Panama has passed a law to allow remote workers (or digital nomads, take your pick) to stay an extended time in that country, and Costa Rica is hot on its heels with legislation of its own. In this guide, we compare the current Central America digital nomad visas. If/when other Central American countries pass similar legislation, we’ll add them to this article to offer a well-rounded, updated overview.
I’ve said it before and I’ll say it again: I hate the term “digital nomad” even if, to all extents and purposes, I am one myself. Digital nomadism conjures up images of hostels, co-working “spaces”, Starbucks, and some kind of overbearing smugness about life.
But like I say, I am one myself. I haven’t worked in an office for well over a decade.
My work attire consists of underpants and t-shirt (both optional). I work from my couch, my kitchen table, my patio, my bed… and yeah, a veces en cuando from a Starbucks or something similar. I know, I know, I’m a walking cliche. It’s the term I hate, not the lifestyle.
I much prefer the term “remote worker” to describe this thing. It feels less pretentious, more normal, you know? And normality is the watchword here, especially as we inch back out into the world in the wake of the pandemic.
Jenny Gross from @nytimesworld does a great job covering the work from anywhere tax risks.
⚠️ Do you see #workfromanywhere mainly as a risk?
— WorkFromAnywhereTeam (@AnywhereTeam) May 28, 2021
Digital nomadism and remote work was always going to be the thing of the future.
It was always going to become normal. Someday. But no-one expected it to become normal overnight. No-one saw that particular juggernaut coming down the track.
Covid made work-from-home normal. Before the pandemic, none of my friends in the UK worked from home. Now they all do. And work-from-home is a less-sexy way of saying remote work. Which is still better than digital nomad.
I know I had a point somewhere, so now’s the time to get to it. Over the past year, the whole concept of this thing, whatever you call it, has become normal.
Offices closing up and sending their employees to do what they did before, except this time in their pajamas, is here for good. What was a slow growing trend turned overnight into the way most of us now live, and that’s not a bad thing.
Because if you’re working from home, you see, there’s no reason your “home” can’t be anywhere in the world.
This is something your original digital nomads realized early on. As long as you have internet, you can work from anywhere you like.
— Dan Lawrence (@danlawrence) July 14, 2021
And “anywhere you like” is catching on.
The pandemic all but stopped global travel and tourism. It withered on the vine and won’t be back for a while, at least not to the extent it used to be. Countries with economies reliant on tourism suffered the most, of course.
But they’re figuring something important out:
If the tourists can’t/won’t come, why not do something to attract all those people who found themselves working from home? Why not make it easier for them to change up their “home” from Woking or Wilmington to, say, Barbados or Bermuda? Or anywhere? They’re now remote workers, the world is their oyster.
A veritable legislative gold rush came about.
All over the world, tourism-reliant countries started pumping out digital nomad-friendly laws and issuing remote worker visas, welcoming the type of people they didn’t want before with open arms.
It started with Barbados, spread throughout the Caribbean, southern and eastern Europe, Asia, and elsewhere. Countries are now competing for you to rent out a home in them, plug in your computer, and get to work.
Panama becomes the first country in Central America to initiate a visa for digital nomads and remote workers. https://t.co/ywVzmyfEz1
— CentralAmericaLiving (@VidaAmerica) May 24, 2021
Here in Central America, two countries have passed remote worker bills, allowing digital nomads to live and work in them.
Costa Rica’s passed last week, although there are still details to iron out, and the president still needs to sign it. But it’s a done deal.
El Salvador is on the whole crypto/Bitcoin tip, so it makes sense they’d do something somewhere along the line to get on the digital nomad bandwagon. It’s the type of thing President Bukele loves.
Belize, for its part, identifies itself as much with the Caribbean region than with Central America. Perhaps more so, given language and cultural ties. And the Caribbean islands are tripping over themselves to pass remote worker visa laws. Barbados kicked the whole thing in motion, and right now it’s harder to think of a Caribbean country that hasn’t passed such legislation than has.
But they’re still only rumors about El Salvador and Belize, whispers on the expat grapevine, nothing substantial. Only Costa Rica and Panama are in play right now.
Today the Costa Rican legislature approves a new category of temporary “residency” in Costa Rica, allowing digital nomads to stay for up to two years if they fit the requirements needed.#digitalnomad #remotework #remoteworkers https://t.co/i9ij3DbsNR
— CentralAmericaLiving (@VidaAmerica) July 14, 2021
So let’s talk about remote worker visas in Panama and Costa Rica. Is one better than the other? Time to look at and compare both sets of legislation.
- Pass date: Panama announced the passing of its remote worker visa program (proper name: “Visa de Corta Estancia como Trabajador Remoto” (Short Stay as a Remote Worker)) on May 20, 2021. President Cortizo already signed the law and it’s now in effect. Costa Rica’s remote worker bill (Ley para Atraer Trabajadores y Prestadores Remotos de Servicios de Caracter Internacional (Law to Attract Workers and Remote Providers from International Services)) still needs signing by President Alvarado, and as such is not law yet. It’s passed through both debates in the legislature, so it’s a done deal, just not in place right now.
- Length of time valid for: Panama’s remote worker visa allows you to stay in the country for up to nine months and renew one time for a further nine months if you wish. That works out at 18 months in total to stay in Panama under this law. Costa Rica will allow you to stay in the country for a year, with an extension of a further year – two years in total.
- Minimum earning to qualify: Both Panama and Costa Rica require the remote worker to have a minimum earning threshold of $36,000 per year ($3,000 per month) to be eligible for their remote worker visa programs. Remote workers bring dependents with them need to earn a minimum of $4,000 per month.
- Taxes: Neither Panama nor Costa Rica will tax earnings accrued by remote workers living in their countries under their worker visa programs.
- Administrative costs: Panama’s program carries an administrative cost of $250 to the Immigration Department for processing the application plus a further $50 for your card to show you’re living in the country as a remote worker. That’s $300 in total. Costa Rica has not yet announced what its admin costs will be. They’re still working that out.
- Health insurance required: Panama and Costa Rica both require you to have health insurance to cover your entire time in either country. This insurance can come from your home country. Panama also requires a certificate of good health as part of your application to stay in the country as a remote worker.
- Bank account: Curiously enough, no part of the Panama remote worker bill mentions whether you can open a bank account or not under the new law. However, foreigners can open bank accounts in Panama, although the documentation requirements are more strenuous than they used to be. If you’re only in-country for 18 months max, you’re probably better off with your home country account. Costa Rica’s law will allow you to open a bank account while in-country as a remote worker, although you’re under no obligation to do so.
- Driving license: Both countries will allow you to use your foreign driving license through the duration of your stay. There’s no need to get a Panamanian or Costa Rican license.
Looking at the comparisons above, it’s clear there’s not all that much difference between the Panama and Costa Rica visas.
They’re pretty similar, although we still need more info on Costa Rica’s program. This all become much clearer soon.
If you were choosing between Panama and Costa Rica on the basis of the remote worker visa each one offers, you’d be stuck. At the end of the day you’d look at other factors like expense and lifestyle instead. And that’s a different article altogether.
James Dyde is the editor of centralamerica.com. He lives in Escazu, Costa Rica.