When Costa Rica passed Law 9996 to attract investors and retirees, they didn’t just lower the financial barrier to entry; they created one of the most aggressive tax incentive programs in Latin America. I have clients who were planning to move to Mexico or Portugal, and they pivoted their entire strategy to Guanacaste strictly because of the financial mechanics of this law.

Many people mistakenly believe that residency is just about avoiding the hassle of a “border run” every 180 days. While convenience is nice, the real value of the Investor Visa under Law 9996 is measured in tens of thousands of dollars of retained capital.

If you are considering a Costa Rica relocation, understanding these tax benefits is critical.

The Reality Check: Law 9996 (Ley para Atracción de Inversionistas) lowered the real estate investment threshold from $200,000 to $150,000 to qualify for the Investor Residency. More importantly, it grants approved residents the right to import two personal vehicles and their entire household goods completely free of standard import taxes, which typically run between 50% to 70%.

The $150k Threshold Change

The core of the law was dropping the minimum investment requirement. To qualify, you must invest $150,000 USD in registered Costa Rican real estate (this can be a home, a condo, or even raw land, provided the registered value meets the threshold).

You don’t have to start a business or hire employees. By simply purchasing your vacation home or retirement property, you unlock the door to the residency program.

The Golden Ticket: Tax-Free Vehicle and Household Imports

This is where the math gets incredible. Costa Rica protects its economy by levying massive import taxes on vehicles. If you try to ship a $50,000 SUV from the US to Costa Rica as a tourist, you could easily pay an additional $25,000 to $35,000 in import duties just to get it out of customs.

Under Law 9996, approved investors are granted a one-time exemption to import up to two land, air, or maritime vehicles for personal use without paying these duties.

Additionally, you can import all of your household goods—furniture, appliances, electronics—completely tax-free. If you are furnishing a new luxury home in Tamarindo, filling a shipping container in Miami and importing it under this exemption will save you a fortune compared to buying heavily taxed goods locally.

Income Tax Exemptions on Foreign Earnings

If you are looking to retire in Costa Rica or run a remote business, you need to understand territorial taxation. Costa Rica only taxes income generated within its borders.

Under the specific provisions clarified with Law 9996, the government explicitly guarantees that your foreign-sourced income (such as US social security, pensions, dividends, or profits from a US LLC) will not be taxed in Costa Rica, even if you are a full-time resident.

The Bottom Line

Law 9996 created a window of opportunity that is almost too good to ignore. Governments frequently change immigration laws based on political pressure, and there is no guarantee these aggressive tax incentives will last forever.

If you want to leverage Law 9996 to make your move to Guanacaste incredibly tax-efficient, let’s talk. We can find the right $150k+ asset to trigger these benefits.

📩 josh@kraincostarica.com

Frequently Asked Questions

What is Law 9996 in Costa Rica?
Law 9996 is legislation designed to attract foreign investors, rentistas, and retirees to Costa Rica by lowering the investment threshold for residency to $150,000 and offering massive tax exemptions on the importation of vehicles and household goods.

Can I import my car to Costa Rica tax-free?
Yes, but only if you are approved for residency under the Investor, Retiree (Pensionado), or Rentista categories covered by Law 9996. Tourists must pay the standard, high import duties.

Do expats pay income tax in Costa Rica?
Expats only pay Costa Rican income tax on money earned within Costa Rica (like rental income from a local property or a local salary). Foreign pensions, investments, and remote work income generated outside of Costa Rica are completely tax-exempt.