Costa Rica signs law to attract digital nomads

Regarding the government, a lot of locals were upset with the government policies, mostly around immigration, with lots of people moving into "slums" as low-wage workers from neighbouring countries, displacing Tico workers. There were a lot of fans of Trump there because of his policies around immigration. I was surprised, as I had a good impression of the government there, like you do, and expected to see more pride in the way things were done regarding the environment.

Interestingly, one of the people I talked with these opinions was a full-time accountant who took the day off to drive us across the country for $100.

Smart! Low taxes, same time zone, up and coming country…

I find most people here with disparaging remarks to say about the place seem like they could benefit from getting out of their smelly basement and check it out for themselves. There's many cities in the USA which are less safe than this place.

The only thing is for the time being they're doing their best to manage covid by curfews, I'm taking a break until I can go back and actually leave the house to get a beer past 9pm

Insightful comment. However, this part seems inaccurate as Intel seems to only have/had a chip packaging facility in Costa Rica.

In Spain, it takes 5 years before losing tax residency after you've left the country. In France, having your wife and children in France makes you resident even if you don't live there. In the UK, you can be resident by only spending 15 days in the country if some other conditions are met.

On top of that you have to add the interaction between national law and double taxation agreements between countries.

For the local taxes, there are a lot of other taxes besides income tax the local government benefits from

In Canada, you didn't have to pay income tax if you were outside the country for more than half the year.

Now as a citizen or resident you have a bank account in Canada, any assets (house, car) or even set foot in the country within any given year you have to pay income taxes there.

*insert 1001 loopholes and exceptions here.

You’d have to renounce citizenship to get out of that little gem.

If you really become fiscal resident of a country with 0% income tax and the country you left is fine with that then, yes, you pay 0% income tax. I've got a friend who really went to live with his family in Monaco (he was a native french speaker, but not from France, which helps): he's there since five years now I'd say and, indeed, he pays 0% income tax.

* Costa Rica is pretty cheap. 30%-50% of US living cost. (minus Manhattan or west coast) You also get monkey’s in your backyard!

From a tax perspective you still are taxed on Canadian source income, so if your job is in Canada nothing changes.

With digital nomad visas specifically, as they are temporary and usually confer visitor status and not resident status, you may have difficulty establishing that you've left permanently and are resident elsewhere. That seems like a grey area yet to be tested, and the CRA probably has a good case there.

I'm not an expert, so consult a real expert in the field if you want tax advice.

In that case you won’t have to pay income tax anymore. However, where it gets complicated is that usually under these digital nomad visas you don’t get a new tax residence nor a tax file number from your new residence country. So you are kind of falling between the cracks and have a hard time opening bank accounts etc.

I’ve been through this whole ordeal and it certainly is an interesting experience with pros and cons.

But if you are self-employed or a different flexible arrangement, in some countries you can do the trick. For example if you live in Romania and move to CR for 2 years, you don't pay the 45% minimum income tax, which basically makes Costa Rica an "evil tax heaven" and you a very, very bad citizen of your country that is not contributing.

Of note is that the people on this lower income tier of people who travel on a low budget while working are going to be on tourist visas. Costa Rica's tolerated this for many years now but I think they're pretty much officially encouraging more people in the higher income bracket to come through too.

It's surprising how untrue this is. Ibn Battuta and Marco Polo were really outstanding exceptions, but even they were within the past millennium; from the dawn of human history 2 million years ago until the advent of metal money around 3000 years ago, there was no way to be a rich traveler, because wealth, to the extent that it could be accumulated at all, was not portable. It took the form of land and livestock. If you were a traveler at all, you lived by the hospitality of the people in the lands you visited, who could also kill you without fear of repercussions if they felt like it, and very likely would if they thought you were stealing their deer or their millet. You had no way to pay them; your granary deposit receipts from Ur were of no value in Egypt, and vice versa.

So there have only been rich travelers for the latest 0.15% of human history. But if you are shortsighted enough I guess that might seem almost the same as "always".

I'd put the number of digital nomads at probably tens of thousands. We founded coworking in part in order to make digital nomadism possible.

Studies have found that income inequality decreases with improved worker mobility.

In the north people always tout the benefits of having immigrants come in —especially the high income highly educated.

But here you’re doing the opposite and saying high income immigrants are bad for the locals. Is that the case only in one direction?

If you want someone to blame for the poor economy, blame local politicians corruption and graft endemic locally.

Compare Argentina to New Zealand. One has many more resources and many more people, both in the south but one has corruption and the other doesn’t. One does well and the other perpetually defaulting and getting nowhere.

Before you blame it on the past dictatorships keep in mind past dictatorships in s Korea, Taiwan, Japan even, have not kept those countries from becoming economic dynamoes. You do have to do the hard work of getting your house in order, instill education and entrepreneurship and a dream to succeed (corruption might favor incumbents for example).

Here's the dark secret: these countries are already the playthings of other countries and effectively irrelevant and powerless. The question is how they stop being that and not they avoid becoming it.

I think sci-hub is blocked in a bunch of European countries but very little of the so-called global south.

I'm not sure you know what a company town is. In a company town, a single company owns the whole town, trapping the inhabitants in a cycle of buying overpriced goods at the company store and renting overpriced housing from the company, so they can never save money. Mr. Peabody and his privileged knowledge laborers didn't move to a company town or even a quasi-company-town like Pawnee; he moved to Hinsdale, a wooded suburb of Chicago, where he'd grown up.

My experience with the so-called "global south" is that usually the local elites have a great deal more influence than overseas companies, and they use it to consolidate their own power, preventing economic development. But generalizations are misleading; the peripheral countries in the world economic system are extremely diverse. The problems in Nigeria are not the same as the problems in Argentina, which (fortunately) are not the same as the problems in Venezuela, and Micronesia has totally different problems (and is largely controlled by overseas politicians).

But as an engineering manager who travels to Costa Rica often to work for weeks from there (from all over the country) I can tell you that I rarely have connectivity issues.

You're looking at it from an individual/market economy point of view as a transaction (tax for services).

But that's not how the people setting the tax are looking at it. They're thinking about how can we make this country survive, how do we make it prosper, how much money do we need to make that happen, and how do we get that money from the population.

So you should expect to pay for things which are:

* Larger than individual or company scale

* Longer than individual or company lifespan

* Less probable than individuals or companies will consider

* Strategic in some other way that the market economy isn't able to handle

And yeah, a lot of those aren't going to benefit you personally. It's still a good idea for someone to be paying.

The above is an idealisation, and of course there is also waste and corruption to add to the picture, which is probably what you really object to I imagine.

Also .. Starlink.

I’d feel much safer living in a country whose healthcare system isn’t constantly at risk of being overwhelmed by uncontrolled Covid spread.

I'm a little confused by this. The exchange value for 1 USD to 1 Costa Rican Colon is 1:621. But I'm even more confused why this is a problem for you. It's the purchasing power that is important, and Costa Rica is significantly less expensive that the United States for someone holding US Dollars.

> the people were rude

All 4 million of them? If you've written off an entire country as rude, it might be on you.