With goals of total reactivation of the economy after the pandemic and continuing to position the country as a regional hub that connects North America with the rest of LatAm, Costa Rica has recently presented legislative developments. On 14 July 2021, Law number 9996 was published in La Gaceta.
Known as the Law for the attraction of Investors, Rentiers and Pensioners, the purpose of this law is to encourage investors, rentiers and pensioners to Costa Rica in order to contribute to the economic revival of the market. (Rentiers being those living solely off investment income.)
Among the benefits that the government hopes to offer to these investors:
- Exemption from import taxes for household goods.
- Possibility of importing up to two vehicles for personal use duty-free.
- The income of those that qualify for this law will be exempt from Income Tax.
- Exemption of 20% of the transfer tax for the goods acquired during the validity of this law.
- Exemption from import tax on goods used in professional development or for scientific purposes.
On the other hand, though, those benefitting from this law will not be considered tax residents under Costa Rican Income Tax Law.
This law establishes a minimum investment amount of US$150,000 in real estate, registrable property, shares, securities and productive projects or projects of national interest.
The Executive has a period of sixty days to regulate this Law.
Law on Promotion and Incentives for Entrepreneurship and Microenterprise
In addition, on 29 June, the Legislative Assembly approved Bill 21,524 in second debate. Known as the Law on Promotion and Incentives for Entrepreneurship and Microenterprise.
This bill establishes that microentrepreneurs and new entrepreneurs will be able to access a special regime for payment of worker-employer dues. This set of short-term incentives is intended to help during the first years of the activity.
This programme assists with the payment of Social Security (CCSS), constituting a reduction that applies to those entrepreneurs / microenterprises that register or resume their economic activities permanently and have a maximum of five workers at a time.
The other incentive consists of a special reduction in the compulsory contributions to the Joint Institute for Social Assistance (IMAS) and the Social Development and Family Allowances Fund. Both incentives will run for a period of four years, and cannot be extended.
The bill also proposes a reduction in the premium for occupational risk insurance (INS), as well as a simplified processes for the application, for the start of operations, and for the renewal of authorisations by municipalities. It also includes the creation of a National Incubation and Acceleration Network, a programme that aims increase the competitiveness of entrepreneurs and microenterprises.
Local Knowledge – International Coverage
Founded in 1979, Auxadi is a family-owned business working for multinational corporations, private equity funds and real estate funds. It’s the leading firm in international accounting, tax compliance and payroll services management connecting Europe and the Americas with the rest of the world, offering services in 50 countries. Its client list includes many of the top 100 PERE companies. Headquartered in Madrid, with offices in US and further 22 international subsidiaries, Auxadi serves 1,500+ SPVs across 50 jurisdictions.
All information contained in this publication is up to date on 2021. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.