Banking in Costa Rica is not generally associated with offshore tax havens because national authorities cooperate with international agencies to prevent any illicit financial schemes or other financial crimes. In 2006, Costa Rica became the 21st country sign the Inter-American Convention Against Terrorism, which was created to stop the financing of terrorist-related activities including money laundering and drug trafficking.

U.S. citizens—and other foreigners—who live in Costa Rica as residents, students, or workers may have a legitimate need to open a local personal bank account. But it isn't as easy as it may seem, as there are restrictions and conditions that foreigners must meet in order to conduct financial transactions through their own bank accounts in the country.

So how do you get started? Here’s what you need to know to open a bank account in Costa Rica.

Key Takeaways

  • Policies vary by bank as to who can open bank accounts in Costa Rica.
  • Most banks allows foreigners with legal residency status to open accounts.
  • Expats are required to provide identification, a minimum deposit, proof of residency, and proof of income before they can open an account.
  • State-owned Banco de Costa Rica also allows non-resident foreigners access to bank accounts with certain restrictions.
  • Income must be reported to federal authorities as well as the IRS.

Residency

Foreigners have generally been unable to open bank accounts in Costa Rica unless they could prove legal residency. That meant they had to live in the country legally before being able to open and use an account. But as of 2016, foreigners—including those who are not residents—are able to open and maintain bank accounts with Banco de Costa Rica (BCR), one of the country's state-owned banks. This requires a valid form of identification and a cell phone number. Non residents are only allowed to deposit up to $1,000 USD into their accounts each month.

Most banks in Costa Rica, though, have different policies even today, and still require account holders to be legal residents before they can conduct any financial transactions. So it's best to check with each bank to ensure whether foreigners, whether they're residents or not, are allowed to open bank accounts.

Choosing a Bank

Banks in Costa Rica fall into two categories: State-owned or national banks, and private institutions. You can open an account in either category. There are three state-owned banks to choose from: BCR, Banco Nacional de Costa Rica, and Bancrédito. The largest private commercial banks include BAC San José, Scotiabank, and Citibank.

There are some very important differences that separate the two types of banks. The state-owned ones, for instance, guarantee all deposits and typically have many branches and automatic teller machine (ATM) locations—a prime consideration for residents living in rural or remote areas. However, because they are the more popular option between the two, they are also known for their incredibly long lines. 

Private banks, on the other hand, generally have shorter lines and are more likely to employ bilingual staff which, in itself, can be reason enough to go private. They may also offer appealing transactional and cost benefits to Americans with whom they have already established a relationship in the U.S.

Opening an Account

Most banks offer accounts in colones, the Costa Rican currency, or dollars. BCR also offers accounts in euros. A basic savings account represents the most common type of account and it’s also the easiest to open. That said, establishing a bank account in Costa Rica can be a laborious process, largely because of the huge amount of paperwork involved. Requirements vary among institutions, but they generally revolve around the following:

  • Identification (ID): Costa Rican banks require all resident foreigners to present their DIMEX ID card—issued by the immigration department—if they wish to conduct any banking transactions. Tourists, on the other hand, may simply present their passports, and may only be eligible to open an account at certain institutions. 
  • Minimum Deposit: This depends on the type of account, but savings accounts usually require at least $25 USD or 5,000 Costa Rican colones.
  • Proof of Residency: You need to present a physical document such as a utility bill or lease agreement that states your local residential address.
  • Additional Forms: A local policy called “Conozca a Su Cliente”—Know Your Client—requires that any U.S. citizen with a Costa Rican bank, both individual and corporate, verify and update personal information every year. Various tax forms may also be required to inform the Internal Revenue Service (IRS) of offshore bank accounts.

Anyone opening an account at most Costa Rican banks must also provide proof of income. This is to ensure the funds used by account holders come from legitimate sources, and that consumers are complying with federal regulations by not laundering funds, financing terrorism, or trafficking drugs. Salaried employees need proof of income from their local employer, which may include a letter and/or pay stub. Independent contractors need to produce a letter or certification of income from an accountant. Other foreigners may also present proof of their assets from American banks.

Anyone who opens a bank account in Costa Rica must provide proof of income.

As noted above, foreigners, including those who aren't residents, can open an account with BCR. They must have legal status within the country, a valid passport, and a cell phone number. The bank also gives consumers the option to open accounts online, after which they receive their account numbers by email or text message.

Reporting Your Income

Costa Rica’s income tax rules must be observed by Americans who reside there, and U.S. citizens living and working abroad must report all worldwide income to the IRS on their tax return. Very costly penalties can apply if your income is not reported correctly. (See also: The Tax Implications of Opening a Foreign Bank Account.)

It is possible for U.S. nationals to avoid double taxation on foreign-earned income through the foreign earned income exclusion and foreign tax credits. However, a tax return must be filed with the IRS to qualify for these benefits.

The Bottom Line

Once you’ve decided between a state-owned and private banking institution, opening a bank account in Costa Rica should be pretty straightforward as long as you meet all of the eligibility criteria.

While the banking system itself is fairly standard, procedures can be relatively slow, so it’s a good idea to practice patience. Customers are also advised to refrain from visiting branches and ATMs on local paydays to avoid even longer-than-usual lines. And remember, any American generating income in Costa Rica must closely observe both local and U.S. tax-reporting rules.