According to the US State Department, around 50,000 Americans currently live in Costa Rica. Some came as digital nomads or expats, while others arrived as retirees to enjoy this tropical paradise. Do you too want to be one of these lucky people?
If so, keep reading as you will learn all the ins and outs of living in Costa Rica as an American.
US citizens living in Costa Rica
Costa Rica is a favorite among Americans for moving abroad, whether they’re digital nomads, remote workers or retirees. The major reasons they relocate here are:
- Proximity to the US
- Safety and stability
- Affordable cost of living
- Good healthcare
- English proficiency of locals
- Good infrastructure
- Convenient time zone
- Warm climate and beaches
According to the World Economic Forum, Costa Rica is one of the world’s happiest countries. This is due to its beautiful beaches, picturesque rainforests, a stable democracy and an educated population.
Furthermore, the Costa Rica tourist scene is extremely well-developed. The country has been welcoming retirees and other expats for over 30 years. In fact, Costa Rica is one of the best countries at offering low costs for a high quality of living. And over time, the government has built an excellent infrastructure and environment for tourists and expats.
Lastly, Costa Rica has newly implemented a digital nomad visa that allows you to stay in the country for up to 12 months! Hence, it will become even more attractive for inspired digital nomads and remote workers everywhere.
Moving to Costa Rica from the US
Here are some logistics you should know before taking the leap of relocating to Costa Rica.
- Residence permit.
You’ll first need to consider your residence permit options for Costa Rica if you are planning to stay there long-term. To receive one, you must provide proof of the required income amount, or make a substantial deposit to a Costa Rican bank.
- Shipping options.
Make a plan well in advance for transporting your items. For example, will airplane baggage be enough to take everything you need with you? Also, Americans often ship their cars to Costa Rica. That might be something to consider too.
Finding accommodation in Costa Rica can be both easy and difficult for expats. It’s easy because all foreigners have the same rights as local residents when it comes to renting or buying a house. The difficult part is the competition with other expats for securing an accommodation.
Despite that last hurdle, there are plenty of housing options in Costa Rica, from high-end luxury villas to typical local houses. It’s best to determine your budget and start your search early, especially if you want to purchase property. Generally speaking, the average amount for rent is below $1,000 per month, and most properties for purchase start at around $100,000.
- Banks and taxes.
You must choose a Costa Rican bank for opening an account based on your financial needs. So look at different banking options and which ones make you comfortable.
When to move to Costa Rica?
The best time to go to Costa Rica is from mid-December to April (the dry season). This is also the peak season for tourists. The dry season however, is the most popular and expensive time to visit.
Working remotely from Costa Rica
Whether you plan to work as a freelancer, a business owner, or work for a foreign company, you can do all of this while living in Costa Rica. In fact, you can even work from the country as a tourist. US citizens can stay for up to 90 days in Costa Rica visa-free.
Expats can also continue working their remote jobs after receiving a residence permit in Costa Rica. As an added bonus, all of your foreign income is tax-free.
Working for a US company from Costa Rica
You can also work for a US company while living in Costa Rica, and the country’s digital nomad visa was conceptualized for this reason.
By holding the digital nomad visa, which remote workers are eligible for, you will avoid paying taxes in Costa Rica. However, you will continue to pay your taxes in the US.
Furthermore, expats who work for foreign companies don’t need a work permit in Costa Rica as long as their payments come from abroad.
Make sure you establish a proper agreement with your employer about working remotely from Costa Rica, as some companies might not authorize working from abroad.
Your employer shouldn’t be too concerned however if you gain a digital nomad visa for Costa Rica. That’s because the payroll structure remains the same, and you should receive a paycheck deposited into your US bank account with US tax withholdings. This will prevent any problems for yourself, as well as your employer.
Working in Costa Rica
If you are thinking about getting a job on Costa Rican soil, unfortunately there is some bad news. US citizens, as well as other foreign citizens, can’t legally work in Costa Rica unless they are permanent residents or have a work permit.
Most people who relocate to Costa Rica don’t rely on the local economy, hence they have substantial money in the bank, a pension, or some other steady income from outside.
Furthermore, Costa Rica places great emphasis on hiring local residents before foreigners. Unless there is no Costa Rican candidate for a position one pursues, getting a job in a local company is difficult. Nevertheless, many expats manage to find work at call centers, language schools, resorts, tour operations and even multinational corporations.
In general, foreigners must either be residents or have a valid permit in order to work in Costa Rica. The onus is on the employer to request and obtain work permits. They are also expected to pay all fees and handle all paperwork requirements.
That being said, working in this Central American country isn’t impossible. How? Consider becoming self-employed.
Open a business in Costa Rica
Opening a business is a major way some expats earn a living in Costa Rica without obtaining a work visa. This can be a viable option if you have significant capital.
Foreigners are permitted to own businesses in Costa Rica as long as they hire locals to work in their enterprises instead performing work themselves.
Despite this fact, it’s common for foreign owners to do most of the work and hire just a few locals for government checks. It’s particularly frequent among small businesses related to the travel industry, such as small hotels or cafes. But doing this can put you at a large risk of being deported if you get caught.
Paying taxes in Costa Rica
Paying taxes is another aspect of living in Costa Rica. If you obtain a digital nomad visa, you don’t have to worry about taxation at all.
Also, when making a living online, either as an employee or as a self-employed individual, you don’t need to worry about taxes. Only expats working on the ground in Costa Rica, whether it’s for local companies or working for themselves as business owners, will need to pay income taxes.
Generally speaking, you can make up to $1,460 in personal, monthly, tax-free income generated from wages or business activity.
From $1,460 to $2,144, personal income is set at 10%. The tax rate climbs to 15% from $2,145 to $3,761, and then to 20% from $3,762 to $7,521. Anything over $7,522 is subject to the highest rate, 25%.
Residency options in Costa Rica
As a US citizen, you can stay in Costa Rica for up to 90 days on a temporary tourist visa. Just keep in mind that extending your stay beyond the authorized 90 days as a tourist is time-consuming.
Extensions within the country can be handled by migration offices. Requirements for extensions often change, so apply several days before the expiry of the current visa.
If you’re thinking about settling down in Costa Rica long term, you need to consider the available resident permit options. You can actually apply for temporary residence first, and after three years with it, you can obtain permanent residency.
‘Border runs’ are when you leave a country and then return in order to reset the number of days you’ve spent in the country. With Costa Rica, you can leave for 72 hours via land and then re-enter. In this case, you will be granted another 90 days to spend in Costa Rica. After reentering, you will get a new visa stamp with a new end date.
Pensionado (Pension visa)
This type of residency is suitable for retired expats who receive a certain amount in pension funds every month. Pensionado requires newcomers to prove a pension of at least $1,000 a month.
Rentista (Resident Visa)
The rentista program is perfect for expats who have substantial savings. They must prove having savings of 1,414,900 CRC ($2,500 USD) per month, and for a period of two years. Proof of a $60,000 deposit into a Costa Rican bank will work as well.
The money must come from unearned income such as savings, investments or real estate property. After proving the required amount, you will be able to take up freelance or remote work for foreign companies.
Temporary vs. permanent residency
Costa Rican residence permits are divided into temporary and permanent. One can only acquire a permanent residence permit by having a temporary residency for three years prior to that.
Permanent residency has benefits comparable with citizenship. You have all the rights of a citizen, except for voting, and you can legally work in Costa Rica.
Temporary residents can also own and run a business, but they must employ others to perform any labor. Both temporary and permanent residents must pay into the Costa Rica health care system called the Caja.
Costa Rica digital nomad visa
In addition to the already established residence permits, Costa Rica has implemented a digital nomad visa. The new law regarding this visa officially took effect on September 1st, 2021, allowing digital nomads to stay for up to 12 months in Costa Rica.
People from the following professional categories can apply for a digital nomad visa:
- Online business owners
- Remote workers
Applicants will need to prove their income from foreign sources. After the digital nomad visa expires, you can extend it for one additional year. Furthermore, digital nomads can bring their families along to live and work in Costa Rica for at least a year.
With this visa, you can carry out job duties via telecommuting or remote working from Costa Rica for another foreign country.
Requirements for the Costa Rica digital nomad visa
The main requirement is to have a salary or a stable income from abroad.
Therefore, an individual must prove that they have been receiving:
- a regular and stable salary, or have a fixed income
- an average monthly income in the past year of at least $3,000 USD ($4,000 for a family), or the equivalent amount in another currency
- private medical insurance for the entire duration of the stay in Costa Rica
Can a US citizen live permanently in Costa Rica?
Citizens of any country can become permanent residents in Costa Rica. In order to do this, they need to possess a temporary resident permit for at least three years. However, a first-degree relative to a Costa Rican can receive permanent residency faster.
Similar to the temporary residence visa, you must apply for permanent residency through the Department of Immigration.
Is Costa Rica safe for American expats?
Costa Rica is the safest Central American country. In fact, it ranks at 32 on the 2020 Global Peace Index’s ranking of 163 countries when it comes to overall level of ‘peace.’
Furthermore, Costa Rica is one of the most stable Latin American countries. With tourism contributing majorly to the country’s GDP, the government is focused on making the country accessible and comfortable for tourists.
Nevertheless, crime has been steadily on the rise, including violent crime that is mainly gang-related. That doesn’t have a major impact on expats and visitors though.
The Best places to live as a US citizen in Costa Rica
Tamarindo lies on the Pacific coast and is one of the best beach towns that you can find in Costa Rica.
Despite being small, Tamarindo has about 80 restaurants and a few other entertainment options. Furthermore, it’s one of the safest places in Latin America.
Everyone can find something for themselves in Tamarindo, from peaceful beaches to buzzing nightlife. Keep in mind however that it’s the most expensive city in Costa Rica and is comparable to some American cities in price.
Central Valley is a large piece of land in Costa Rica (more than a fifth), and it includes the capital San Jose.
Central Valley is a favorite amongst locals, which is why it is densely populated. In fact, about two-thirds of all people in Costa Rica are living in this area.
But living in the capital brings many benefits, such as:
- art galleries
- big-box store
- main airport
Furthermore, in Central Valley, you are just one hour away from the beach.
Here are other great places to live as an American expat in Costa Rica:
- Playas del Coco
- Lake Arenal
How much money do you need to live comfortably in Costa Rica?
The cost of living in Costa Rica is relatively cheap compared to the cost of living in the USA. Most expats in Costa Rica can live comfortably on $1,500 – $2,000 per month.
Overall, prices in Costa Rica are 26.6% lower than in the United States. Moreover, rent prices in Costa Rica are 60% lower compared to the US.
However, with the growing number of expats and digital nomads, the cost of living in Costa Rica has increased over the past decade. Nonetheless, for someone who is earning money abroad or has adequate savings, this won’t be too noticeable on the wallet.
For example, a monthly income of $1,500 to $2,500 will allow you to pay for a two or three-bedroom rental, eat out a couple of times a week, and splurge on something special once in a while.
Housing contributes to the most significant part of your monthly budget. According to Numbeo, the average rent per month for a one-bedroom apartment is $475 inside of a city center, and $384 outside of a city center.
Overall, rentals in Costa Rica start as low as $300 per month, and can go up to several thousands of dollars. Areas near the beach and in touristy areas cost the most. The cheapest houses can be found in the mountains and rural regions.
Furthermore, touristy towns can be exponentially more expensive than some of the smaller, local towns. Thus, opt for less touristy, but expat-friendly locations to save on unnecessary expenses.
Prices of groceries are comparable to North America, but fresh produce is very affordable at farmers’ markets.
Restaurants, except those serving local Costa Rican food, are about the same as North America.
Here are some total estimates for the cost of living for expats and digital nomads in Costa Rica:
|Rent (a furnished, two-bedroom vs. one bedroom apartment)
|$800 / $450
|Electricity (varies depending on A/C usage)
|Healthcare (four $50 visits to a doctor per year for two people + monthly Caja payment)
|Transportation (fuel/maintenance costs of owning a car)
|Food/groceries (including alcohol)
|Entertainment (dining out eight times a month, movies, concerts, etc)
|Miscellaneous (unexpected expenses)
|The monthly total for a couple:
|The monthly total for one person:
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