Published by Jason LaFlesch on 25 Apr 2008 at 03:53 pm
Retiring in Costa Rica
5 Responses to “Retiring in Costa Rica”
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David W on 28 Apr 2008 at 8:05 am 11
It looks as if the monetary standards to become a Pensionado ($600/mo) is less than that of a Rentista ($1000/mo). Furthermore, it looks like my wife and I could both be covered by the $600 as Pensionados while we’d each have to show $1000/mo to be Rentistas. Es verdad?
Is one easier to get than the other?
Is it easier to go to permanent status from one or the other?
billdeegan on 28 Apr 2008 at 11:56 am 16
We are asked continually about the qualifications for applying for residency in Costa Rica. There are several ways for a person to qualify for residency. The most popular for people who have reached retirement age is to apply as a “Pensionado”. As a pensionado you only have to show $600 (US) a month in income from a permanent source such as a pension or a government social security system. You must remain in the country for at least four months out of the year. You can claim your spouse and dependants under the age of 18. You cannot work as an “employee” but can own a company and receive income through your company.
If you have at least $600 a month in income this is the easiest way to go. If you haven’t yet reached retirement age, you may wish to apply as a “Rentista”. As a rentista you have to show $1,000 a month from investment sources and the investment source needs to “guarantee” that income. Another way to qualify as a rentista is to deposit $60,000 (US) in an approved Costa Rican bank. $120,000 for you and your spouse. You must remain in the country for four months out of the year. As with a pensionado, you can’t work as an “employee” but can own a company and funnel earnings through your company.
The third way to obtain residency status is as an “Inversionista”. This requires an investment of $200,000 in any business in Costa Rica. Lower investment amounts may be required in certain government approved sectors. You should check with the Costa Rican Embassy on that one as the definition of approved sectors changes.
You may also qualify if you are a “Representante” of a company meeting certain requirements such as employing a minimum number of local workers as established by the labor law. This is how executives of the Fortune 500 companies located in Costa Rica usually obtain residency. As a representante you must stay in the country for at least six months. You can earn income as an employee and you can also own your own company.
You can easily become a citizen of Costa Rica buy marrying a Tico or Tica. After a two year waiting period you can apply for citizenship and must be able to prove you live there. The immigration process takes about a year.
A lot of people ask us if they have to give up their American, Canadian or other citizenship to become a legal resident in Costa Rica. The answer is no! You still keep your original citizenship.
I always urge our Costa Rica buyers to join the Association of Residents of Costa Rica. They have a great menu of benefits and can guide you every step of the way. Visit their web site at http://www.arcr.net.
Heather Dopson on 28 Apr 2008 at 12:15 pm 19
Costa Rica offers several alternatives for legal residency. Some of the different types are:
- a pensionado (pensioner),
- a rentista (a foreigner with a guaranteed income),
- an investor,
- representante (a person who is an executive of a company doing business in Costa Rica).
Many restrictions apply.
The pensionado and rentista programs are the easiest method 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: (1) prove that one receives at least $600.00 per month from a qualified pension or retirement account or from Social Security, (2) change at least $600.00 per month from dollars 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 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 other methods of achieving legal residency are atypical, since they 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.
After two years of living IN COUNTRY, you may apply for citizenship. 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.
The common types of residency are shown here. For specialized cases, such as student, work visas, temporary visas, diplomatic or political status, refugees or others, you should consult ARCR (Association of Residents of Costa Rica http://www.arcr.net/).
David W on 01 May 2008 at 2:38 pm 31
Thank you Bill and Heather.
Two (more) questions:
1) Bill said a rentista needed to be in-country 4 months out of the year (which is what I read elsewhere) and Heather says 6 months… which is it currently?
2) Next, as far as the currency conversion requirements are concerned, is that for the months that you are there or for the entire year? For example, if we were rentistas, would we each need to convert $1000/mo for the months we were there (at least 4) or would we need to each convert $12,000 for the entire year?
Heather Dopson on 07 May 2008 at 10:07 am 32
David-
Great to see you and your daughter at the seminar on Saturday!
1. Bill is correct on this one, 4 months is the requirement for both rentista & pensianado. I mis typed it.
2. The currency requirements are per year, not just the months you are in the country.
Keep in mind that these requirements can change. Your absolute best bet on keeping up with the requirements is to keep in touch with arcr.net!
Take Care,
Heather