The Costa Rica government is planning to increase tax on foreign investors who seek to transfer profits overseas, in an attempt to discourage capital inflows.

The government presented a new law to Congress on Monday that will raise tax on foreign investors transferring profit, at a rate up to 38 percent from the current 8 percent.

Further, the bill proposed banks with foreign clients to deposit up to 25 percent of their foreign investment with the central bank.

The new measure came after the currency Costa Rica colon strengthened notably as higher interest rates attracted funds from developed economies.

RTTNews