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Does anyone know if this law did indeed change? We are planning on moving down and have three small children. Under the rules described above, we would have to put aside $210K… Thanks, Jerry
Invest the $210,000. A 5% return will give you $10,500 annually which will more than pay for 3 day trips across the border 4 times a year. That way you don’t have to deal with the many rules regarding gaining residency “rentista” status, and you can live there on a tourist visa. You can still own a business, you don’t have to employ anyone, you can own property, and you can collect rents on that property.
Sure, you may not be able to conduct your “business” always following the letter of the law, and I’ve been chided by others in this forum for even suggesting that you can overstay your visa and simply pay a small fine upon exiting the country (though one said his CR attorney advised against it, in which case either I bow to his authority, or wink and nod since he’s just complying with his fiduciary responsibilities of telling you what the letter of the law is without acknowledging that it is widely ignored and rarely enforced – like US rules against being a dual citizen).
However, I would like to make the point that, as is clear to people who know the legal system in Costa Rica, – it’s broken. The constitution, as well as the volumes of national laws and the yet even more extensive collection of administrative rules, is a patchwork of arcane and contradictory verbiage. Show me a business that follows the letter of the law in CR and I’ll show you a bankrupt business. If businesses in the US skirt laws and regulations on a bet that their resulting profits will outweigh the possibility or extent of a fine, then businesses in CR do so in exponentially greater numbers.
This tangled legal and judiciary system, together with the nearly complete lack of enforcement powers of the State, is one of the things that make Costa Rica a “freer” country than the US. I say a Gringo that obsesses about doing everything absolutely “right” has no “business” there.
I’m not saying you shouldn’t talk to an attorney about these things, I’m just saying that you’re not in Kansas anymore. Take it with a grain of salt (and limon).
Come on a tourist visa and find out for yourself. No need to decide your fate today…there’s always mañana.
GT…put very well, you have just put into words what I have personally witnessed going on in Cost Rica among the many small businesses and with friends living in and around Jaco. As they say there is the official policy and the real world policy, NYC is full of such scenarios.
To embellish Gringo Tico’s investment advice a little, if you put your money in a _dollar_ account in a bank in Costa Rica, you’ll earn about 4% per annum. In a U.S. bank account, you’ll earn less.
Either way, the history is that the Costa Rican central bank devalues the colon some 11 – 14% per year, so for all domestic (in-Costa Rica) purposes, your dollar gains both the interest paid by the bank and the deflation effect of the declining value of the colon. Next year, anything you purchase that’s of Costa Rican origin will cost some 15 – 18% less (the interest earned from the bank plus the devaluation of hte colon).
It’s not a bad rate of return and it’s almost risk-free. The only bad things that can happen are that the bank fails (which hasn’t happened in modern times), interest rates fall (how far down can they go?), or the central bank lets the colon float against world currencies. In the latter event, the colon will probably drop farther relative to the dollar and you’ll do better still.
But . . . IF the CR gov’t decides to crack down on perpetual tourists, or they snag you for some other visa violation, they CAN (didn’t say they WILL) deport you and ban you from entering CR for ten years. If that were to happen to someone, what happens then to the business, the property, the other stuff? Comparing renegade companies in the US (such as Enron!?) to running a company in CR on a tourist visa doesn’t seem like a comparable comparison. Personally, I would never take the chance that something could happen to my investment or other endeavors because I neglected to become a legal resident. Seems very pennywise and pound foolish. If any of us move to CR and live as illegal aliens, we have no business complaining about the Mexicans that are flooding across the borders into the States.
Maravilla
I agree 100% with you!! It just seems to me that there are people who will try to get away with something, no matter what country they are in. I put so much effort, time and money into moving to Costa Rica, why would I want to put all this in jeopardy. One reason I moved here to Costa Rica is because of the easy life, and I feel that if Costa Rica accepted me that I should and I WILL follow all the legal ways. I wouldn’t feel bad seeing those who come to costa rica and try to misuse the legal ways, lose their investments and be removed from C.R. This reminds me of those in the United State who say “Use the System” i.e. those one welfare who are still working, who are married etc.
I love Costa Rica and would gladly use one of my boots to kick those individuals out and back to where they came from.
Banco Anglo, a State-owned bank, failed in 1995 after a huge investment scandal. However, the CR government paid off its depositors 100%. They would not have done so if this were a private bank. Only State banks are insured this way. The ones that are left are Banco de Costa Rica, Banco Nacional and BICSA (Banco Internacional de Costa Rica S.A.)
I guess I’m just dense. What, again, is the disadvantage of becoming a legal resident of Costa Rica? It affects your U.S. citizenship not at all. You don’t have the jeopardies associated with being a “perpetual tourist”. It isn’t that difficult (unless you don’t qualify). And it’s not that expensive.
What’s the downside?
There is no disadvantage of becoming a legal resident it only helps you. The problem here is if you want to retire here and follow the rules no problems you only have to show 600 amonth. How ever if you want to become a “perpetual tourist” just remember they can and sometimes do sweeps and if you are caught you can lose everything. If I remember right 3 years ago they did a sweep and deported a lot of U.S. Expats?
This president is like all the other presidents that have not enforced the laws but with his brother pushing hard for change this might be the year for it. Just look they put the laws in writing that took many years to get to this point!
It is true in Costa Rica to run a biz you have to cut corners somtimes how ever my brother in-law can testifie that some laws you can’t side step. He has had the police come knocking on his door for some unpaid taxes.
This is why it is important to try to follow the rules of the host nation. What would happen if a Tico came to the U.S. and over stayed his Visa and worked do you think most U.S. citizens would look down on this? I can tell you they do and the U.S. citizens are trying to deport them! How do you think that the Ticos feel when they see gringos working and not following the rules?If “showing” $600 per month is the requirement then I am the first one in line to get residency and get on with life. My question was concerning the statement that the law had changed and the requirement was going to be showing, in my case with a wife and three children, $210K. Have the requirements for Rentista changed or is it still $60K in a CR bank or proof of $600 per month.
Also, how stringent is the proof of $600 or more per month? I plan on having an income from my businesses of many times that amount. What proof will I need to show? Will rental income backed by a rental agreement work? Will a letter from my CPA or banker stating I have a certain amount coming my way each month from my businesses work? Thanks, Jerry
The $600 a month is the amount one must show to gain pensionado status, and it usually comes from a pension fund of some sort such as SSA or a private pension fund, but you must PROVE you have this money in perpetuity coming to you because the Embassy will check and make sure that those funds are yours. The rentista rules may change — they haven’t yet, but they might next year, and that is where the $210,000 kicks in for two adults and three children. Why should Costa Rica let poor Americans come into their country? We don’t want poor immigrants in America, so I agree that CR should enforce these laws and it should be every expats duty to become legal in their adopted country. I’ve invested a lot of money in Costa Rica and the last thing I want to do is jeapardize my investments by trying to save a few bucks and not spend the $2000 it takes to become a legal resident (which I have already done). I guess some people get away with being the perpetual trousit, but maybe they also have nothing to lose if they get their behinds booted back to the States. An illegal immigrant is an illegal immigrant, no matter which direction you are going if you don’t play by the rules, and try to get away with “something” — I’d like to stay as far away from people with that attitude as possible.
I belive that this last week AM costa rica reported that the law was inplace but it was not enforced yet do to funding. The earlyer post that I had posted showed the link to that article. Tonight I had a chance to talk to a cousin of my wifes that did affirm this since she works in a goverment department that deals with some of these issues.
It was interesting but she also told me about a new tax that will be coming for luxery real estate. The country has never had a tax like this but it is do to the amount of land that is being bought up and not enough tax base from the land. The tax will still be much lower than most taxes in the U.S. Maybe instead of paying 100 dollars a year for property tax it might be a thousand.I agree that if you are investing a lot of money etc…it is wise to follow the rules and become “legal”. I guess I know a few surfer types that don’t have the money to qualify for “legal” status and do the tourist thing, leaving every few months. They have jobs and most have quite a few Tico friends etc..They either work in hotels or teach surfing or take others on surf tours. I have to say Maravilla I’m surprised to hear your hard line stance on this immigration thing”I would prefer to stay away from people like this”. Is that your attitude towards the Mexicans that live in Colorado? I’m not trying to be sassy, it’s a sincere question. Also if you do leave every 90 days for the purpose of staying within the rules shouldn’t you be alright?
My husband and I are well respected and well known in the Mexican community and were often the first call “illegals” made when the coyotes dropped them off in Denver. We’d pick them up, house them, employ them in our restaurants, help them get their papelles. Over an 8 year period we employed 25+ members of one extended family and now we get invited to every big occasion and fiesta they have — the last one we went to was about a month ago — 400 Mexicans and just us two gringos. Those illegals, who are now legal, own their own homes and businesses, some making several hundred thousand $$ a year. I am proud to have helped them realize their dream. The perpetual tourist thing is an attempt to skirt the law, to not be totally respnsible for complying with the rules for longterm residency. I guess people who live the surf life probably are not heavily invested in real estate, etc., so maybe if they got booted out of the country, it’s no big loss to them in terms of losing their investments. They DO do sweeps and have deported people, maybe it’s not an everyday event, but there have been rumors that there will be stricter enforcement of immigration laws. Who knows if that will take place, but the attitude that someone can deliberately defy the laws of residency by leaving the country every 90 days for five, ten, twenty years is an indication (to me, anyway) that there’s very little respect for the host country, which is only a symptom of other attitudes that are contrary to my beliefs.
Lotus, Your friends that are working in hotels and teaching surfing this does hurt Costa Rica! Do you think there might be a Costa Rican that can teach surfing or work at hotels? Just because they don’t have money doest mean that it is wright to take a job away from a Tico.
This is the main reason why the perpetural tourist is damaging and hopfully will one day be delt with a hard hand. It is differnt here in Costa Rica because the size of this country is small and Ticos don’t have the opertunitys that Gringos have in North America. Why don’t these friends work in Cali and teach?
Last night My wife and I watched the new president as he was interviewed by a news station. This is one of the topics that he covered, we were happy to see that he is going to take a harder stance on this subject and is also going to back the Luxury Home tax as well.
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