Benefits for retired residents in Central America

Regional Immigration Law Team

Pensioned resident at Central American level can be understood as a person who enjoys a permanent, lawful, individual income generated outside the country, a pension or retirement from governments or institutions (whether public or private) that comply with the minimum amount determined by the competent authorities.

This type of residents enjoy immigration and tax benefits in the Central American region, which makes them an interesting and attractive option for many foreigners. Among the benefits for this type of residence, we highlight:

Regional – A permanent residency is granted and such benefit can be extended to their spouse and children (minors).
Regional – The resident enjoys tax exemption for the importation of household goods, each country determines the limit of the exoneration.
Regional – The resident is exempted from the payment of import taxes and Value Added Tax, for the introduction or local purchase of a new motor vehicle for personal use or for the use of their dependents, each country determines the exemption limit. In Costa Rica this benefit is authorized for two land, sea or air vehicles.
Guatemala, El Salvador, Honduras and Costa Rica – The amounts declared as income will be exempt from income tax.
Guatemala and Nicaragua – Suppresses fundamental requirements for residency application, mainly additional payments.
Honduras, Nicaragua and Costa Rica – Residents are allowed to carry out other activities such as investments or practice a profession.
Nicaragua – One-time exoneration of the payment of Value Added Tax for the purchase of materials for the construction of a house in which the resident will live, whose value may not exceed US$ 50,000.00.
Costa Rica – Exemption of 20% of the total transfer tax is allowed for those real estate properties acquired within the term determined by the applicable law.

Similarly, at the Central American level the requirements are similar to the general residency requirements for each country, however, we wish to highlight the following:

Birth certificate duly apostilled and translated.
Marriage certificate duly apostilled and translated.
Certificate of criminal record duly apostilled and translated.
Pension certificate proving an individual monthly income that complies with the minimum amount determined by the competent authorities, such document must be apostilled and translated.
The pensioner must prove to the authorities annually that he/she receives such pension.

Finally, we inform our readers that the procedure in Central America for this type of residence is very special, so to ensure the execution of various activities and properly enjoy the benefits, we suggest obtaining the advice of a specialist lawyer.