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Establishing Residency

It is necessary to qualify for and establish legal residency if one plans to live in Costa Rica for an extended period of time. To this end, Costa Rica offers several alternatives for legal residency: a pensionado (pensioner), a rentista (a foreigner with a guaranteed income), an investor, a relative of a resident, or one with a foreign government assigment or an international mission (Lawrence Publication, 1995).

The pensionados and rentistas program has historically been the easiest method of establishing temporary residency in Costa Rica. Keep in mind when receiving advice from current pensionados and rentistas who have been residing in Costa Rica since before 1992, that the laws governing such residency status have changed. 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 of up to 100 percent on their belongings.

To quality for the pensionado status, one must fulfill three basic requirements: (1) prove that one eams at least $600.00 per month from a qualified pension or retirement account or from Social Security, (2) change at least $500.00 per month into colones, and (3) 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) prove that one has outside investments that will guarantee $1,000.00 income per month for five years, (2) change at least $1,000.00 a month into colones, and (3) live in Costa Rica for at lease six months out of the year. Neither pensionados nor rentistas pay taxes on money eamed outside of Costa Rica.

Pensionados and rentistas have restrictions as well as rights in Costa Rica. While either may set up their own business, as discussed below under the investor classification, neither may work for someone else. Individuals of either residency status must first become permanent residents in order to obtain a work permit.

The investor status is granted to those who invest at least $50,000 in special projecs 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.

by Marie C. Wold - Revised January 1998 by Steve Olson and Jose M. Quiros

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