Costa Rica: a gateway for investors and new residents
Costa Rica has consolidated its reputation as one of the most attractive countries in Latin America to invest and live in. With democratic stability, strong legal security, and a privileged natural environment, more and more foreigners are seeking to make this country their home. One of the most direct ways to achieve this is through residency as an investor, where the purchase of real estate plays a leading role.
The legal foundation: Law No. 9996 and its regulations
The legal framework governing this immigration category is Law No. 9996 “Law for the Attraction of Investors, Rentiers, and Pensioners,” enacted in July 2021. This law reduced the minimum required investment from US$200,000 to US$150,000 in order to encourage foreign capital inflows into different sectors of the national economy.
The details were established in the Regulations to Law 9996, published through Executive Decree No. 43926-MGP-H-TUR in February 2023. These regulations not only clarified the scope of tax incentives but also made it unequivocally clear that, when it comes to real estate or registrable assets, they must be registered directly under the name of the individual applicant.
In other words, if you purchase property through a corporation, a trust, or any other legal structure, that investment will not qualify as the basis for applying for investor residency. The General Directorate of Immigration requires a direct and personal link between the investment and the applicant.
What does this mean in practice?
If a foreigner acquires a house, apartment, farm, or any type of real estate in Costa Rica, the title must be registered in the National Property Registry directly under their personal name. This is the only way for the property to be considered a “qualified investment” for residency purposes.
In the case of investments through trusts, the regulations establish that only the trustor (the individual who contributes the capital to the trust) may apply under the investor category. However, if the property is registered in the name of the trustee company, it will not be valid for immigration purposes.
Migration and tax benefits
Obtaining investor residency is not limited to acquiring legal status. Law 9996 also grants tangible benefits that make the transition to life in Costa Rica easier:
- Exemption from import taxes, tariffs, and VAT on household goods (one-time, or again in the event of damage or loss due to accident).
- Full exemption on the importation of up to two vehicles (air, land, or maritime).
- A 20% reduction on the transfer tax of real estate purchased during the validity of the investor residency status.
- These benefits apply for five years from approval, provided the investment is maintained for a minimum of ten years.
These incentives make the investor category one of the most comprehensive in terms of tax and immigration benefits in the region.
Key documentation
To apply for investor residency through the purchase of real estate, the following are required:
- A public deed of sale registered in the National Registry, confirming that the property is in the applicant’s name.
- An updated registry and cadastral certification.
- A statement from a certified public accountant (CPA) confirming the value of the investment, proving that it exceeds US$150,000.
- Apostilled personal documents: birth certificate, criminal record, and passport copy.
- Passport-sized photographs and the official residency application form filed with the General Directorate of Immigration.
The process can take between six months and one year, depending on Immigration’s workload and the accuracy of the documentation submitted.
Important restrictions
Although investor residency provides multiple benefits, there is one significant limitation: the holder of this immigration category, as well as their dependents, may not engage in paid employment in Costa Rica. This status is designed for investors, not salaried workers.
However, they may manage their investments, create projects, and receive rents or dividends. Furthermore, after three years of continuous temporary residency, they may apply for permanent residency, which removes these restrictions.
Path to permanence and citizenship
The investor status is granted for two years and may be renewed as long as the investment remains valid. After three years under this category, the applicant may apply for permanent residency. In the long term, after seven years (or five in certain cases, depending on nationality), the applicant may initiate naturalization procedures to become a Costa Rican citizen.
Purchasing real estate in Costa Rica not only represents a patrimonial investment in a stable and attractive country, but also serves as the key to unlocking legal residency, tax incentives, and a pathway to permanent settlement.
The fundamental requirement is straightforward yet decisive: the property must be registered directly under your personal name. This is the sine qua non condition demanded by Immigration to validate your investment.
At Magma Legal, we guide our clients through the entire process: from conducting due diligence to ensure the property is free of encumbrances, to the formalization of the deed and the filing of the immigration application. Our commitment is to ensure your investment is secure and that your transition to life in Costa Rica happens with full legal certainty and without unnecessary complications.