The Long Road To Residency in Costa Rica

Featured Columnist – Retirement & Living Kat Sunlove

Living in Costa Rica is a pleasure, but the path to becoming a legal resident here is anything but. Not only are the laws written in Spanish, but the rigorous process itself is complicated, confusing, and fairly costly. Without a sense of humor, parts of it can be a royal pain. However, the benefits outweigh the difficulties and the lessons I learned in gaining legal status here may be of value to anyone considering a permanent move to this beautiful tropical land.

When my husband, Layne, and I started the procedure last spring, we got an earful of horror stories: lost paperwork, problems with language or translations, bewildering or contradictory instructions from bureaucrats, unresponsive or even dishonest attorneys — all resulting in long waits for that cedula, the residency identification card. We heard of expats being on hold for two years or more without a final disposition of their application. One couple told us that they paid their attorney’s fees upfront, only to find months later that the attorney had yet to take action on their application. Hardly an example of pura vida.

Along with the horror stories, we experienced another disheartening bump on our path to residency – the new residency law that had just gone into effect on March 1, 2010. The administrative rules for implementation of the changes in the law were going to be delayed until the new president was inaugurated (an event over a month away) and her cabinet officers in place (which would take even longer). During this time period, even veteran immigration attorneys were confused and poorly informed as to how to comply with certain provisions in the new regulations. Today, eight months later, many details of the new law still remain unclear.

Legal residency is important, however, for several reasons. The primary reason being that until you have authorized residency status, you are considered to be on a tourist visa and must leave the country every 90 days for at least 72 hours before you can return. Many people travel to the nearby countries of Panama or Nicaragua for a few days — a nice holiday, no doubt, but a trip every quarter can become a huge expense. Those who stay in Costa Rica without residency status, either ignoring the requirement to leave or repeatedly departing the country at three-month intervals are considered “perpetual tourists”, and the new law was designed in part to crack down on this practice by imposing stiff fines on those who overstay their visas. Repeated violations can result in expulsion from the country and even a prohibition on returning.

Another benefit as a legal resident is being able to join the Caja Costarricense de Seguro Social, known as CAJA (pronounced kah-zjah), the excellent national health insurance program. You also qualify for certain kinds of land ownership and eventually for citizenship, if you wish. Many businesses even offer residents a discount for entertainment such as a round of golf.

There are several types of residency, each with differing requirements, but I’m going to focus on pensionado or retiree status. For most expats planning to live primarily on Social Security income, pensionado would be the most likely choice. Pensionado is a “temporary resident” category and after three years, you can apply for permanent resident status.

The requirements are fairly straightforward:

• A minimum lifetime guaranteed income of $1000 per month from a qualified pension plan. Usually this is from Social Security, but it could be a state or local government pension, school district retirement plan, or an annuity. The qualified pension plan must be payable for life. If married, you can claim your spouse under the same monthly income.
• Costa Rica does not recognize same-sex marriages, even if that union is legal in the couples’ home country. Thus, each person would have to meet the income requirement.
• You must reside in Costa Rica for at least 121 days or four months per year. These need not be consecutive days.
• You are prohibited from taking a job with a Costa Rican company, other than in a few very rare exceptions.
• You can own a company and receive income from the company profits.

One change as a result of the new law is that the application for residency can now be initiated in your home country, rather than only in Costa Rica. If you plan to file your papers yourself, this may be a valuable adjustment. In our case, we were living here in Costa Rica and in talking with other expats (or Gringos as we are fondly called), we learned that with the right attorney the whole process can be made much simpler with a higher likelihood of a positive outcome. So our first task was finding that attorney. Because we were going to invest our hard-earned money in this application process, we felt a need for due diligence in selecting a professional to help us. Through the advice of many of the residents in my town, we found an attorney with an excellent reputation.

During the first meeting with our attorney, it became apparent to us why she enjoys such a fine reputation. A native Costa Rican, she was very professional, highly organized, spoke excellent English, and maintained a good relationship with Immigration (which turns out to be quite important in these matters). She immediately offered us a clearly written (in English) outline of the entire procedure – from the first fingerprints to the final receipt of the cedula. Her fees were a bargain by U.S. standards and were broken up into three payments, the final payment not due until our residency was granted. She also worked with a written legal contract, spelling out exactly what we should expect of her and what documents she would need from us. In spite of the inevitable confusion surrounding the new law, which had just gone into effect when we retained our attorney, she managed to stay apprised of the evolving interpretations and advised us accurately throughout the process.

In conclusion, my advice for obtaining residency status in Costa Rica is to hire a good attorney. Get references, talk to people, insist on a written contract, never pay all the fees upfront, and double-check the information your attorney gives you against any number of useful websites on the subject. Then follow that attorney’s instructions to the letter. There are timeframes and certification requirements that must not be ignored. I’ll go into some of those in my next column. Until then, start daydreaming about the wonderful life that can be yours as a pensionado in Costa Rica!