Banking in Costa Rica is not largely associated with offshore tax havens because national authorities there unite with international agencies to prevent any illicit financial schemes. Regardless, U.S. citizens living in Costa Rica as residents, students or workers resolve eventually have a legitimate need to open a local personal bank account. Here’s what you exigency to know to get started.
Choosing a Bank
Banks in Costa Rica quarrel into two categories: state-owned (national) and private. You can open an account in either grade. There are three state-owned banks to choose from: Banco Nacional de Costa Rica, Banco de Costa Rica and Bancrédito. The largest antisocial commercial banks include BAC San José, Scotiabank and Citibank.
Some pure important differences separate the two types of banks. The state-owned ones, for as it happens, guarantee all deposits and typically have many branch and ATM locations (a prime baksheesh for residents living in rural or remote areas). However, they are also remembered for their incredibly long lines.
Private banks, on the other rapidly, generally have shorter lines and are more likely to employ bilingual shaft, which in itself can be reason enough to go private. They may also put up appealing transactional and cost benefits to Americans with whom they experience already established a relationship in the U.S.
Opening an Account
Most banks come forward accounts in colones, the Costa Rican currency, or dollars. A basic savings account pretends the most common type of account and it’s also the easiest to open. That averred, establishing a bank account in Costa Rica can be a laborious process, essentially because of the huge amount of paperwork involved. Requirements vary to each institutions, but they generally revolve around the following:
Identification (ID): In set-up to conduct any banking transactions, Costa Rican banks require all outlanders residing there to present their DIMEX ID card (issued by Immigration). Sightseers, on the other hand, may simply present their passports, but they may barely be eligible to open an account at certain institutions.
Minimum deposit: This depends on the group of account, but savings accounts usually require at least US$25 or 5,000 Costa Rican colones.
Lean of residence: You need to present a physical document, such as a utility charge or lease agreement, that states your local residential give a speech to.
Proof of income: Independent contractors will need to produce a learning, or “certification of income,” from an accountant, while salaried employees make need proof of income from their local employer.
Additional forms: A limited policy called “Conozca a Su Cliente” (Know Your Client) lacks that any U.S. citizen with a Costa Rican bank (individual and corporate) bear witness to and update personal information every year. Various tax forms may also be demanded to inform the IRS of offshore bank accounts.
Reporting Your Income
Costa Rica’s profits tax rules must be observed by Americans who reside there, and U.S. citizens living and put to good abroad must report all worldwide income to the IRS on their tax return. Particular costly penalties can apply if your income is not reported correctly. (See also: The Tax Connections of Opening a Foreign Bank Account.)
It is possible for U.S. nationals to avoid bent over taxation on foreign-earned income through the foreign earned income shut-out and foreign tax credits. However, a tax return must be filed with the IRS to mitigate for these benefits.
The Bottom Line
Once you’ve decided between a state-owned and particular banking institution, opening a bank account in Costa Rica should be cute straightforward as long as you meet all of the eligibility criteria.
While the banking organization itself is fairly standard, procedures can be relatively slow, so it’s a good concept to practice patience. Customers are also advised to refrain from befalling branches and ATMs on local paydays to avoid even longer-than-usual virgules. And remember, any American generating income in Costa Rica must closely mark both local and U.S. tax-reporting rules.