Foreign Investment
Simplified immigration and customs procedures for foreign investors
The government has announced that, by regulating Law N9996 it will simplify the immigration and customs procedures for foreign investors who meet certain criteria. These criteria include being classified as a rentier resident, pensioner resident, or investor, and having an investment of at least $150,000.
The simplified procedures include the establishment of preferential service windows for applications, and the ability of immigration authorities to consult public databases to verify investment information and other requirements.
This is a welcome development for foreign investors, as it will make it easier and faster for them to enter and stay in the country. It is also a sign that the government is committed to attracting foreign investment.
Here is a more detailed breakdown of the simplified procedures:
- Preferential service windows: There will be dedicated service windows at immigration offices for foreign investors who meet the criteria. This will allow them to get through the application process more quickly.
- Public database consultation: Immigration authorities will be able to consult public databases to verify investment information and other requirements. This will help to speed up the process and reduce the amount of paperwork required.
Nearshoring: Costa Rica’s strength against global layoffs
Costa Rica is well-positioned to benefit from the global trend of nearshoring, which is the practice of moving business processes to countries that are close to the target market. This is because Costa Rica has a highly skilled workforce, a stable political environment, and a favorable tax regime. In recent years, there have been a number of high-profile multinational layoffs, particularly in the
technology sector. This has led to concerns about the impact on Costa Rica’s economy. However, nearshoring could help to mitigate these effects.
Nearshoring can provide a number of advantages for businesses, including lower labor costs, shorter delivery times, and better cultural understanding. This is why many businesses are considering nearshoring their operations to Costa Rica.
The Central Bank of Costa Rica and the Costa Rican Coalition for Development Initiatives (CINDE) have both identified nearshoring as a key factor in reducing the impacts of multinational layoffs and investment cuts in the country.
In addition to nearshoring, the dynamism of the service sector is another factor that could help Costa Rica weather the storm of global layoffs. The service sector is already a major contributor to the Costa Rican economy, and it is expected to continue to grow in the years to come.
Overall, Costa Rica is well-positioned to benefit from the global trend of nearshoring. This could help to mitigate the effects of multinational layoffs and investment cuts, and it could also boost the country’s economy.
International Trade
MLI Costa Rica and Spain
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI) has come into effect between Costa Rica and Spain, starting January 1st, 2023. This means that there have been certain modifications and clarifications made to the Double Taxation Avoidance Agreement (DTA) between the two countries.
The MLI is an international treaty that aims to prevent tax avoidance and evasion. It does this by introducing measures, such as the following:
- Preventing treaty shopping: This means preventing companies from using the DTA to avoid paying taxes in their home country.
- Resolving conflicts of interpretation: This means clarifying the meaning of certain provisions in the DTA to prevent disputes between the two countries.
- Addressing base erosion and profit shifting (BEPS): This means preventing companies from shifting profits to low-tax jurisdictions to avoid paying taxes.
