RESIDENCY AND RELATED MATTERS
How to Become a Legal Resident of Costa Rica

People find Costa Rica attractive and want to live in the country for a myriad of reasons: good year-round weather, tired of the rat race and hustle-bustle, a new start in life, inexpensive living and retirement, tax benefits, the country's low-cost health care system, to start a business or invest, to learn Spanish, separation or divorce, to enjoy the country's large expatriate community and even to find companionship. Whatever your motives may be for wanting to move to Costa Rica, there are a number of ways to remain in the country on a long-term basis.

Tourists from North America and many countries in Europe may remain legally in the country for three months without having to apply for legal residency. You may own property, start a business or make investments with no more than a tourist visa.

We know many Americans, Canadians and other foreigners who started businesses as tourists (be aware that a tourist cannot legally work in any company, as in most countries). If you plan to reside in Costa Rica full-time, however, one of Costa Rica's residency programs will appeal to you.

Several residency categories permit you to retain your current citizenship and obtain long-term legal status in Costa Rica. They are pensionado, rentista and inversionista (resident investor). Which program you choose depends on your needs and financial position. Becoming a legal resident will by no means affect your U.S. or Canadian citizenship. Be very aware that residency procedures and requirements can change frequently, so always check for current requirements with the ARCR at http://www.arcr.net.

In March 1992, a change in the pensionado law eliminated many tax privileges retirees had enjoyed since the program started in 1964.

Under the old system, foreigners with official pensionado or rentista (permanent retiree) status were required to live in the country four months a year. They were entitled to the following perks: residency without immigration hassles, all the privileges of Costa Rican citizens except the right to vote and work for hire, and the right to import one of each of the major appliances such as refrigerator, stove, microwave, television, washer and drier, as well as many personal household goods free of taxes.

Pensionados could import a new car every five years duty-free, provided it was worth less than $16,000. In 1992, low taxes on imported cars and duty-free household goods were eliminated. Since then, all pensionados have to pay taxes on their automobiles and household goods the same as Costa Rican citizens do.

These benefits were taken away because everyone saw that they were unconstitutionally giving something to foreigners that Costa Ricans could not have themselves. Incentives will always be used to attract people to less attractive countries, but Costa Rica does not have that problem.

Despite this law, Costa Rica is still an attractive retirement haven. People continue to flock to the country because of its high quality of life, peaceful atmosphere, political stability, fantastic climate, friendly people who like foreigners, excellent business environment and natural beauty. In fact, Costa Rica has more American residents per capita than any other country in the world outside of the United States. They can't all be wrong!

The Costa Rican government has reduced taxes on some cars and other imported goods, making them affordable for most Costa Ricans as well as foreign residents. Consequently, the need for a tax- exoneration program has been eliminated.

If you must have an automobile, you can bring a car from the United States, although because of bureaucracy and high duties it is usually better to buy one here. You can also go to Golfito, the free port in southern Costa Rica, and buy a stove, refrigerator or other appliance without paying high import duties.

The practical benefits of obtaining residency in Costa Rica as a foreigner are very tangible, unlike in some other countries:

1. Access to Social Security continued care.
2. Access to checking accounts and credit service from some banks
3. Permission to engage in labor relationships
4. Freedom from worries about immigration checkpoints and possible deportation
5. Ability to purchase personal and business property and real estate
6. Qualify for citizenship and Costa Rican passport once requirements are met
7. Right to purchase telephone lines

Now let's look at the requirements and specific documents you will need to present to the Costa Rican government if you choose to apply for the pensionado or rentista categories.

A pensionado is someone who lives on a pension (a U.S. Social Security check or permanent retirement program). A husband and wife cannot combine their pensions, but the wife can live under the husband's pensionado status or visa versa. The individual applying can combine pensions to achieve the total required. If the recipient of the pension dies, the spouse can retain pensionado status if the pension is inherited. Some paper work, naturally, is involved.

Here are the requirements for this category:

1. A lifetime income of at least $600 a month generated outside of Costa Rica. Social Security recipients need a certification that can be done at the U.S. Embassy in Costa Rica.
2. A signed letter confirming that you will receive this money in Costa Rica. This is not needed if issued by the U.S. Embassy.
3. A letter from a CPA stating that you will receive at least $600 for life if the pension comes from a company's pension plan.
4. If the money comes from a private company, two letters from bank officials showing that your company is financially sound and that the pension plan has been in existence for at least 20 years.
5. A detailed account of your company's pension plan or a yearly corporate report.

As a pensionado you are obligated to exchange $7,200 a year ($600 per month) for colones at a local bank. You need proof of this to update your file. If you cannot prove that you converted enough money during the year, you can lose your status. You also have to renew your pensionado I.D. card every two years ($100) and reside in the country for at least four months yearly (not necessarily consecutively). As a pensionado you can own and operate your own business but not work. Also, as a pensionado you do not have to pay taxes on your income from outside Costa Rica. After three years you may change to permanent residency status. For the same $7,200 per year you can bring your spouse and/or dependent children.

Rentista is a category designed for those who are not retired or receive no government pension. To qualify for rentista status, you must have an income of $12,000 a year ($1,000 per month) coming from an investment or annuity outside of the country. A good way to do this is to buy a certificate of deposit for $60,000 from a Costa Rican bank that yields a monthly income of at least $1,000 (from the capital). (Under the new law, this amount is higher if bringing your spouse and/or other dependents).

As a rentista, you must prove that this investment will be stable for at least five years. At the end of five years, you have to prove your source of income again or change to permanent residency if possible. Furthermore, every year as a rentista you have to prove that you changed $12,000 into colones and show your passport to prove you were in the country at least four months (not necessarily consecutively).

The safest banks are the public banks, which are the Banco Nacional de Costa Rica or the Banco de Costa Rica. You must keep the deposit of your money for five years in a CD and you may withdraw the interest obtained form it. If you decide to withdraw the principal, then you will be charged a penalty and will also be subject to losing your residency, because the bank is required to notify Immigration if the deposit is withdrawn.

As a rentista, you can own and operate a business but not work for hire. The disadvantage to being a rentista is tying up your funds at relatively low interest. As with pensionados, dependents are allowed for an additional amount of income.

We just heard of a new method for obtaining rentista status from one of our readers. He said: If anyone has to get residency under the rentista category, they can do it by setting up a business in the States if they already do not have one. The business has to hold $60,000 which is to be dispersed over five years. We urge you to check with a lawyer to see if this method will work before trying it.

In brief, to qualify for rentista status, you need:

1. An income of $1,000 per month for the next five years in Costa Rica.
2. Documentation from a bank attesting to income, if the income is from a foreign source. Inversionista is another resident status for people who are not

retired and want to invest in Costa Rica. If you have a lot of money to invest, this might be the best route to go. The government will grant residency under this category if you invest at least $50,000 in high- priority projects such as tourism, $100,000 in reforestation or $200,000 in any other business. No dependents can be included under this category.

The paperwork and requirements are similar to those in the other residency programs, with a few basic differences. Under this program you must reside in Costa Rica at least six months of every year (do not have to be consecutive) and live as a temporary resident for two years. Eventually you may become a permanent resident.

If you plan to start a project, additional paperwork such as a feasibility study and bank references may be needed. If you are going to get involved in tourism, you will need permission from the Costa Rican Tourism Institute (ITC). When investing in an established company, you will have to show the company's books.

Since every circumstance is different and requirements change often, contact the Association of Residents of Costa Rica for a good lawyer to answer your questions.

The following documents are also required for pensionado, rentista, inversionista (resident investor), and all other types of residency in Costa Rica:

Note: All documents usually must be authenticated by the Costa Rican consulate or embassy located closest to the origin of the document (see the list for at the end of the last chapter for the nearest one). The charge is $40 per document. The people at the consulate must affix stamps worth the amount to collect the money. If the documents do not have the required stamps, you can buy them in Costa Rica. Talk to the ARCR before processing documents.

1. Police Certificate  From your local area stating that you have no criminal record. (This document is good for only six months, so make sure it is current.) Required for applicant, spouse, and any children ages 14 to 25. The local police in the applicant's usual residence, if different from the applicant's home state, may issue this report, but the police report usually coincides with the applicant's U.S. driver's license number. This document must also be authenticated by the nearest Costa Rican consulate. Many U.S. state and local law enforcement agencies have websites and special phone numbers to issue such reports, upon request by the applicant.

2. Birth Certificate  Required for applicant, spouse and all dependent children (up to 18 years old or up to 25 if a university student; proof of enrollment is required). This document has to be authenticated by the Costa Rican consulate nearest to the issuer authority of the birth certificate.

3. Marriage Certificate  If applicable. Proof of divorce is not needed.

4. Income Certificate  For pensionados and rentistas (required only for the applicant). Please see the previous sections for specific details. Talk to the ARCR before processing documents.

5. Certified photocopies of all pages of the applicant's entire passport (Not stamped by consulate),

6. Photos  Twelve cédula-size photos six front views and 6 sixprofiles. Do not bring photos, since a specific size is required and passport size will not work. Photos must be matte finish, not glossy.

Translation of Documents: Don't forget that all of these required documents must be translated from English into Spanish by an official translator. Translations from other languages to Spanish have to be either done by the Costa Rican consulate (no one else) in the country where the document was issued or in Costa Rica by an official translator for the specific language to Spanish. The Costa Rican government does not accept translation of the original language to English.

The formal application should have the following information: your mother's maiden name, full name, nationality, passport number, dependent's names, date of entry into Costa Rica, origin and amount of income, address in country of origin or Costa Rica, authentication by a notary public and corresponding stamps.

If you meet the prerequisites for any of the residency categories and have gathered all the required documents, you are ready to apply for your chosen status.

Next, have the ARCR Administration or an attorney present your papers to the proper agency, which will process them in four months or so.

If you want to avoid the many inconveniences of Costa Rica's giant bureaucrazy and save time and money in the long run, we suggest you join the ARCR.

The 2,500-member association has been reorganized and revitalized. It now offers services to all legal residents in Costa Rica, not just pensionados.

A provisional membership, which entitles you to all information and services, costs $100 yearly. Members with legal Costa Rican residency pay dues of $50 per year. Spouses and dependents of members may join for $10 per year as associate members. The ARCR offices are located at Casa Canada, two blocks south of Centro Colón on the corner of Avenida 4 and Calle 40. They will assist you when you need help applying for pensionado or rentista status for $870 for the primary applicant, $425 for spouse or dependent and $195 per child. This includes everything except the deposit to the government of $300 to $400 per person and the consular stamps you must obtain on foreign documents ($40 per document, and usually you need three such documents for an individual, or seven for a couple).

The cost for inversionista or representante status is $1,200 for the primary applicant. These prices are a good deal since many lawyers charge up to $2,000 and take much longer.

The ARCR's Seminar

The ARCR can also help with buying and selling cars, obtaining a Costa Rican driver's license (see chapter 10 for details), assisting with English-to-Spanish translations of any required documents or papers, and making sure your annual papers are up-to-date. The association can notarize all your important documents, help with the renewal of your ID card or cédula, and help you obtain medical coverage with the Costa Rican Social Security System and the new supplemental coverage they now offer (see the section on medical care for details). Should you desire additional information, contact:

Apartado 1191-1007, Centro Colón. San José, Costa Rica.
Tel: 233-8068 or 221-2053 Fax: 255-0061
E-mail: arcr@casacanada.net Website: http://www.arcr.net or http://www.casacanada.net

Note: Some of the requirements for Costa Rican residency may be subject to change. It is highly advisable to check with the ARCR before applying.

To give readers an idea of what the process of obtaining residency is like, here is an account of one person's experience: I handled all my own paperwork in the States. That amounted to following very peculiar procedures in New York State (New York City) for my birth certificate, and only slightly less complicated ones in Pennsylvania for my police report, with all of the certifications, etc. Then I took them all to the Costa Rican consulate and had them certified by the Consul in less than an hour.

I suppose one could go to different consulates for each different document, but it would be a really trying process, as I am sure you are finding out if that's the way you do it. According to the rules, you have to take everything to the consulate assigned to your place of residence in the United States. I lived in south Philly, so New York was the place. In fact, the embassy in Washington said I could bring them all down there if I wanted, when I expressed concern on the phone that I initially had trouble reaching the New York Consul by phone or e-mail.

I had already gone to the U.S. Embassy in Costa Rica for the paperwork to establish an account for my pension in Costa Rica.

When I was done all this, my Costa Rican attorney took me by the hand and led me through the police fingerprinting and Migración. Each step took less than two hours counting lunch.

It is really not a big deal  it is more a learning experience in patience than anything else. All told, it took me about three months start to finish, mostly waiting.

The New Immigration Law - Additional Methods of Obtaining Costa Rican Residency - Cedula Renewal - Immigration and Other Matters - Work Permits - Student Permits - Perpetual Tourist - Extending Your Stay - Leaving the Country - Children´s Exit Visas - Costa Rican Citizenship - Getting Married and Fiancee Visas - Getting Divorced