Costa Rica has joined its neighbor, Panama, and other nomad hubs, like Mexico and Portugal, in launching a visa to attract remote workers and boost their economy.
Nestled in Central America with its picturesque landscapes, bustling cities, and ideal time zones, the country has quickly become one of the most desirable destinations for remote workers.
While working remote from Costa Rica may seem like an easy thing to do, the application process for the visa is lengthy and there are important considerations for employers to note.
If your company has employees who hold Costa Rica’s digital nomad visa and eventually become permanent residents, you need to be aware of local labor laws, data privacy laws, and tax obligations.
This may seem like a tall task, but with Borderless, it’s never been easier. Borderless makes paying digital nomads in Costa Rica a stress-free experience.
Curious to know more about Costa Rica’s digital nomad visa requirements and what it’s like working remotely from there? Keep reading.
What is a digital nomad visa?
Digital nomads have the ability to work from anywhere in the world. They rely on technology to execute their projects. Those working as digital nomads must have a strong internet connection and excellent project management and organizational skills to be successful in their roles.
More and more people are adopting the digital nomad lifestyle. And, as a result, many countries are offering visas targeted towards them. Digital nomad visas allow remote workers to stay in a country for an extended period. Most visas offer a year to start. During this period, the digital nomad can earn their regular salary from their home country.
A digital nomad visa allows remote workers to establish a base in a certain country rather than being on the move every couple of months.
Why are people working remotely from Costa Rica?
Costa Rica has been a favorite among expats and remote workers for years, and with the launch of Costa Rica’s digital nomad visa, its popularity has only increased. In fact, as of October 2022, over 120,000 American citizens resided in Costa Rica.
Costa Rica has warm weather, a relaxed, laid-back lifestyle, stunning landscapes, and endless activities. And, the quality of life is high. Costa Rica consistently ranks high in various quality-of-life indexes. Costa Ricans live by pura vida (pure life), which promotes work-life balance and a lifestyle focused on experiences and wellness.
Since Costa Rica has long been a tourist destination, it has the necessary infrastructure and development for digital nomads to be comfortable and successful. While Wi-Fi speed varies in Costa Rica, especially in rural areas, it is reliable in coastal towns and cities. For those worried about the internet, coworking spaces are common and usually have high-speed connections along with all the other necessities.
For these reasons, as well as a sound healthcare system and stable political climate, Costa Rica’s expat and digital nomad community is alive and well. Many towns and cities, like San Jose, Jaco, and Santa Teresa, have a range of accommodation options, like Outsite or Selina, designed for remote workers.
About the Costa Rica Digital Nomad Visa
Often referred to as the Costa Rica DNV or Costa Rica remote work visa, Costa Rica’s digital nomad visa allows remote workers, freelancers, and business owners to live there for up to two years and open a Costa Rican bank account. The Costa Rican government offers this visa so people can visit Costa Rica for longer than on a tourist visa without becoming a permanent resident.
This visa isn’t to be confused with the Costa Rica work visa, which allows people to work for a Costa Rican company. Those on Costa Rica’s digital nomad visa must earn their income from a foreign employer or foreign clients and are not to earn any money from a Costa Rican source.
Health Insurance and Other Requirements
Costa Rica’s digital nomad visa requirements aren’t extensive. Aside from having a foreign income, those who wish to be granted this visa must earn a stable monthly income of at least US $3,000.
Those who are applying with a family, the minimum income requirement is US $4,000.
Other conditions and requirements for this visa include the following:
- Possessing adequate health insurance.
- Possessing a valid driver’s license.
- Residing in Costa Rica for 80 consecutive days in the first year to be eligible for renewal.
Application and process
Costa Rica’s digital nomad visa requirements include the following:
- Valid passport
- Travel insurance
- Visa application form
- Proof of accommodation
- Employment contract
- Declaration letter stating remote work allowance in a third-party country and monthly earnings
- Bank account statement that shows proof of financial means
- Declaration form providing any information about dependents, if applicable
- Medical insurance with a minimum coverage of $50,000
Every foreign document must be translated into Spanish by an official Costa Rican translator. Once you have all the documents, you can apply at your local Costa Rican embassy.
Securing Your Residency Permit
Once the visa has been approved, which generally takes around two weeks, applicants must enter the country and secure a residency permit from the local authorities within three months. If not, the visa will become void.
Securing a residency permit includes the following steps:
- Registering biometrics at the Ministerio Seguridad Pública in San Jose
- A letter in Spanish, detailing the request for a residence permit; this must be signed by a public notary or an immigration official.
- Two passport photos that adhere to Costa Rican size guidelines
- Birth certificate
- Consular registration issued by the home country’s consulate in Costa Rica
- Proof of clean criminal background check
- A general application, displaying all personal details about work and income
The application fee for this visa is US $100 and must be paid to the Banco de Costa Rica before the application is submitted. Translating the documents is an additional cost, and officially registering the documents costs US $90. Obtaining the residency permit costs US $50, as well as an additional US $3.75 per page of documentation submitted. This is to cover the cost of legally registering the documents.
Taxes as a digital nomad
Digital nomads are not considered ordinary residents, and as a result, enjoy tax benefits. They are exempt from paying import taxes on essential personal computer equipment, such as laptops or mobile devices required for work.
They are also exempt from paying taxes on utilities that are related to the income they receive, like internet or electricity bills. In addition, nomads on this visa have full income tax exemption in Costa Rica; they simply need to pay income tax back in their home country.
Taxes and independent contractors in Costa Rica
Independent contractors are paid by invoice and are not on a company’s payroll. They are responsible for filing their own taxes. Employers paying independent contractors don’t have to worry about social security contributions.
Managing digital nomads in Costa Rica
Employers are still responsible for managing the employment relationship with digital nomads working remote from Costa Rica. This can be done by offering workspace benefits, non-linear workdays, time-tracking software, effective project management, and a remote work policy.
Provide coworking access
With the increasing presence of digital nomads in Costa Rica, coworking spaces have been popping up left right and center. Digital nomads flock to coworking offices — highly appreciated among the digital nomad workforce.
Coworking offices create a community and encourage collaboration and connection. And, not everyone working out of a coworking space is on Costa Rica’s digital nomad visa. Some are locals, encouraging better local integration for newcomers.
Employers who have employees on Costa Rica’s remote work visa may want to consider offering coworking as a supplemental benefit. Normally, you simply offer a monthly or yearly stipend to cover the costs of the coworking pass.
This way, employees can choose their own local coworking space in Costa Rica, no matter which city, mountain village, or surf town they’re in.
Flexible work policies
One of the biggest reasons remote workers adopt a digital nomad lifestyle is flexibility. Nomads value flexibility and work-life balance, so it may be wise for employers to implement a flexible work policy.
A flexible work policy refers to when an employee works, whereas a remote work policy refers to where an employee works.
An employer can choose to have both a remote work policy and a flexible work policy in place. However, both should be clearly elaborated and differentiated.
A flexible work policy can include different communication methods, such as asynchronous communication, and core hours when employees must work. Core hours create some form of overlap among employees and employers to allow for increased collaboration.
Remote work policies
Remote work policies streamline remote work and facilitate remote team management. Without a remote work policy, employees and employers alike may experience confusion, frustration, and mixed communication when it comes to fulfilling their daily tasks and responsibilities.
A remote policy allows an employer to put clear guidelines and expectations in place for their remote employees. Remote work policies also allow employers to manage any risks associated with employees on Costa Rica’s digital nomad visa or having an employee working remote in Costa Rica.
What to include in a remote work policy
Employers can include anything they see fit in their remote work policy — there are no elements of compliance when developing one for employees based in Costa Rica. However, for those who aren’t sure where to start, there are some key things to be aware of.
Employee availability
In the remote work policy, employers should outline the expectations surrounding employee availability. Setting schedules, regardless of location, allows for effective communication across all channels and ensures smooth processes for everyone involved.
Security tips
It can be hard to deal with security issues when working remote from Costa Rica. Even when companies work on secure networks, data privacy is not always guaranteed.
Those working on Costa Rica’s remote work visa must be careful when working in public places. If employers don’t want their employees working on public Wi-Fi, then that should be clearly outlined in the remote work policy. Or, if an employee does work from a public network, require employees to use a VPN.
Protection from termination
In a remote work policy, employers need to clearly state that no employee will be terminated because they are working remotely.
Unfortunately, sometimes, managers are uncomfortable with having remote employees simply because they are unable to see what they’re up to. This part of the policy is in place to protect remote employees from unfair termination.
For managers who are wary about productivity when working remote from Costa Rica, consider using performance-tracking tools, project management software, or even time-tracking tools.
Other visas available in Costa Rica
Working remote from Costa Rica is just one way people can reside in the country. While Costa Rica’s remote work visa is popular, other options are available that suit every type of traveler and worker.
Tourist visa
While Costa Rica’s digital nomad visa requirements include a minimum monthly income, the tourist visa does not. Costa Rica’s tourist visa allows travelers to enter the country for 30 days, or 90 days for citizens of eligible countries.
Not everyone needs to apply for this visa, though — citizens of Canada, a Schengen Zone country, Japan, South Korea, or the United States can enter Costa Rica freely.
For those who hold passports from outside of the countries listed above, applying for Costa Rica’s tourist visa can be done as long as applicants have the necessary documents. These documents include passport photos, a police record, and evidence of onward travel, and the visa takes about 30 days to process.
Unlike Costa Rica’s remote work visa, those on the tourist visa cannot open bank accounts, or work remotely.
Resident visa
Costa Rica’s resident visa is for individuals who wish to reside in Costa Rica indefinitely. This visa is divided into four different categories.
Pensionado
This visa is designed for retirees. Applicants just need to prove that they earn US $1,000 per month from a permanent pension source.
Rentista
This visa is for individuals who demonstrate that they have a stable income source from investments abroad. This is typically done from passive income, such as rentals. Applicants must earn a minimum of US $2,500 from foreign investments.
Investor visa
This visa is designed for individuals who invest large sums of money into Costa Rican business or real estate. The amount required to invest varies on a case-by-case basis.
Costa Rican work permit: special category residency
This visa is the perfect opportunity for independent contractors looking to establish their business in Costa Rica. It’s a work visa and temporary residency that allows foreigners to live and work in the country. Occupations that can apply to work in Costa Rica under this permit include:
- Athletes
- Artists
- Entertainers
- Inter-company transfers
- Self-employed individuals
- Interns
- Academic researchers, professors, and teachers
Embrace flexibility with Borderless
Allowing employees to work from wherever they desire, like in Costa Rica, has many benefits, like increased employee well-being and retention rates. Costa Rica has the necessary infrastructure and development that provides nomads with a professional community and adequate internet speed to remain productive.
For organizations to tackle international payroll effortlessly and guarantee compliance for nomads in Costa Rica, choose Borderless. Speak with us to learn more.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
