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Costa Rica: how residence and citizenship work

Residence tests, reporting duties, social security, living base and citizenship for Costa Rica, with the official source for each.

Short answer

Costa Rica's Income Tax Law taxes income of Costa Rican source, defined as income generated exclusively within national territory regardless of the nationality, domicile or residence of the parties. Since Law 10381 of 14 September 2023, certain foreign-source passive income (dividends, interest, royalties, capital gains and real estate or other capital income) is taxed by exception, but only when earned by an entity in a multinational group that is not a qualified entity with adequate economic substance in Costa Rica.

Key facts

Tax basisMainly territorial
Tax year1 January to 31 December
Taxes citizens abroadNot as a general rule
Residence tests recorded2
RegionCentral America

How Costa Rica decides tax residence

Each test is recorded separately with its own ID. Meeting or missing one test does not settle residence on its own.

CR-RES-01Registration, domicile or statusNot professionally reviewed

Domiciled status of individuals set at the close of each fiscal period

The tax on profits applies to individuals, legal entities and collective bodies domiciled in Costa Rica that carry on profit-making activities of Costa Rican source. The law says whether an individual is domiciled or not is established at the close of each fiscal period, with special cases set by regulation. The detailed domicile criteria for individuals are in the regulation and were not verified for this record.

Source: Ley 7092, Ley del Impuesto sobre la Renta, artículos 1 y 2 (versión vigente, SCIJ/Sinalevi)Checked: November 8, 2026
CR-RES-02Day count183 days · Any 12 monthsNot professionally reviewed

Permanent establishment of non-domiciled persons: more than 183 days in any twelve months

The law treats a non-domiciled person as having a permanent establishment where it has a fixed place of business in Costa Rica, and also where construction or installation projects, or services by its employees or contracted staff, continue for more than 183 days in any twelve-month period beginning or ending in the fiscal year. Periods of associated companies can be added together in some cases. This is a business-presence rule, not a test of individual residence.

Source: Ley 7092, Ley del Impuesto sobre la Renta, artículo 2 (reformado por la Ley 10381 de 2023)Effective: Law 10381 of 14 September 2023Day method: not recordedChecked: November 8, 2026

Living base

Foreign nationals live in Costa Rica under residence categories set by the migration law and administered by the Dirección General de Migración y Extranjería; the categories were not verified from an official page for this record. Residence status does not change the territorial scope of the income tax, and the domiciled status for tax purposes is set at the close of each fiscal period.

How visas, permits and tax residence differ

Citizenship

The Constitution (article 14) allows naturalization for nationals of other Central American countries, Spaniards and Ibero-Americans by birth after five years of official residence, for other foreign nationals after at least seven years, and for people married to a Costa Rican for two years who have lived in the country for the same period, subject to the requirements of article 15 and the law. Article 16 says Costa Rican nationality is not lost and cannot be renounced.

Read the citizenship guide

Questions to take to a professional

  1. Which of my income items would count as Costa Rican source under article 1, and which as foreign source?
  2. How does the regulation decide whether I am domiciled in Costa Rica at the close of the fiscal period?
  3. If I hold assets through a company that belongs to a multinational group, could the Law 10381 exception for foreign passive income apply?
  4. What would a qualified entity need to show to have adequate economic substance in Costa Rica?
  5. Have any reforms after Law 10381 changed how foreign-source passive income is treated, and from when?
  6. Could my work or my company's projects in Costa Rica create a permanent establishment under the 183-day thresholds?
  7. Which residence category and naturalization period would apply to my situation?

Official authorities

Sources

Other countries in Central America

🇵🇦 Panama
Countries covered
Costa Rica
Sources
3 sources listed above
Tax year
Current rules as checked
Review
Not professionally reviewed
Sources checked November 8, 2026