From big cities to beaches, volcanoes, and tropical rainforests, Costa Rica has a little bit of everything. For those looking to improve their Spanish, live well at a lower cost, or surf to their heart’s content, there’s even more reason to move to Costa Rica. And thanks to the country’s digital nomad visa, living there is more accessible than ever for US expats.
Read on to learn how to qualify for Costa Rica’s digital nomad visa, where the expat community in Costa Rica can be found, and what life in Costa Rica is like.
Digital Nomad Visa in Costa Rica – Background
When digital nomadism exploded in the wake of the COVID-19 pandemic and subsequent remote-work revolution, countries — especially those looking to make up for years of below-average tourism — rushed to court them. Costa Rica was one such country, initially announcing their plans to launch a digital nomad visa in October 2021. They officially greenlighted it in July 2022.
Costa Rica language & Costa Rica currency
Costa Rica’s official language is Spanish, while the official currency is the Costa Rican Colón (CRC). One US dollar is equal to about 540 Costa Rican Colones.
How to become a digital nomad in Costa Rica
So, what exactly does it take to become a digital nomad in Costa Rica? Here’s what you need to know.
Read More: How To Become A Digital Nomad In 2023
Apply for the Costa Rica Digital Nomad Visa – Eligibility
To qualify for the Costa Rican digital nomad visa, you must, above all, work remotely for a non-Costa Rican company or non-Costa Rican clients.
Visa requirements & duration
Costa Rica’s digital nomad visa application involves:
- Registering and filling out the required digital nomad visa application forms on Costa Rica’s immigration website
- Submitting the required documents (note: any documents not in Spanish must be accompanied by a translated version)
- A copy of the first and last pages of a valid passport
- Bank statements showing that you make at least $3,000 per month (or $4,000 per month if you plan on bringing your family)
- Proof of health insurance that covers you (and anyone accompanying you) for the duration of your stay
- Pay the $100 fee to process the application; later, you will receive a $90 fee to certify your legal stay documents and an additional fee upon approval of your application
- Documents for accompanying family members such as a marriage/civil union certificate, birth certificate, etc.
- Additional documents as requested
Applications for the Costa Rica Digital Nomad Visa can be submitted online or in person after booking an appointment. If you have any elements missing from your application, you will be notified within eight days. Within 15 days of submitting a complete application, you will receive a decision via email.
If your visa is approved, you’ll need to apply for a residency permit within three months of your application’s approval. Note that the digital nomad visa lasts for one year and can be renewed for an additional year.
Health Insurance for Digital Nomads in Costa Rica
There are a few health insurance companies that specifically offer coverage for digital nomads, including SafetyWing, World Nomads, AIG Travel Guard, Allianz, and IMG Global, among others.
Read More: Digital Nomad Taxes: Why 2023 Is The Year To Move Abroad
Expats in Costa Rica: best places to live
There are many great places to live in Costa Rica, but the five below are some of the best cities in Costa Rica for US expats.
This lively capital city is chock-full of culture, with great museums, parks, restaurants, theaters, and much more.
How much does it cost to live in San José?
According to Numbeo, these are the average prices for common expenses in San José:
Monthly rent: 364,375.23 ₡ (~$675.09) for a one-bedroom apartment in the center
Utility bills: 33,194.53 ₡ (~$61.50)
Meal for 2: 30,000.00 ₡ (~$55.58) at a mid-range restaurant
A world-famous surfing hotspot, this charming destination is popular among tourists (without being too touristy) and US expats alike.
How much does it cost to live in Tamarindo?
According to Numbeo, these are the average prices for common expenses in Tamarindo:
Monthly rent: 712,192.14 ₡ (~$1,319.50) for a one-bedroom apartment in the center
Utility bills: 45,465.03 ₡ (~$84.23)
Meal for 2: 35,000 ₡ (~$64.85) at a mid-range restaurant
Puerto Viejo de Talamanca
This small town located on the Caribbean coast is known for its white-sand beaches, laid-back pace of living, and funky vibe.
How much does it cost to live in Puerto Viejo de Talamanca?
According to Numbeo, these are the average prices for common expenses in Puerto Viejo de Talamanca:
Monthly rent: 350,000 ₡ (~$648.46) for a one-bedroom apartment in the center
Utility bills: 39,116.20 ₡ (~$72.47)
Meal for 2: 32,500 ₡ (~$60.21) at a mid-range restaurant
Playa Samara is another beach town that’s world-renowned as a surfing destination and has a thriving yogi and wellness community.
How much does it cost to live in Playa Samara?
According to Numbeo, these are the average prices for common expenses in Playa Samara:
Monthly rent: 669,562.53 ₡ (~$1,240.52) for a one-bedroom apartment in the center
Utility bills: 40,530.88 ₡ (~$75.09)
Meal for 2: 30,000.00 ₡ (~$55.58) at a mid-range restaurant
Jacó is known just as much for its lovely beaches as it is for its bustling nightlife. If you like to surf all day and party all night, Jacó is the place for you.
How much does it cost to live in Jacó?
According to Numbeo, these are the average prices for common expenses in Jacó:
Monthly rent: 274,765.64 ₡ (~$509.07) for a one-bedroom apartment in the center
Utility bills: 31,920.32 ₡ (~$59.14)
Meal for 2: 21,616.47 ₡ (~$40.05) at a mid-range restaurant
Digital nomad life in Costa Rica
What to do in Costa Rica
There’s no shortage of exciting things to do and places to explore in Costa Rica. A few ideas to get you started:
- Surf or soak up rays at a beach along the Pacific coast
- Check out the museums in San José (e.g. National Museum of Costa Rica, Jade Museum)
- Visit national parks (e.g. Manuel Antonio, Cahuita)
- Bathe in natural hot springs (e.g. Tabacón, Río Negro)
- Explore volcanoes (e.g. Arenal, Poas)
- Hike a trail with a waterfall
- Explore the cloud forest of Monteverde
- Visit a wildlife sanctuary for an up-close encounter with the local fauna
- Explore popular neighborhoods in San José (e.g. Barrio Escalante, La California, Barrio Amón)
- Take yoga classes or attend a yoga retreat
- Go whitewater rafting
- Scuba dive or snorkel
- Visit a coffee plantation
Expat community in Costa Rica: how to find your people
Making friends in a new country might seem difficult, but all it takes is a little proactivity and time. Some ideas you might want to consider:
- Stay at a hostel or co-living space
- Work out of a co-working space
- Use language exchange apps or websites to practice Spanish and meet locals
- Check out Facebook groups for US expats in Costa Rica
- Meet people through Couchsurfing hangouts, Meetup events, or Bumble BFF dates
- Volunteer in your local community
- Chat up folks you meet at bars, concerts, and other popular sites
- Join a game of pick-up soccer
Moving to Costa Rica
To start your new life chapter out on the right foot, you’ll want to be prepared — so before you leave the States, make sure that you:
- Have all of your official documents ready to go (e.g. passport, visa, plane tickets)
- Book your plane tickets and temporary accommodations
- Bring a three-month supply of any medications you regularly take and a copy of your medical records
- Create a packing list and research shipping services if needed
- Sell or donate unwanted possessions and cancel any services or subscriptions you won’t need any more
- Notify your bank and credit card company of your move so purchases abroad aren’t flagged as suspicious
- Set up a forwarding address for mail
- Research options for Costa Rican banks and cell phone plans
- Find other US expats living in Costa Rica through online groups and ask them for advice
Costa Rica taxes for digital nomads
One of the best perks of Costa Rica’s digital nomad visa is that holders are exempt from federal income taxes, as well as import taxes on computers, laptops, and other tech gear used for work purposes.
VAT in Costa Rica
In Costa Rica, the value-added tax (VAT) — the tax placed on certain goods and services — is called the Impuesto de Valor Agregado (IVA). The standard rate is 13%, but there are certain goods and services eligible for a reduced rate, like wood (10%), residential electricity (5%), and staple groceries and goods (0%).
Do American digital nomads in Costa Rica have to pay US taxes?
Yes. America’s tax system requires all citizens and permanent residents to file a federal tax return (provided that they meet the minimum income reporting threshold) regardless of where in the world they live.
Read More: Digital Nomad Taxes: Frequently Asked Questions
Expat tax provisions for Americans filing US taxes in Costa Rica
Moving abroad can complicate your taxes somewhat — below are some of the additional reporting obligations and tax breaks expats should read up on:
Foreign Earned Income Exclusion (FEIE)
The FEIE allows you to exclude a certain amount of foreign-earned income from taxation ($112,000 for tax year 2022, $120,000 for tax year 2023). To be eligible, you need to pass either the physical presence test or bona fide residence test. If you qualify, you’re also eligible for the Foreign Housing Exclusion/Deduction, which allows you to write off qualifying housing expenses like rent and utilities.
Foreign Tax Credit (FTC)
The FTC allows you to subtract what you pay in income taxes to a foreign government from what you owe the US government in income taxes. With Costa Rica’s digital nomad visa, however, you won’t be paying income taxes — so you wouldn’t be able to leverage this unless you eventually secure a Costa Rican visa that classifies you as a tax resident.
Foreign Bank Account Report (FBAR)
If you have $10,000 or more in foreign bank accounts at any point in the year, you’ll need to report the contents of those accounts to the Financial Crimes Enforcement Network (FinCEN) via FinCEN Report 114.
Read more about the FBAR here.
Child Tax Credit (CTC)
If you have qualifying dependents living with you in Costa Rica, you can file the CTC just as you would in the US to get as much as $2,000 in partially-refundable credits.
Foreign Account Tax Compliance Act (FATCA)
If you have over $200,000 in foreign assets by the last day of the tax year, or over $300,000 in foreign assets at any point during the tax year, FATCA requires you to file Form 8938.
Fallen behind on filing? Catching up on US taxes as a digital nomad in Costa Rica
If you were living in another country before moving to Costa Rica and fell behind on taxes because you weren’t aware of your obligations, you may be able to catch up penalty-free through the IRS’s voluntary amnesty program, the IRS Streamlined Procedure. To do so, you’ll need to file your last three tax returns, and six FBARs (if applicable), and certify that your previous non-compliance was unintentional.
Optimize your tax strategy with a Bright!Tax CPA
With more and more countries offering visas like Costa Rica’s, achieving your dream of becoming a digital nomad is more achievable than ever. While moving abroad is well worth it, though, it can complicate your taxes.
That’s where Bright!Tax comes in. Partner with us, and we’ll pair you with a CPA who’s uniquely qualified to handle your US expat taxes. Just consult with your Bright!Tax CPA, send them the documents they need, and they’ll file your return accurately and on time — all while minimizing your tax liability.
Reach out to schedule a free consultation today!