On March 15, 2023, the President of the Republic of Costa Rica signed the Regulation to the Law of Attraction of Film Investments, which aims to establish the operational provisions related to the Law of Attraction of Film Investments in Costa Rica number 10071 and thereby, facilitate and promote the arrival of projects of this industry to our country.
It is important to emphasize that the Regulation establishes that film activities must be understood as the pre-production, production and post-production of audiovisual products defined in Article 3 of the Law.
However, with the entry in operation of the Regulation, which is awaiting publication in the Diario Oficial La Gaceta, the benefits stipulated in the Law are enabled, so that investors in this sector can start the application, such as:
- Exemption from income and sales tax.
- Refund of any tax on the permanent importation of goods into the national territory for the performance of film activities.
- Exemption from all taxes, levies, fees or contributions on temporary imports of equipment, tools, spare parts, costumes, makeup, scenery and technical material required for the realization of the project.
- VAT refund.
In addition to the foregoing, persons or legal entities not domiciled in Costa Rica, as defined in the Law and in accordance with Article 2 of Law No. 7092 of April 21, 1988, known as the “Income Tax Law”, either as producers or as co-producers with individuals or legal entities, who carry out specific film or audiovisual investment projects duly approved by the Foreign Trade Promotion Agency of Costa Rica, are considered as a beneficiaries of the incentives of the Law.
In this order of ideas, it is established that, in order to obtain the benefits, each Film or Audiovisual Investment Project must be carried out totally or partially in Costa Rica, that is, with physical presence in the national territory. For this purpose, the projects must be structured and executed for determined periods of time, which must be defined by the investor, and which may be renewed if required by the needs of the project.
Also, the Regulation establishes the process to be followed by foreigners who need a migratory status of stay for the realization of film or audiovisual investment projects, which will only be granted for a non-renewable period of one year.
Moreover, another series of benefits are established, such as the facilitation of procedures before local governments, which seeks, through the simplification of procedures, to have an integrated permit for all those authorizations or requirements necessary in the case of audiovisual filming in public spaces or on public property under their jurisdiction.
Finally, this is an excellent opportunity for the growth of the audio visual sector, encourage foreign investment and nearshoring in the country. From the Corporate Law team of Facio y Cañas, we invite you to allow us to accompany, support and assist you in all your requirements with the entry into force of the Regulation, through legal advice with extensive experience in the field.
Rolan Muñoz
Paralegal Facio&Cañas
