Why Invest in Costa Rica?
In 2023, Costa Rica ranked as the top country for foreign direct investment due to its security, political stability (one of the strongest democracies in the Americas), peaceful, highly educated population, and pro-business environment. All these conditions encourage investment from both local and international parties, as they guarantee long-term benefits as well.
One of the driving factors behind Costa Rica's success has been its brand of sustainability and eco-friendly initiatives. This can be easily seen within the developing tourism industry of Costa Rica. For many, an investment in Costa Rica is a secure diversity outside of their home country. Below, we explore ways in which you can invest in Costa Rica.
How We Help You Invest in Costa Rica
We have advised and guided many people in various investments in Costa Rica, from luxury tourism projects to vacation homes. Using our years of experience and access to data, we can help you make the right investment choices.
We are not REALTORS. We help guide, advise, and simplify the process by clearly understanding your goals and using our 100% local experts and experience to customize a plan to YOUR needs. We provide you with the information and perspective to make an informed decision whatever that decision may be.
We represent YOU, acting in your best interest at all times as we help you. Think of us as you would think of lawyers or accountants when it comes to investing in Costa Rica.
Investment Opportunities
There are various ways to invest in Costa Rica, and below, we highlight a few that may be of interest to you.
1. Fractional Ownership
Fractional ownership allows investors to own a piece of a property that is developed and operated by one of the country's top companies, while receiving annual dividends, the ability to enjoy and use the property each year and at the end of the defined investment period, sell the property and enjoy further return on your investment.
Who is this for? This is great for investors looking for a more hands-off investment where they are investing in a vacation rental property in a top tourism market that will generate returns. They also get to use it for a ceratin number of nights a year.
Example: Arenal Luxury Villa has11 shares at $100,000 each, estimated return = 15%.
2. Land Investment
A relatively easy method to invest in Costa Rica real estate is to buy a plot of land and hold it.
Who is this for? Typically, this is for speculators and requires deep knowledge of the country's economy and what drives land values in different areas of Costa Rica.
Example: In areas of Costa Rica like Nosara, Flamingo, Tamarindo, and Dominical, you would have doubled your money if you'd bought it a decade ago. Land can be bought in Costa Rica for as little as $25,000.
3. Vacation Home Investment
Investing in a vacation home allows you to own a personal getaway while earning income when not using the property. The key here is finding what fits your personal lifestyle and investment goals. Working with a local expert helps with the initial conversation to determine where to start looking.
Who is this for? Typically for travelers familiar with Costa Rica who envision themselves vacationing here while also looking to diversify their portfolio. It’s a great way to offset the expenses of second home ownership while making a return on investment.
Example: You can expect to cover your costs and, at best, get a 3-5% return, however, having an ocean view, more than three bedrooms, as well as ground floor bedrooms, are just a few ways to set yourself apart and receive a higher ROI. We currently manage and have helped some properties get 10%+ returns/year.
Benefits of Investing in Costa Rica
There are many benefits for investors settling in Costa Rica.
- Investment residency: If you invest over $150,000 in an asset in Costa Rica, such as a vacation rental, second home, company, or fractional ownership, you can apply for Costa Rican residency.
- Free trade zones: Companies that qualify can benefit from exemptions on import duties, corporate income tax, and some municipal taxes. This is particularly attractive for manufacturing and export-oriented businesses.
- Low property tax: Only .25% of registered value. This is lower than any state in the United States.
- Free trade agreements: Costa Rica has signed various Free Trade Agreements (FTAs) with countries like the US, Canada, and the European Union, providing easy access to international markets for businesses based in Costa Rica
- Location: Two international airports provide frequent and convenient access to the Americas and Europe. International arrivals continue to trend upward, with more direct flights every year.
- Taxes: Investments in the tourism sector that are deemed to be development areas or that focus on eco-sustainable initiatives are able to leverage tax breaks.
- Diversification: Diversifying your portfolio outside of your home country in a rapidly developing and secure country allows you to hedge against home market fluctuations while taking advantage of faster-growing markets.
- Friendly policies for foreign investors: You have the same rights as Costa Rican citizens when purchasing property here, giving you full legal protection and confidence when investing in real estate here.
- Stable government: Costa Rica is one of the most politically stable countries in Latin America, with a strong democratic tradition. It has no standing army, which contributes to its peaceful reputation and overall sense of security for investors.
Investing in Costa Rica can be great if you know what you are doing. We always say that the games look the same as in your home country; however, the pieces on the board move differently. Hence, we always recommend working with expert advisers.
If you want to know more about investing in Costa Rica or chat with an investment advisor, please contact us and we’ll help you!
