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Opening a Bank Account & Managing Your Taxes in Costa Rica

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If you are planning to move to Costa Rica, you will want to learn about the bank accounts and tax system there. As a foreigner, the type of account you can open will be dependent on whether you are a legal resident or not. If you only have a tourist visa, you will find your options limited. Some banks may not let you open an account at all.

Costa Rica has both state- and privately-owned banks. This guide goes go into the differences between these two types of banks, as well as which is preferred by local residents and why. Interested in learning more? Continue reading to learn all you need to know about setting up a bank account and whether or not you should pay income tax in Costa Rica.

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How to Open a Bank Account in Costa Rica

Knowing how to open a bank account in Costa Rica is important for non-residents. A local account will help you avoid currency exchange rates when using an international account. It will also be easier to set-up automatic withdrawals for things like

  • utilities;
  • cell phone;
  • WiFi bills.

Likewise, if you are moving to the country to open a business, or as an investor, it is often easier to manage your finances with a local bank that you can visit in-person.

The Difference between Private and State-Run Banks

You will find a number of private and state-run banks in Costa Rica. There are pros and cons to both, and the choice comes down to your own personal preference. For example, state-run banks have a larger presence in the country. Branches and ATMs can be found even in remote towns. Unfortunately, this presence and their popularity also means that simple in-person transactions often include lengthy wait times. If you do not speak Spanish, it may be difficult to find a teller who speaks your language.

On the other hand, private banks offer more personalized attention and faster transactions. You are also more likely to find agents who speak English if you need. If you are not yet a Costa Rican resident, you may also be able to work out a deal with a private bank to still open a regular account.

A Preference for State-Run Banks

Most expats and local residents choose state-run banks purely for the protection they offer. For example, because state-run banks are owned and operated by the government, they do not generate a profit. Account holders can therefore rest assured they will not find price gouging or hidden fees.

The money you keep in a state-run bank account is also insured. In some countries, such as the US, bank accounts are only insured up to a certain amount. In Costa Rica, there is no set limit.

Can a Foreigner Open a Bank Account in Costa Rica?

Yes, foreigners can open bank accounts in Costa Rica, but it is not as easy as you may think. For starters, some banks allow non-residents to open an account, but with limitations. Other banks may not allow this until you can show proof of residency.

If you choose a bank that does not permit non-residents to open an account, you can ask about opening a savings or basic account. These accounts typically do not come with an ATM or debit card. Therefore, account holders are required to visit the bank every time they need to make a transaction. You can upgrade to a regular account once you receive your residency status.

Things to Know

When setting up a Costa Rican bank account, ask about the option of dual currency. Because many expats choose to settle in Costa Rica, banks will accommodate foreign account holders by offering the option of banking in dual currencies. This makes it easier to transfer money between your home country and Costa Rica, or, if you are self-employed or living on a retirement pension, it will help you receive money.

Requirements to Open a Bank Account as Non-resident

Most Costa Rican banks require people to come in person to open an account. This varies from bank to bank, and some even allow a designated person to open an account on your behalf.

Whether you open an account in person or not, you will need to provide the following documents in order to open a regular bank account:

  • your original passport plus a copy of the ID page;
  • bank statements detailing the last three months;
  • utility bill or lease statement;
  • statement of funds so that the bank has an idea of where your money is coming from and how much it is (if you are working in Costa Rica, this can be your work contract with stated salary).

Other requirements will vary bank by bank. For example, a bank may ask for a letter of reference from your previous bank. As stated before, some may even require legal residency to open an account. If this is the case, you will need to provide a copy of your residency permit in addition to the ID page of your passport.

Can I Open a Costa Rican Bank Account Online as a Non-resident?

The option to open a bank account online in Costa Rica as a non-resident will vary from bank to bank. As stated before, most banks will require you to open an account in person or via a legal representative. If you are concerned about having access to a local account right away, you can look into the various private and state-run institutions and see if any offer the option to open an account online. Keep in mind that if they do, the services available to you may be limited until you visit the bank in person.

Bank Fees and Minimum Deposits

Minimum deposits are common among Costa Rican banks. Depending on the bank that you choose and the account type, required deposits typically range from 14,240—57,000 CRC (25—100 USD).

Even if you open a local account, you may find yourself paying a fee every time you use an ATM for a transaction. Because of this, many Costa Rican residents visit their bank branch in person for deposits, transfers, and withdrawals. If you do incur a fee, it is usually no more than 1,000-1,500 CRC (2-3 USD).

Are there No Fee Bank Accounts in Costa Rica?

Banks will typically not require a fee to open an account. Instead, they will just require a minimum deposit, which was described above.

Best Banks in Costa Rica for Expats

One of the best banks for foreigners in Costa Rica is the state-owned Banco de Costa Rica (BCR). This bank allows foreigners to open accounts even before they have received their legal residency in the country. To do so, you will need to present a valid ID and contact information such as your cell phone number and local address.

Tops Banks in Costa Rica

  • Banco Nacional de Costa Rica
  • Banco Promerica
  • Banco BAC San José
  • Bancrédito

Top International Banks in Costa Rica

  • ScotiaBank
  • Citibank
  • Bank of America
  • HSBC

Best Online Banks Costa Rica

The quality of online banking differs from bank to bank. In general, you will find decent online banking options when using an international bank in the country or one of the state-run institutions. A popular option is BAC Credomatic, which allows account holders to set-up an online username and password without having to visit the bank in-person.

What is the Tax System in Costa Rica?

When people think about what the tax system is like in Costa Rica, many envision a tax haven, but this is not entirely true. Individuals do not pay tax on foreign revenue. Because it is so difficult for foreigners to work in this country, many expats either freelance or are retirees. They are therefore exempt from income tax. Likewise, companies incorporated in the country are also exempt from paying local tax on any revenue generated from abroad.

The Tax System in Costa Rica

Costa Rica is often referred to as the “Switzerland of Central America” because of its generous tax system. This is no longer true as the country has signed treaties with other countries, such as the US, to prevent the ease of money laundering within its borders. In fact, Costa Rica has cracked down on foreign finances so much that the European Union removed the Latin American country, along with the UAE, from its official list of tax havens in 2018.

Unlike so many other countries, any money not earned from a local source in Costa Rica is not taxed. Thus, companies and individual expats who earn their money from abroad are exempt from paying income tax.

Does Costa Rica have a Double Taxation Treaty?

No, Costa Rica does not participate in the global taxation treaty, which protects expats from having to pay the same taxes in their new country and their home country. Why? Because the country does not tax residents on income made abroad.

What does this mean for you as an expat? It means that although you may be exempt from paying taxes on your foreign income in Costa Rica, you will still need to look into paying taxes with your home country.

The Tax Year in Costa Rica

The tax year in Costa Rica runs from October 1 to September 30. Taxes need to be filed by February 15.

Types of Taxes in Costa Rica

While it may sound like most expats can live in Costa Rica without paying taxes, this is not the case. The main taxes you will come across as a foreigner are property, sales, import, corporate, and income.

Property Tax

If you are investing in real estate in Costa Rica, you will need to be aware of the property tax involved. Luckily, rates are low: less than 0.5%. You will either pay this tax quarterly or on the date that you file.

Sales Tax

This is also called Value Added Tax (VAT) in other countries. This tax is added onto most products and services that you will purchase. It tacks on an extra 13%. This tax is levied at the point of sale.

Import Tax

Whenever you ship something to Costa Rica, including your own personal goods, you will need to pay import tax. The tax you pay will vary based on the item you are importing. Generally, you should only pay around 1%, but this can go up as high as 15%.

Corporate Tax

If you move to Costa Rica to start your own company, you may need to pay a corporate tax depending on the size of the business. Companies that make over 109,032,000 CRC (191,000 USD) in a year are taxed 30%. Companies that make less than this amount will receive a slightly lower tax rate. If your revenue comes from outside the country, local taxes will not be imposed.

What is the Income Tax in Costa Rica?

If you land a job with a Costa Rican company, you will need to pay income tax. This tax is levied on both employment and non-employment sourced income, meaning that even the income you may make on a vacation rental will count.

Income Tax Bracket for Monthly Incomes

CRC USD Tax Rate 0-619,000 0-1,090 0% 619,000-929,000 1,090-1,630 10% 929,000+ 1,630+ 15%

Taxes for Self-Employed People in Costa Rica

If your income from self-employment is earned outside of Costa Rica, you will not have to pay tax on it. If your income is made in the country, you will pay 10-25% depending on how much you make in a year.

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