Is the Grass Really Greener?

Are you considering a move to a foreign country?

There have been a lot of posts and discussion on Substack and other places recently about people interested in moving out of the U.S. to another country. Some are looking for the perfect retirement destination, some want less “lively” politics, others are looking for an adventure like we were when we moved to Costa Rica.

I’ve gotten many new subscribers from

Jacob Dean

’s publication, A Year in Oaxaca. He writes about relocating to Oaxaca, Mexico. His starter guide for leaving the U.S. garnered a lot of interest as did his post on getting temporary residency in Mexico.

On the same topic, I thought I’d share our experience relocating to Costa Rica from the U.S.

First a few cautions and considerations! Do not take everything you read here or from others as your be-all-end-all source of information. Do your own research. If you are seriously considering a move, talk to your attorney and financial advisor and get a reputable attorney in the country you are considering. Check your home country’s embassy website in the relocating country for other information.

Consider your current situation. What do you like/don’t like about your current country, or city? Do you like Amazon delivery at your front door? How easy is it to travel within your country? Do you like plentiful entertainment options? Do you like being close to friends and family? These things may not be available in the destinations you are considering.

Are you retired? Get Social Security? Are you working or plan to leave your employer? Will you be selling your current place to live? What is your current health insurance source and how will you insure yourself in your foreign location? Do you have kids that will stay or go with you?

After taking stock of these things and more, does the grass still seem greener on the other side?

Photo by Adriel Kloppenburg on Unsplash

Here are some things we experienced when we relocated to Costa Rica.

For reference, we were there from mid 2017 to late 2022. A little more than 5 years.

A big reason we chose Costa Rica was that as foreigners, we had the same legal rights as locals.

As part of our move, we were purchasing property and a business. As foreigners in Costa Rica, we could legally purchase property and the business outright. We had full title to the real estate and opened the business as a Costa Rican entity. We had to establish a name, get a tax ID number, and of course, pay Costa Rican taxes. We read an excellent book called The Legal Guide to Costa Rica that helped us understand a lot of this. Some countries don’t give foreigners all the rights of native citizens, so do your research!

And speaking of taxes, just because you relocate doesn’t mean you are exempt from your home country taxes. Oh no, not if your home country is the U.S.!

As long as you are a citizen of the United States, you are considered a resident of the last state where you lived, and you will be taxed by that state and the IRS even if you have absolutely no remaining connections to that state or the U.S. Any money our business made in Costa Rica was subjected to Costa Rican taxes, but also taxed in the U.S. And not just Federal taxes. Our home state was Illinois so yep, they took their cut too - even though our revenue was generated in Costa Rica. (Nice, right?!)

We had a great Costa Rican attorney, and we followed all rules according to Costa Rican law for our real estate purchase. (I have a major fear of going to jail in a foreign country!) While this cost us a little more in legal fees at the beginning, it saved us many times what we spent. Good local legal help is crucial!

In addition, even as foreigners we were able to insure our property through Costa Rica’s national insurance company. Thank God we did! When the perfect storm hit, we were reimbursed for a large portion of the damages we suffered from the storm.

One of the biggest challenges we faced was transferring money to Costa Rica.

This difficulty probably applies to all sizeable international money transfers. Due to money laundering schemes and drug trafficking, banks want to know WHERE your money is coming from. Even after providing piles of bank statements and tax returns, the Costa Rican banks still restricted how much money we could transfer each month based on some mysterious calculation they did of how much they thought we would “need”.

When we remodeled the hotel, we needed more cash than we held locally. Going through hoops to transfer money with all its documentation, permissions, notarizing needed was a huge pain!

Would it have been easier if we were residents? Maybe.

Speaking of residency here’s what we did – or didn’t do.

We didn’t apply for Costa Rican residency.

As foreigners with an investment over a certain amount in Costa Rica, we were eligible for “expedited” residency. We had other ex-pat friends with investments, but their “expedited” residency applications still took about 3 years to get with lots of fees and bureaucratic hurdles. It didn’t seem worth it to us, but in some countries, it may be more important.

What would Costa Rican residency have gotten us?

We wouldn’t have had to leave the country every 90 days. We lived there on tourist visas, and as a result, were required to leave every 90 days. (Costa Rica has recently announced a 180 day tourist visa.) I knew I would probably like to go back to the U.S. to see my kids so that wasn’t an issue for me. (All you have to do is leave the country, and many foreigners in our area would travel a few hours to Panama and then return without having to fly somewhere.) A risk we knew we were taking without residency was if foreigners would be shut out of Costa Rica for any reason. Costa Rica hasn’t had an army since the 1940s and they are not known for political unrest, so we felt ok without residency.

Costa Rican residency would have also given us access into the Costa Rican national healthcare system. We would have been required to pay a small monthly premium to use it when and if we needed. We didn’t see the need to do this because we were already paying for health insurance in the U.S. for our family. We still had 2 kids in college that were under our plan and even though there were other ways they could’ve gotten health insurance, we chose to stick with the plan for our family. Strange? Maybe. Worked for us. (Again, do your own research!) And fortunately, neither Mark nor I ever needed to see a doctor in Costa Rica. If we had, we could have gone to a private healthcare provider which are sometimes considered to be of higher quality anyway.

With residency we would have also been required to obtain a Costa Rican Driver’s License. We could drive with our U.S. licenses and get auto insurance for our Costa Rican cars without residency, so that’s what we did.

Another consideration is the cost of living.

You may think your money may go farther somewhere else, but that’s not necessarily the case.

In Costa Rica, the cost of real estate is comparable, but most goods (like food) and utilities (electricity, gas/diesel for car) are more expensive. And the tax rate on goods and services in Costa Rica is 13%. And for food and beverages served in a restaurant, there is an additional service tax of 10%. So, to go out to dinner, you’ll be paying taxes of 23% on your bill.

Healthcare and hired help (housekeepers, landscapers) are less expensive. For us to have our hotel business, the cost of having employees was less expensive in Costa Rica than it would’ve been to have the same number of employees in the U.S.

So, is the grass greener?

Maybe. Is any place perfect? Not likely. You have to understand all things about your foreign country and remember that you may also have it pretty good where you are.

All things considered, wherever your grass is greenest is probably the place for you at the time!