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

  • Posted on: 14 December 2015
  • By: Miguel

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

How much has to be paid? 

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 1000 – 1200 Euro per month.

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 per cent 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 towards a modern industrial society, with all its advantages and disadvantages. However, Costa Rica is still the world’s second coffee 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 current president Luis Guillermo Solís promises a “moral revolution” and wants to fight corruption and inequality. But still there are some province official or mayors messing around which is not always for the public good.

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.

Emigrate – when if not now? 

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

Gastautorin Jana Hernandez