Costa Rica

What are the pathways to residency?

Three categories cover the vast majority of situations. The *inversionista* (investor) category is based on investments in real estate, shares in Costa Rican companies, or projects related to tourism, renewable energy, or reforestation. A 2021 law temporarily lowered the entry threshold; this measure expired in the summer of 2026, so the required amount must be verified at the time of application rather than relying on older documentation (Dirección General de Migración y Extranjería). The *rentista* category is for those who can prove certified passive income of at least $2,500 per month over a two-year period, usually demonstrated via bank deposits. The *pensionado* category targets holders of a guaranteed pension of at least $1,000 per month and is the least expensive option. All three statuses grant temporary residency, followed by permanent residency after three years, with citizenship becoming a possibility after seven years.

What is the actual cost of settling there?

The item most often omitted in presentations is enrollment in the public social security system, which is mandatory for all residents. Contributions are calculated based on declared income—using a percentage that varies according to one's status—and represent a recurring expense that must be factored into the budget from the start. In return, this grants access to the public healthcare system; while the quality is decent, wait times often lead residents to also purchase private insurance, which is itself affordable by North American standards. Added to this are the cost of living—moderate inland but significantly higher in popular coastal areas—and steep import duties on vehicles and electronics.

Is actual residence in Costa Rica required?

Yes, and in two distinct respects. Maintaining temporary resident status requires actual physical presence in the country—verified at the time of renewal—and eligibility for permanent residency after three years also depends on this. From a tax perspective, Costa Rica’s territorial tax system is only advantageous if you have genuinely ceased to be a tax resident of your home country—a matter determined entirely elsewhere. A French national who maintains their family, a home, and business activities in France remains a French tax resident, regardless of their Costa Rican residency card (*cédula*). The geographical distance actually makes it easier to demonstrate this shift compared to a move within Europe, provided the relocation is genuine and well-documented from the very first year.

Can you start a business in Costa Rica?

Yes, though the approach differs depending on the strategy. Developing a business geared toward the local market requires a Costa Rican corporate structure and entails taxation of locally sourced profits based on a scale with a high top marginal rate, albeit with reduced rates for smaller entities. Operating a business serving foreign clients requires a more nuanced analysis: while the territorial tax system protects foreign-sourced income, services conceived and physically performed from within Costa Rica may be deemed locally sourced. This classification should be assessed with a Costa Rican advisor rather than assumed. Furthermore, the investor visa requirements can be met through a business project in designated sectors, allowing you to combine obtaining residency status with developing a business.

What French factors impact a Costa Rican venture?

Costa Rica lies outside the European Union, necessitating careful planning regarding the deferral of the "exit tax" if you hold equity stakes exceeding certain thresholds. For retirement-related projects—which account for a significant number of cases involving Costa Rica—the key issue lies in classifying each pension under the applicable tax treaty; the distinction between public and private sources determines which country has the right to tax the income. Your French real estate income will remain taxable in France under the non-resident tax regime, and your French real estate assets will remain subject to the real estate wealth tax. These figures should be calculated prior to your departure, as they can substantially alter the expected financial outcome.

Does Costa Rica have a tax treaty with France?

The country is not among France’s treaty partners regarding income tax (see the list of tax treaties concluded by France). The implications of this must be understood: no treaty-based tie-breaker rules will resolve issues of dual residence, and no treaty-based tax credit will be available to offset French taxation on income sourced in France. Furthermore, Costa Rica does not appear on the French list of non-cooperative states and territories (Order of April 15...