Living in Costa Rica for an extended period of time requires that you qualify for and establish legal residency. If you also want to work in Costa Rica, you will need a form of residency that permits you to do so. Currently the ONLY form of residency that allows you to work in Costa Rica is Permanent Residency.
Costa Rica offers several alternatives for legal residency:
- a pensionado (pensioner);
- a relative of a resident;
- a rentista (a foreigner with a guaranteed income), an investor;
- foreign government assignment or an international mission;
- representante7executive of a company doing business in Costa Rica.
The pensionado and rentista programs are the easiest methods of establishing temporary residency in Costa Rica.
In 1992, the legislature revoked the tax exemption laws that allowed pensionados and rentistas to bring all of their possessions into the country duty free. Under the current law, these groups are no longer exempt and must pay import taxes on their belongings.
To quality for the pensionado status, one must fulfill three basic requirements:
- prove that one receives at least $600.00 per month from a qualified pension, retirement account or Social Security;
- change at least $600.00 per month from dollars into colones;
- live in Costa Rica for at least four months out of the year.
In order to quality for rentista status, one must fulfill three similar requirements: (1) Proof of US $1,000 per month income for at least five years, guaranteed by a banking institution, OR make a deposit of US $60,000 in an approved Costa Rican bank, (2) change at least $1,000.00 a month into colones, and (3) live in Costa Rica for at lease four months out of the year. Note: You can claim (add) a spouse (additional $1,000/mo) and/or dependants under 18 years of age (additional $500/mo each).
Neither pensionados nor rentistas pay taxes on money earned outside of Costa Rica. Pensionados and rentistas have restrictions as well as rights in Costa Rica. While either may set up their own business, they may NOT work for anyone else. Individuals of either residency status must first become permanent residents in order to obtain a work permit.
Investor status is granted to those who invest at least $50,000 in special projects such as reforestation, tourism and exports, or who invest at least $200,000 in any other business. The investor must also reside in Costa Rica for at least six months out of the year. If there are no problems, the investor may become a permanent resident in two years.
The two other methods of achieving legal residency are atypical, since both are contingent upon very particular circumstances. The resident as a first-degree relative status is the easiest method, as one need only be closely related to a Costa Rican. One with such status has all of the rights of a Costa Rican save for the right to vote. Another method is employment by a foreign government or an international mission.
One popular question is what happens if you marry a Costa Rican. It is really very simple. Once you marry a Costa Rica, you immediately qualify for PERMANENT RESIDENCY which grants all the rights of a Costa Rican save you may not vote. You may legally work in Costa Rica only after receiving your actual permanent residency ID card. The process takes about a year from time of filing.
After three years of living IN COUNTRY (as a legal resident!), you may apply for Permanent Residency. You must also PROVE you lived here, not always simple. Once you apply for this form of residency, the process takes about a year. This may change soon, so always check for current rules.
After seven years of living IN COUNTRY (as a legal resident!) (two years if married to a Costa Rica citizen or five years if you are from certain countries i.e.Spain and some Latin American countries), you may apply for citizenship. You must also PROVE you lived here. Once you apply for this form of residency, the process takes about a year or two. Dual citizenship is permitted for some countries including the USA and Canada.
The interpretation and enforcement of residency laws is constantly changing, often as often as several times per year. Costa Rican residency is like brain surgery… perhaps not best to shop for the best deal. There are HUNDREDS of stories of folks who got mired for years in the process simply because they tried to save 100 bucks.
As stated above, rules and enforcement are constantly in flux, there is just no way I can keep 100% current, so please use hire a competent person to see you through the process.