Russian and other oligarchs settled in London’s most expensive neighbourhoods and made heavy purchases. Among other things, football clubs and invested millions.

Emigrate – when if not now? 

My conclusion is that Costa Rica is an interesting destination for emigrants – with lots of nature, friendly people and an interesting tax system.


Jana Hernandez


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