This article is written by Ivo Henfling specializing in real estate in Costa Rica.
For many years, Costa Rica was a tax haven, just like Panama and some of the Caribbean Islands. Money laundering laws have tremendously changed the fact that expats do not move to Costa Rica to hide their fortunes but for other reasons. If you plan to purchase a vacation home or your retirement home in Costa Rica, you better make sure your funds are legitimate.
Is Costa Rica an offshore tax haven for Expats?
Costa Rica, paradise on earth, is a country many still dream about moving to. Costa Rica is tropical country located in Central America between Panama and Nicaragua and is not that place you read about in novels, where you can hide yourself and your money. The local authorities make it difficult to launder US capital by creating some simple rules:
- You have to be a legal resident to be able to open a bank account
- Obligation to show a paper trail for any amount over $10,000 into your bank account
- Notary Public’s escrow accounts are monitored by SUGEF (Local SEC)
- US residents have to disclose if they own Costa Rica real estate, stock in a corporation or a bank account to the IRS
Nevertheless, as a US citizen living in Costa Rica you do NOT have to pay any income tax or capital gain tax in Costa Rica and you will only have to comply with your US tax obligations.
Costa Rica is the perfect country to purchase Costa Rica real estate because the country has everything to offer you would enjoy in a tropical country. The advantages for a foreign resident to purchase a vacation home or your retirement home in Costa Rica are
- On International Living top 10 for best places to live or retire to.
- A real democracy with many political parties
- A very stable economy
- NO army and the funds are spent on education
- A large part of the habitants are bilingual
- The quality lifestyle you have been used to all your life
- Perfect weather with many micro climates to choose from
- #3 world ranking for Environmental Performance by Yale University 2010 (1st in Latin America)
- Atenas is on AARP top 10 for best places to retire abroad
- # 29 world ranking for Press Freedom by Reporters without Borders 2010 (1st in Latin America)
- # 31 world ranking for Global Peace by Institute for Economics & Peace 2011
- # 49 world ranking for Economic Freedom by the Heritage Foundation and The Wall Street Journal 2011
- Highest score on happy life years by the Happy Planet
- Has become an important destination for cosmetic surgery and dentistry.
We invite you to visit us in Costa Rica if you are looking to purchase a vacation home in a tropical country or planning to retire soon. Follow Ivo’s weekly blog at GoDutch Realty to find some new and really useful tidbits about Costa Rica real estate and Costa Rican life there every week.