Digital Nomads Law: Opportunity for teleworkers, opportunity for Costa Rica.

Covid-19 has completely changed the world we live in. Although such statements often refer to the new challenges that the pandemic has presented, there have been changes that can also mean opportunities.

That is the case of the “Law to Attract Workers and Remote Providers of International Services”, better known as the “Digital Nomads Law”, an initiative that has already been approved in second debate by the Legislative Assembly, and that was signed by President Carlos Alvarado last Wednesday, August 11th, 2021.

With the entry into force of this Law, the General Law on Migration and Foreign Affairs is amended, adding within the migratory category of “non-resident” the subcategory of stay called “Worker or Remote Service Provider”, applicable to foreign persons who, by means of telecommunications, perform paid work for a natural person or a legal entity located outside the country. In other words, known as teleworkers.

Teleworking has represented a revolution in the way we work, even becoming the rule for many companies and the preference of many workers. In this way, teleworking has provided Costa Rica an important opportunity to position itself as a tourist and attractive destination for international teleworkers, who will enjoy a series of benefits, and in turn, will represent an income of important resources for the national economy.

Beneficiaries of the Digital Nomads Act will enjoy the following benefits: (i) a total exemption from income tax, as well as from any other tax related to their income from abroad; (ii) exemption from the payment of taxes for the importation of computer, telecommunications or similar equipment, instruments, tools or means, required for the provision of the services; (iii) teleworkers under this new category may travel inside the country using their foreign driver’s license, without requiring a Costa Rican license and without the expiration of the validity of their foreign license in relation to their stay as tourists, and, finally (iv) the possibility of opening bank accounts in the national banking system.

Those interested in benefiting from this new migration subcategory must submit the visa application form to the Directorate General of Migration and Foreign Affairs, together with the following documents:

– Proof that the applicant earns an average monthly income of USD $3,000, or USD $4,000 if the migratory category application is extended to the applicant’s entire family. This can be demonstrated through bank statements.

– Proof that the applicant has a medical insurance that covers him/her during the stay in the country. If the application is also for the teleworker’s family, each of the family members must also be covered by health insurance.

– Proof of single payment for the granting of a non-resident visa, such as Worker or Remote Service Provider.

– The remaining specific requirements and procedures will be established by regulations to the law. These regulations are currently being prepared by the Executive Branch, to be published in the upcoming weeks and serve as a guide to law enforcement.

The application will be resolved within fifteen calendar days, however, if necessary, the Directorate General for Migration and Foreign Affairs will communicate within five days the omissions or defects to be corrected by the applicant, who will have from that moment on a period of eight more days to complete or clarify the necessary information, suspending the deadline for resolution.

The migration status will be granted for a period of one year, extendable for another six months, and the applicants may apply not only for themselves but also for their family nucleus (spouse and children). It should be noted that it is absolutely essential that the applicant provides his services to, and is remunerated by, a natural person or legal entity outside Costa Rica.

In this way, Costa Rica could benefit from the opportunity that teleworking offers. The arrival in the country of remote service providers encouraged by the aforementioned benefits would imply an important advance in the process of economic reactivation, since it would bring activity for the tourism sector of those who wish to stay in the forests, beaches and mountains of the country to work remotely, who will also be inevitably inserted in the consumption of goods and services at the national level. While living in the country, the teleworkers will not only enjoy consumption in tourist activity (lodging in hotels, food in restaurants and other recreational activities), but they will also hire from providers and suppliers of our country the services that are part of the day to day of any person. Thus, positioning itself as an ideal destination for teleworking through migratory incentives could represent a key factor in the country’s economic development.

Written by:

Paralegal: Mijael Aviram.

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