Working from the tropics: Costa Rica promises digital nomads a life of ‘Pura Vida’

George Soriano March 26, 2021

A year into the brave new world of pandemic-related issues, it appears that some important changes to the way we live are here to stay.

One positive trend that’s expected to continue is working from home, as companies learned that this can actually increase productivity while lowering costs associated with maintaining large brick-and-mortar office spaces.

In fact, says Emergent Research, a California-based consultancy focused on small businesses, “multiple studies indicate that most firms are planning on greatly expanding their use of remote work even after the pandemic is over.”

This is also good news for the estimated 10.9 million U.S. citizens who didn’t have to fight rush hour traffic last year on their daily commute or spend as much on transportation and work clothes.

In trying to gauge how these workers felt about working from home, the international firm MBO Partners surveyed 3,687 independent writers, designers, editors and content creators, along with professionals working in IT, marketing and communication, among other professions. They found 83% of them reported feeling “happier working on my own,” with 71% saying that “working on my own is better for my health.”

We can only assume that none of those surveyed had little ones climbing over their laptops or spilling juice boxes all over mom’s and dad’s paperwork.

But the idea that all of these remote workers have to carve out a space at home to get their work done is changing.

According to MBO, the ever-evolving advances in digital tools and communication technology has made it possible for 4.8 million workers to travel while they work. Some are trading in their office chair for a lounge chair at the beach, and their home offices for co-working spaces in far flung tropical destinations.

“As long as I have good internet connection, I can work from anywhere,” says Marie Elena Hawkins, a writer and holistic health consultant who moved to Costa Rica from Tennessee a few years ago.

This subset of independent workers are often called “Digital Nomads,” since they rely on digital technology to keep up a lifestyle that allows them to see the world while they earn a living. They manage this by working from places with a similar or lower cost of living while garnering wages tied to higher-cost locations.

“It takes time to figure out how to make it all work, but the benefits greatly outweigh the drawbacks,” said Paul Butcher, a digital nomad from the UK who is currently living in Costa Rica. “Before choosing my next location, I would consider the cost of getting there and getting around, renting a place, and how much good internet and mobile service is going to cost me.”

MBO says nomads are twice as likely to be male than female and are most often millennials, although Gen Xers represent about quarter of the group. About half of nomads have a college degree, and the vast majority are “satisfied” with their lives. Some 83% are optimistic about the future, and 81% plan to continue their independent lifestyle.

“I’m the envy of my friends,” said U.S. expat David Fulton who runs a tourism outfit on Costa Rica’s Pacific coast. “They think I’m on a permanent vacation, but that’s not it at all. I go to work every day, just like they do. But when my day is over, I’m already at the beach or enjoying a spectacular view. It’s a totally different experience.”

The MBO report on the rising trend of Digital Nomadism says that approximately 17 million independent workers aspire to a digital nomad lifestyle, although the vast majority never take the plunge. However, concerns over future possible lockdowns or potential hospital stays makes traveling to wide open spaces on travelers insurance all the more attractive, especially for the uninsured.

Over the past decade, MBO notes a significant increase in demand for outsourced professional services as “organizations substantially increase their use of non-employee labor.”

A few countries in Europe are trying to cash in on this trend and attract international nomads to help boost economies that were hard hit during the pandemic. Most notably, the Portugese archipelago of Madeira is building a “digital nomad village” with the cooperation of co-working spaces, real estate, hotels and rental car companies, all working together to attract this demographic. Portugal is also creating a special visa category that will make booking extended visits to this warm ocean side spot a no-brainer.

And according to The Independent, “the Caribbean islands of Barbados and Antigua have unveiled similar schemes” to help boost their economies.

What about Costa Rica?

Last year, as lockdowns began throughout the world,  the Costa Rican government made it posisble for visitors to extend the validity of tourist visas. Currently, anyone who entered the country in 2020 can stay without penalty until June 2021.

As that deadline approaches, a group of Costa Rican legislators are working to pass a new one-year temporary residency status, geared toward digital nomads.

While details may change before the project becomes law, the requirements would include proof of an average monthly income of $3,000 made from sources outside of Costa Rica, and health insurance, to cover any medical needs while in country. Acording to the bill, this new visa will be processed online and would allow nomads to bring a spouse and children, as well as apply for a six-month extension during their stay. Nomads under this immigration status will also enjoy tax-free status, meaning that they can also bring in equipment necessary for their work duty free.

The details of this new sub-category of temporary residency status are being discussed by Costa Rican legislators as this is written. But information will be posted at The Tico Times (or  the website for the U.S. Embassy in Costa Rica as it becomes available.

For now, nomads who are just arriving can stay a maximum of 90 days on a tourist visa, and apply for temporary residency status in country. Many tourists opt to gain perpetual 90-day extensions by leaving the country and returning under a new tourist stamp.

For those who make a “visa run,” as they are commonly called, immigration officials will be on alert upon your return. They are mainly concerned about verifying that tourists are not working for Costa Rican businesses — and thus taking jobs away from local workers. They are also checking that tourists have enough money to support themselves while in Costa Rica and that a departure flight back to their counry of origin has already been purchased.

Is Costa Rica a good option for digital nomads?

We looked at the Nomad Index, a list of countries ranked according to the best conditions for digital nomads. The data was compiled by CircleLoop — a UK-based company offering cloud services to small businesses. The index compared the average speed for fixed broadband and mobile internet, the average price of internet service, and visa access. It also considered acceptance of migrants, average rental cost for a one-bedroom apartment and the score of each country on the World Happiness Index, among other criteria.

Costa Rica ranked 41st worldwide and fourth in Latin America behind Chile, Argentina and Brazil. What do those countries have that Costa Rica doesn’t? Chile (28) has much better Internet speed and the cost of that service is less expensive. Argentina (40) has a much lower cost of living. And Brazil (35) ranks just a bit better in most categories.

Where does Costa Rica shine? Its “happiness index” ranks the small Central American country at the top of the competition.

As far as tropical countries go, Costa Rica ranks third, behind Singapore (15) which is much more expensive than Costa Rica and Thailand (18), which has a similar cost of living, but is less open to migrants.

Becoming a digital nomad in Costa Rica

To help guide digital nomads considering long- or short-term relocation to Costa Rica, a new consultancy called Costa Rica Dream Team is offering online courses designed to take all the mystery out of living and working there.

In addition to covering details about real estate, cost of living and doing business in Costa Rica, courses explore residency, health care, entertainment, recreation, and even cultural dos and don’ts. Their digital format, supplemented with online question-and-answer webinars and insider blogs were developed for people on the go.

“We help our clients make a seamless transition to Costa Rica and enjoy a cross-cultural experience that is good for everyboody involved” said Julio Fernandez, who helped found Costa Rica Dream Team in 2020. “Too many people arrive with unrealistic expectations, get frustrated and leave. Our motto is ‘Know before you go.’ ”

At the end of the day, most nomads agree that making a nomadic lifestyle work depends on making informed decisions, being open to new experiences, and having a strong internet connection.

For those willing to make the leap, it can be an amazing adventure.

Costa Rica’s land borders have reopened to tourists

Costa Rica’s land borders have reopened to visitors as of Monday, April 5.

Tourists who do not require an entry visa will be allowed to enter the country via land border posts. This includes citizens of the United States, Canada, and others, as defined by Groups 1 and 2 of the general guidelines for entry for non-residents.

Those who require a visa (Groups 3 and 4), will only be allowed to enter Costa Rica when Costa Rican consulates begin offering such services again, on a date yet to be defined.

As part of this gradual opening of land borders, the sanitary order that required Costa Ricans, residents and people with special migratory categories to comply with a quarantine has been eliminated.

Those who enter by land must meet the same health requirements that are required of visitors who enter by sea or air:

  1. Complete the digital epidemiological form known as the Health Pass: https://salud.go.cr/. This must be completed within the 48 hours before the trip.
  2. Purchase medical insurance, which must either be through INS or Sagicor, or comply with these details: US$50,000 for medical expenses, including COVID-19; US$2000 for accommodation expenses in case of quarantine for COVID-19.

Through the Health Pass, the tourist will obtain a QR code which will be verified by immigration authorities at the border.

Immigration agent will also verify continuity of travel (e.g. a plan to exit Costa Rica), economic solvency (US $100.00 per month) and passport validity.

Controlled mixed migratory flow

This first phase of land border reopening does not authorize the passage of migrants who seek to cross the region in order to reach the United States.

This so-called “controlled mixed migratory flow” enters from Panama and continues into Nicaragua and beyond. For the time being, these people should remain in shelters enabled in Panama.

Nicaraguans with jobs in Panama are authorized to pass through Costa Rica. This is enabled through “Sanitary Bubbles” operations, which have been coordinated since last year by migration authorities.

Costa Rica first closed all its borders in March 2020 as a health measure to prevent the spread of Covid-19. The maritime and air borders opened in August 2020.

How to fill out Costa Rica’s inactive company tax return

Published Monday, April 5, 2021
 
By Garland M. Baker
Exclusive to A.M. Costa Rica


The Semana Santa holiday gave certified public accountant Kevin Chavarria, Licentiate Xochilt Quezada and this author a chance to gather and hash out the details of what is required to put on Costa Rica’s new tax return for inactive companies.

Last year the form was to be called the D-135. However, that was changed to the D-101, and then changed again to the D-101 Simplificado, which stand for simplified in English, but its official name is the D-101-2. The tax return was due March 15, but has now been extended to an undermined date because it is not ready. When it is, people will have two and a half months to comply and file the return.

The tax department says the form is to be just that, simple, with very little to fill out, just assets and liabilities. The big question is what value to put for assets like property when that asset usually has several values in Costa Rica: 1) the actual value paid, 2) the value put on the closing deed by a notary (usually not the same number because notaries put a lesser value to save clients money on transfers), 3), the Registro Nacional value, 4) the municipal value and 5) the actual market value.

The tax department states it wants the current market valuation for any assets calculated using international financial reporting standards. Most people do not have a clue how to come up with that number, and most do not want to pay an accounting professional to calculate it.

Here is a guideline for those wanting to fill out the form themselves:

Bank accounts, and other financial instruments: The balance listed as of Dec. 31, 2020, is the amount to use on the inactive tax return. If the amount is in United States dollars, it should be converted to Costa Rican colons by multiplying the dollar amount by 617.30 (the colon sell rate on Dec. 31). For example, $100 would calculate out to 61,730.00 colons.

Vehicles: Using the value listed at the Registro Nacional is a pretty safe bet for all vehicles in inactive companies. The amount is easy to obtain by logging into the Registro Nacional and selecting Consultas Gratuitas (means free lookups in English) then navigating to Bienes Muebles (moveable property), and selecting the type of vehicle from the list. A window will open asking for the vehicle number. Upon putting in the correct information, a report will be generated and the number to use on the tax return is the valor hacienda (tax value).

Properties: Using the value listed at Registro Nacional, if it is similar to the municipality value, is a good starting point to determine the amount to put on the inactive tax return. With that said, sometimes the tax value listed is way out of wack with the real value of a property because when it was purchased a notary put a low figure on the original deed of acquisition. In this case, an accounting professional should be consulted. Getting to reports for property at the Registro Nacional is as easy as it is for vehicles, but option Bienes Inmuebles (fixed assets) is selected instead of Bienes Muebles.

Other types of assets: If an asset is not listed at the Registro Nacional or in a bank or money market fund, it probably should not go on the inactive tax return unless its value is substantial, like works of art. In this case, a tax professional should be consulted to determine the correct course of action.

Costa Rica’s tax return filing system is simple to use. It is called the Administración Tributaria Virtual, or ATV for short. The problem for expats is it is all in Spanish. However, most browsers will translate all the information into almost any language instantly. Filers using the system in English, have encountered problems when setting up an account because their browser does not translate identification numbers correctly. Initially, it is best to use Spanish for the system to work properly.

After much research, and discussion, Chavarria and Lopez both agreed the tax authority is just starting out with their venture to obtain data from inactive companies and really does not have the guidelines clear. It appears the data accumulated from the D-102-2s will be cross-referenced with the information at the Banco Central received from the Registro de Transparencia y Beneficiarios Finales reports. In English, that report is referred to as the transparency and final beneficiaries register or RTBF for short.

The RTBF is due now, this month of April. Filing it, if last year’s was filed, is straightforward. There are two options: 1) copy last year’s return and make simple changes or 2) erase last year’s return and start over again.

Here are the steps: 1) sign into the Banco Central, 2) select the type of declaration to be filed, 3) select to copy or start over, 4) make changes as necessary and finally 5) click to save. It is important to note that the document is saved as a draft. To finish the process it must be submitted as complete on the main document window.

Usually, filling out tax forms is a struggle, but it appears the D-101-2 will be a breeze if one has the right data to start off. The tax people promised a simple RTBF filing, and they came through.

Remember, the D-101-2 cannot be filed yet, but will be enabled soon. The RTBF is due now for the entire month of April.

Costa Rica Immigration Requirements – The Police Record Affidavit

One of the main documents that people have to provide to the Costa Rica immigration authorities when requesting residency is the so called “police record”, which is a statement or certification or affidavit provided by the authorities in which the person´s police record (felonies and misdemeanors) is listed.

Many years ago, it used to be that a simple statement from the local police authority would suffice but that is no longer the case.

As of Oct 14, 2019 there was a general directive issued (in Spanish “Circular”) in which the Director General of Immigration establishes that according to the Law, all persons requesting residency must furnish the authorities with a police record that must be translated (if not issued in Spanish) and apostilled (legalized in international terms).

The Director goes on to interpret that it is therefore their responsibility to make sure that the requesting party has not committed a crime in the totality of the country where he/she is from.

She states that countries such as the U.S.A. and Canada have criminal legal systems that have a local and a federal jurisdiction (Mexico and Brazil as well), but that certifications issued by local or the federal government that do not include the name, the personal identification number and fingerprints of the interested party do not guarantee a clear picture of that person´s criminal past.

It is for these reasons that immigration started to request from those countries that have a federal system of law that the criminal record include these three items:

    • Name
    • Identification
    • Fingerprints from the federal authorities and not just from the local or state authority

The ruling specifically states that in the case of U.S.A. citizens (or residents), they must obtain and provide a document that includes the information from the “National Crime Information Center Interstate Identification Index or Triple III”.

The document must also be apostilled (a concept of international law that we will discuss in a future article) and translated by an official translator or by a Costa Rican Notary Public that knows both languages.

The person´s address that must be stated is that where the requesting party has resided for the last 3 years. This is important as there will be a number of different documents that have to be provided and the latest address in all of them must match.

In the case that the certification of the police record does indeed state prior arrests or pending criminal cases, then a certification of the status of these cases must also be provided, with translation and legalization, of course.

If and when a person requesting residency files his/her paperwork and is missing this document or has difficulties with this document, the immigration authorities will issue a notification stating the problem and allowing a certain amount of time to address it.

In a subsequent directive dated June 4th 2020, the Director General explained that it was the American Embassy which informed them that the “NCIC” is a database which is used by the FBI for obtaining criminal records through the “Criminal Justice Information Services” Division which guarantees complete information if a person has been convicted of a crime.

This issue has caused quite few questions from interested parties and for that reason, the Director General clarifies the following: The documents through which U.S.A. citizens (and residents for more than 3 years), includes Puerto Rico, can satisfy their criminal record requirement are:

1) A document issued by the “U.S. Department of Justice Federal Bureau of Investigation Criminal Justice Information Services (CJIS) Division”;

2) A document that includes the following statement: “A search of the fingerprints provided by this individual has revealed no prior arrest data at the FBI.

This does not preclude further criminal history at the state or local level.” The document must contain both items.

Finally, it is important to state that according to the rules that regulate visas in Costa Rica, all certifications issued abroad will have an expiration date of 6 months from the date issued, after which the interested party will have to provide a new document.

*** Lic. Jorge Montero B. is a bicultural lawyer born in New York City, educated in the U.S.A. and in Costa Rica.

He holds various postgraduate and master’s degrees in Criminal, Commercial, Environmental and Agrarian Law from the University of Costa Rica and has over 30 years of litigation, contract and counsel experience.

Email: [email protected];

 

The Mandatory Shareholder/Beneficial Owner Filing for Costa Rican corporations has been extended

The Mandatory Shareholder/Beneficial Owner Filing for Costa Rican corporations for 2020 has been extended until April 2021. All Costa Rica corporations are obligated to file a sworn disclosure form every year to identify the shareholders or beneficial owners of the corporation. The next filing was due in September of 2020. That has now been moved to April of 2021. The regulation was published in the Official Gazette no. 201 DGT-ICD-R-19-2020, titled “Reform to the Joint Resolution of General Scope for the Registry of Transparency and Final Beneficiaries.”

In April of 2021, the system will have preloaded the prior application that was filed by the corporation. A such, in April the corporation can make any updates if any changes have occurred in the ownership of the corporation. If there are no changes, then the corporation can simply confirm that on the declaration and no changes are made.
A such if you file the Shareholder/Beneficial Owner form required in 2019, you are fine until April of 2021.
Any corporation that was registered and filed in the National Registry from January 1, 2020, through March 31, 2021, will file the declaration April of 2021.

Requirements for Entering Costa Rica During COVID Pandemic as of February 25, 2021


Below is a complete explanation of the needed requirements for entering Costa Rica during the COVID Pandemic.  We have also included some great tips that we have learned from listening to visitors who have previously arrived to Costa Rica in the past few months.  Hope this helps in making your experience seamless and without any unexpected delays.

 

NOTE:  Information current as of February 25, 2021.  Requirements for entering Costa Rica can change at any time. The Costa Rica Tourism Board (ICT) lists all the current entry requirements for tourists on its website. Click here for the official page.

Be sure to save copies of all required documents on your cell phone, plus bring hard copies with you as well, if at all possible.

1. COSTA RICA DOES NOT REQUIRE A NEGATIVE COVID TEST TO ENTER THE COUNTRY

2. PURCHASE TRAVELER’S COVID MEDICAL INSURANCE

Be sure your insurance covers the total number of days that you plan to be in Costa Rica, because immigration in CR will stamp your passport for the number of days for which you have insurance (should match your proof of onward travel documents).

COVID insurance can be purchased through the two Costa Rican companies, National Insurance Institute (INS) or Sagicor of Costa Rica, covering the duration of your stay in Costa Rica. Policies from these two companies are pre-approved and are guaranteed to be accepted by Costa Rican authorities

However, many visitors choose international policies, because they are often cheaper. Tourists who opt to purchase an international policy must bring a letter demonstrating:

  • Guaranteed coverage of medical expenses in the event of becoming ill with COVID-19 while in Costa Rica, for at least $50,000 USD.
  • Minimum coverage of $2,000 USD for lodging expenses issued as a result of the pandemic (see below for foreigners who own property in Costa Rica)
  • Validity of the policy throughout the planned stay in Costa Rica.
  • For Visitors to Costa Rica from the US: We’ve heard Trawick International offers affordable policies that meet Costa Rica’s requirements. When filling out the questionnaire, it is recommended to put “0” in the Trip Cost section so you are only purchasing insurance to cover for COVID related instances and not paying for extra add-ons like Trip Cancellation, etc. if you don’t want them.
  • For Visitors to Costa Rica from Canada:  Just recently, Trawick International began providing a policy for countries other than the USA.  One from Canada that has been used successfully to enter Costa Rica is TUGO Insurance.

3. FILL OUT THE ELECTRONIC EPIDEMIOLOGICAL HEALTH PASS FORM

Available at https://salud.go.cr. This should be completed within the 48 hours before boarding for Costa Rica. It generates a QR code that you must show upon arrival. Some airlines ask for it at check-in.

  • Some visitors have mentioned that you must check off INTERNATIONAL when asked to choose between International and National insurance, regardless of whether you purchased Costa Rican insurance or not. Otherwise it will not let you continue.
  • Please Note: This website says they will send you a QR code by email, but some people have said they were not receiving it prior to their departure.  It is recommended that when you are on this website, take a screenshot of the QR code, making sure that your name shows up on the screenshot as well. Save this on your smartphone to show at check-in and immigration.

4. OTHER REQUIREMENTS:

In addition to the coronavirus-related measures, tourists must also meet Costa Rica’s general visa requirements:

  • Visitors must have a valid passport.
  • Proof of intent to exit the country (an outbound ticket) within 90 days. Be sure your insurance coverage matches the number of days you will be in Costa Rica before your outbound flight.  Immigration will stamp your passport for the number of days that you have health coverage for COVID only – not the usual maximum of 90 days. (For example:  if you bought enough COVID health coverage for 21 days, then your passport will be stamped for 21 days after your arrival in Costa Rica.).
  • Non-residents (i.e. tourists) are allowed to remain in the country for up to 90 days before being required to exit. Tourists MUST exit Costa Rica prior to the number of days stamped on your passport.  You may re-enter Costa Rica immediately again once you have your passport stamped by the country that you entered upon leaving Costa Rica.  At the present time, the land borders are closed to enter Costa Rica, so your only option is to either drive out of Costa Rica and then fly back in, or to leave Costa Rica by air and return by air.
  • It is very difficult to extend your stay in Costa Rica beyond what is stamped in your passport.  For this reason, it has been suggested that when purchasing your insurance, purchase enough to cover the amount of days you plan to remain in Costa Rica, including having to make a trip out of the country every 90 days, so you do not have to purchase more insurance every time you are required to leave the country.

5. IF I OWN A PROPERTY IN COSTA RICA, DO I STILL NEED INSURANCE?

You will still need health insurance. However, proof of property ownership can waive the lodging expenses requirement ($2,000 USD) for your insurance policy. Email [email protected], and they can confirm if you qualify.  You will need to show proof that you own a property in Costa Rica by providing a copy of the persona juridica of your corporation and a document that proves that the corporation owns the property (such as a utility bill). Your property manager or lawyer should be able to help you obtain copies of these documents.

  •  Please Note:  This will have to be completed before you fill in the HEALTH PASS FORM.

RT PCR Covid 19 – Guidelines – Coco Medical Center

 

General information

  • Dedicated phone number to book appointments: (506) 8705-3260 or +1 (954) 278 1650
  • Email to book appointments: [email protected]
  • WhatsApp or Telegram consults about the process: (506) 8705-3260
  • Appointment is required for the test.
  • The test is required for each traveler including kids.
  • Prior your test a form needs to be completed.
  • Travelers need to take the test 72 hours before the flight.
  • Results will be received by the patient in less than 48 hours after the test by email.
  • Our administrative staff is very efficient and has included agreements with 3 laboratories to guarantee that all your travelers will get the results on time for their flights.
  • Check our facility: Virtual Tour!
  • Web site: cocomedicalanddentalcenter.com
  • Our Medical Group: mediredcr.com

Cost (Patients can pay with credit card or cash)

  • At the facility:
  • 1to10patients:$160
  • Groups of 10 to 20: $140
  • Groups higher than 20: Contact us for pricing at (506) 8308-9986 or (506) 8334-2754
  • House/Hotel visit:
  • 1 to 2patients:$220
  • Groups of 2 to 20:$200
  • Groups higher than 20: Contact us for pricing at (506) 8308-9986 or (506) 8334-2754
  • Emergency fast RT-PCR Covid test (Results in 24 hours)
  •  Approximated cost $460

Required information for each patient taking the test:

  • Name:
  • Last Name:
  • Date of birth:
  • Birth Gender:
  • Passport number:
  • Nationality:
  • E-mail:
  • Arrival date (to Costa Rica):
  • Departure date and time:
  • Where are you traveling back to?:
  • Pregnant? Yes/No
  • Our team: As professionals in the healthcare industry, we have a great responsibility and that’s way we have always pursued the highest quality standards and cutting-edge medical equipment. This is one of our main goals, to provide the best healthcare to our patients.

Complete Immigration and Residency Update for Costa Rica: Where do you Stand?

By Laura Gutierrez of Immigration Help Costa Rica

Tensions are running high as we continue to endure COVID and its impact on tourists and those seeking legal residency in Costa Rica. Readers under stress are least capable of absorbing reams of information, so I will be as concise as possible in addressing or re-addressing some key issues.

March 2 visa expiry date:
Out of compassion for tourists and residency applicants in 2020, the Costa Rica government extended visa expiry dates several times throughout 2020. The final line in the sand was drawn for March 2, 2021. The history of and qualifications for this benefit was covered in previous articles, so I will only outline the responses required on your part for the sake of brevity. While the government has a habit of last-minute changes, this time, I would not count on any further extensions beyond March 2 and plan accordingly. If your visa was automatically extended between March and November 2020, you will not be able to apply for extensions. Depending on the category, some others can apply for extensions, but the process is arduous.

If you are applying for residency, proof of an appointment for submitting your applications to the DGME (Immigration) will get you past the March 2 visa expiry date. It is considered an act of good faith on your part, indicating your seriousness in pursuing legal status in Costa Rica. Once your application is actually submitted to the DGME (Immigration), you will be issued an Expdiente (proof of submission with case #). That then becomes the legal override of visa limits beyond that submission date and allows you to stay in Costa Rica indefinitely up to the date of your residency application approval. You will also be allowed to come and go – but – within COVID travel rules that include COVID insurance.

However, this visa override benefit does NOT apply to the validity of foreign driver’s licenses. Those remain tied to the visa stamp (duration) you receive upon your last entry into Costa Rica. Get caught driving without, and you are in for a terrible day: fines and license plates removal, just for starters.

Driver’s license validity:
I could fill this space with a lot of purple language I have heard about this infuriating situation. But as frustrating as this myopic policy remains, you will not be allowed to drive legally in Costa Rica past March 2 or any visa expiry beyond that date. There is a lot of pressure being brought to bear on the government from MANY quarters. Yet, no changes seem imminent as of this writing.

Land borders initially scheduled to open on February 1 have been delayed to March 1. That may also be delayed again. But assuming it holds, a run to the border on March 1 for a visa stamp might not be a good idea given the stampede likely on that day. And the place will plug up because many will not have complied with proper procedures. Though there is no required minimum stay of 72 hours, a border run will not be a simple in and out u-turn with a fresh visa stamp. All the COVID rules apply as outlined on the Costa Rica Tourism Board site: https://www.visitcostarica.com/en/costa-rica/statement-costa-rica-tourism-board-covid-19 Best bets for refreshing visa stamps so you can drive: Flights out to Panama or Mexico or the U.S.

Canadians:
Canada has implemented overly draconian entry restrictions to the point that travel to there simply isn’t worth it before the end of April. The reason behind it is that last spring, there was a spike in COVID cases attributed to returning snowbirds and tourists from the Caribbean. These current entries or re-entry rules are designed to keep Canadians from leaving that country, given that their return will be so punitive. It will be a long winter. This will ease up by May 1. I mention this because some Canadian clients on tight budgets here in Costa Rica fear that they may not get back to see loved ones anytime soon in fear that these restrictions will hold throughout 2021. They will not.

Appointments for residency application submissions:
Pre COVID history regarding the Dactiloscopia (Fingerprinting Center) and the DGME (Immigration):

It used to be that we did not need to book appointments at either the Dactiloscopia (Fingerprinting Center) or the DGME (Immigration). It was a first-come, first-served situation at both venues, which allowed for same-day completion of procedures at each venue and done by 10 or 11 AM. Now appointments must be booked for both locations. This does not allow for same-day completion of both tasks. Applicants need to be as flexible as possible because this booking system and juggling client logistics and travel restrictions can get very complicated. Due to both these venues being closed most of 2020, there is still a backlog of applicants to be cleared who have been waiting since last March to have their application submitted. Most of those are now done.

Note: For those of you who wish to remain in Costa Rica but have just now begun your residency process or contemplating the same, be assured that in most cases, it is possible to obtain all required documentation while remaining in Costa Rica. And the cost of that added service is significantly less than you traveling back to do so yourself.

Vaccines:
A white-hot issue. All incendiary comments to follow below aside, there is still a 50/50 split between those who desperately want the vaccine and those who seek to avoid it. Many U.S. clients have returned to the U.S. to get access to the vaccines. Those who remain here or are contemplating a move here are just as evenly split in their concerns. The emailed questions I get are evenly divided between: When can I get my shot? – and – Will it be mandatory?

I will answer the last question first. As of this writing, it will NOT be mandatory. But the official mandate is to vaccinate the entire adult population of Costa Rica. https://twitter.com/CarlosAlvQ/status/1353734313590861826 For ex-pat residents and those waiting on approvals or in the process of applying, it is going to be a long wait here in Costa Rica before access to it. The following is the prioritizing. (Not far off what I predicted in a previous article.)

Staff and residents at retirement or nursing homes.
First responders, including health personnel.
Costa Rica’s older population, defined here as those ages 58 and up.
People with risk factors, including hypertension, diabetes, heart disease, respiratory illness, kidney disease, and obesity.
Teachers and other staff within the Education Ministry (MEP).
Imprisoned people and judicial staff.
Workers for the 911 service.
Health science students and related technicians in clinical fields.
People ages 40-57 without any of the above risk factors but whose work puts them in contact with others. This will include Laborers in agriculture, construction, service industries, etc.

For those who wait anxiously, I remind you that you’re in Costa Rica. It is a unique living environment with abundant, nutrient-rich foods grown in the richest soils on the planet. Take advantage of all that implies. Your immune systems will thank you for it. Costa Rica has always had a very robust vaccine program to protect our citizens. My family and I received them all. But the big piece contributing to Ticos being counted as some of the healthiest people on earth (with the most extraordinary longevity) is the traditional diet and outdoor lifestyle. Imitate that and get similar outcomes.

If you are in need of immigration assistance Laura can be reached by clicking here, Toll free at 1-833-733-6337, Locally at or by sending an email to [email protected]

How to Protect Your Assets Without Having a Corporation in Costa Rica

By Allan Garro – February 8, 2021

It has been a common practice for expatriates to buy real estate property and vehicles in Costa Rica and proceed by placing the title on a corporation created with the sole purpose of protecting said assets from possible liabilities, liens by creditors and other contingencies. Then these corporations do not generate any type of income and therefore maintain the status of inactive for tax purposes. At some point it was also a tool to avoid paying transfer taxes when selling a property, because instead of transferring the title, the shares were transferred.

Notwithstanding the foregoing, in recent times new regulations and obligations have been approved, causing owning an inactive corporation to be more expensive. Now it is necessary to pay an annual tax in the month of January, perform a stockholders report to the Central Bank during the month of April, and soon it will also be necessary to report on the amount of capital stock and the value of assets, as well as presenting annual tax returns, even when no tax is due. In addition, for about 7 years it has been mandatory to pay transfer tax when transferring more than 50% of the capital stock.

For all the above, some have decided to put the title of their property in their name instead of creating a corporation. Even so, the concern remains that the property may be prosecuted or encumbered by third parties when any type of personal liability arises. Something additional requiring being taken into account is what happens in the event of death, because it is very important to take precautions in order not to leave those loved ones with legal entanglements. In this article we mention a couple of little-known tools that may be helpful if certain conditions are met.

The first tool is called Patrimonio Familiar. Its main benefit is that real estate property with this type of lien cannot be pursued by creditors of any kind. For a property to have this benefit, it must meet the following requirements: 1. It must be a property used as a home for the owner and its family group. 2. The maximum size of the property is 1,000 square meters in urban areas, or 10,000 square meters in rural areas. 3. The affectation must be made by the owner in favor of the spouse, children or adults who have a disability or are over 65 years of age who are financially dependent on the owner.

To create the figure of Family Patrimony, it is necessary to appear in front of a Notary Public to request the preparation and subsequent registration of the document. Once registered, it will appear as a lien on the property title. The following should be noted: 1. The benefit does not apply to debts existing before the lien registration. 2. The benefit does not apply to the collection of debts with the local municipality for property taxes. 3. This type of lien does not replace a will or avoid having to initiate the Probate process in the event of the owner’s death.

The second tool is called Derecho de Usufructo or Usufruct Right. It can be used as rights of survivorship to guarantee succession of property to a loved one. To avoid probate some people just decide to transfer the property title to the chosen heirs while they are still alive. But that involves the risk that the beneficiaries will throw them out right away to use or sell the asset. But keeping the Usufruct Right, grants the right to live and enjoy the property for life, even though the title belongs to a different person. Basically, a donation of the property is made, but the right of usufruct for life is reserved.

Keeping the Usufruct Right grants that you will never be tossed out, not even in a tax foreclosure or any other type of legal action. The Tenancy Act even establishes that the Usufruct Right holder is the one legally authorized to even rent the property to a third party and receive the rent price over the title holder. When the usufruct right holder dies, the property title owner can request that the lien gets cancelled, being able to dispose of the property on any way, saving thousands of dollars on expenses and taxes for not having to go thru probate.

There are different ways to protect yourself and your assets in Costa Rica. Here you can see two that are rarely used but can be very effective and save headaches. In any case, when holding property in your name it might be a good idea to have some civil responsibility insurance policy and also a good insurance policy for your vehicle. Having a traffic accident can generate personal liability that can affect your other assets registered in your name

About the Author: Allan Garro was incorporated as a lawyer and public notary in 1996. He specializes in Litigation, Corporate, and Real Estate Law. He has also acted as an external legal consultant to Congress. He has been the author of more than 100 published English Language articles and can be reached at [email protected]

Costa Rica – Tax filing deadline for inactive companies changed again

Published Monday, February 1, 2021
Tax filing deadline for inactive companies changed again
By Garland M. Baker
Exclusive to A.M. Costa Rica
The deadline for inactive companies was March 15. The date has been moved to an undetermined future time. Tax returns will be due two and a half months after officials in La Dirección General de Tributación (the tax department known as the DGT) finally decide what they are going to do.
Expats are at their wits end. So are Ticos regarding all the indecisiveness. In six months the rules of the game have changed three times. At first, the form to file was the D-135. At the beginning of November that changed to the D-101, the same form active companies use. The understanding now is the new form they are working on will be named the D-101 Simplificado (that means simplified in English).
Really! Simple! None of all the news pertaining to the new tax regulations is straightforward. It’s all a bunch of gobbledygook. What is really going on?
Licenciada Xochilt Quezada, licentiate in public accounting, said in an interview “… people do not understand what they need to put on the required form. Most accounting professionals don’t either because what is recommended by the tax department is in direct non-compliance with generally accepted accounting principles and international financial reporting standards.”
In a nutshell, Costa Rica wants to the part of the OECD. That acronym stands for the Organization for Economic Cooperation and Development. There are 37 members, with Columbia being the last to join. The invitation to Costa Rica to be number 38 in on the table, but to get into the circle the country must adhere to some pretty strict rules. OECD’s members and partners represent 80% of world trade and investment.
For admission to the OECD, Costa Rica need to get its tax house in order. The country seems to be trying to cut corners to do so, but tax professionals are calling foul.
Believe it or not, only a few years ago the tax department had absolutely no clue as to how many inactive companies there really were. Only the Registro Nacional had the information but not the fiscal authorities. They still do not know what they have in them.
The Registro de Transparencia y Beneficiarios Finales, known as the RTBF filing requirement, was the beginning of Costa Rica trying to get organized. Last year all companies needed to register their beneficial owners of all legal entities at the Banco Central on an RTBF form.
The DGT wants to link the information from the inactive tax returns, to the Registro Nacional. They will then cross-reference that information with the Banco Central to find who has what and how much it is worth.
The “how much it is worth” part is the problem. The tax people say they want the price of acquisition of assets on the tax return with no adjustments. Usually, to calculate the basis of an asset one takes the original investment, adds improvements, and subtracts allowable depreciation, casualty and theft losses.  Generally accepted accounting principles and international financial reporting standards both recommend currency adjustments as well among with other guidelines.
Many expats do not have a clue what they paid for their property because they came to Costa Rica years ago and have not kept good paperwork. Usually, the notary registering the deed of sale in the past used a fictitious amount to avoid taxes. Here is an example:
Bob and Alice came to Costa Rican in their 50s, around 20 years ago. They found a wonderful place on the beach, paid $100,000 for it, and put the property in a company called Paradise S.A. To save them money, Carlos, the notary for the transaction, put $10,000 on the transfer deed, so Bob and Alice would have to pay less transfer taxes at the closing and less property taxes each year. What is registered at the Registro Nacional is $10,000 still today.
The question is: What should they put on their tax form for Paradise S.A.? The legal paperwork states $10,000, but they have wire transfers for $100,000.
Why is this important? Capital gains!
Bob and Alice are in their 70s now and went back to the United States for better medical care. The property in Paradise S.A. is no longer their primary residence thus subject to Costa Rica’s new capital gains rules.
If they sell the place here for $100,000  — what they paid for it — will they need to pay tax on the $90,000 because their attorney lied on the initial deed?
Will they be legally liable because they signed incorrect paperwork?
All good questions. There are no definitive answers yet. Legal and accounting professionals are just guessing. Their opinions on the matter are all over the place.
There are an estimated 200,000 inactive registered companies that need to file the new required tax return. The fine for not filing the D-101 Simplificado — or whatever it is called in the end — is one-half of one Costa Rican basic salary or 225,100 colons (around $375 at today exchange rate). The statutes of limitations to question tax returns is four years, and 10 years for legal discrepancies.
What should expats do now?
Start getting their paperwork together, so they can work with an accounting professional to file the tax return correctly.
Keep reading to stay on top of the current events. This author is researching these Costa Rica’s tax matters that affect expats and Ticos alike. He will continue to do so until there is some clarity regarding the matters at hand.