Retirees move to Costa Rica because of its nice weather, beaches and landscape, high quality of life, good medical care and affordability. Costa Rica, traditionally the most stable government in Central America, is a constitutional democracy based on the US model. The country managed to avoid the civil wars in Guatamala, Nicaragua, Panama and Salvador, to name a few. Spanish is the national language but English is generally spoken. There is a large North American ex-pat community that provides an accessible social network.
Costa Rica is a popular eco-tour destination for North Americans. Eco-tours include jungle flora and fauna, tropical beaches and bird-watching. Anglers from all over the world come to Costa Rica for a variety of game fishing on the Pacific and Caribbean coasts. The climate ranges from tropical on the coasts to temperate in the central highlands. San Jose, the capital, lies in the central plateau and enjoys spring-like weather most of the year. Several mountain ranges run from north to south, with the highest peaks reaching 3800 meters.
Obtaining immigrant status
To obtain immigrant status, one can either invest or prove a stream of income from a pension or private investments sufficient to support oneself without working in Costa Rica. Permanent residents can manage their own investments and work in companies in which they invested. They may use local health care, which is of high quality and reasonably priced compared to the USA, and is in large part US-trained. Permanent residents under the Resident Annuitants and Resident Pensioners categories pay no income tax in Costa Rica but pay local and property taxes. Retirees may not seek employment or other remunerated activities in the country. Costa Rica recognizes dual citizenship, which is available after seven years of permanent residency. For people from Spain and Central America, the requirement is five years.
There are two basic programs applicable to immigrant investors or passive investors. ‘Resident Annuitants’ and ‘Resident Pensioners’ categories permit people with guaranteed income to become permanent residents. Alternatively, immigrants may invest at least US$50,000 in a variety of projects described below.
The resident annuitants and resident pensioners law
This law – in two parts, Pensionado and Rentista – applies to individuals who can prove a permanent and stable income from investments, pension or retirement plans.
On an ongoing basis, Pensionado and Rentista immigrants must:
- Prove on an annual basis that the required funds were exchanged into local currency
- Reside a minimum of four months in the country per year.
The Pensionado applicant must demonstrate a permanent income stream from a pension or similiar source of at least US$600 per month. Typically, applicants rely upon national pension, or corporate pension benefits.
The Rentista applicant must prove a permanent fixed income of at least US$1,000 per month for a period of five years, from investment income rather than a pension. Applicants must certify the existence of their income stream by bank reference letters, proof of property ownership, or accountant reports. The authorities require a higher income stream due to the perceived less secure nature of the source of income. The investment funds may be held abroad. The sponsoring bank or investment institution must state that the applicant will receive US$1,000 per month in Costa Rica, in a manner that is stable and irrevocable, for at least five years, and that the financial institution will notify the Costa Rican immigration department (Dirección General de Migracion y Extranjeria) if the funds are withdrawn or financial conditions change.
The investor program
Individuals who invest at least US$50,000 in a project which is approved by the Center for the Promotion of Exports (PROCOMER) as a priority investment area, may qualify for resident investor status. Priority investments include tourism, reforestation or other projects in the national interest.
This category involves two different steps. The first is to ask PRO-COMER to determine if the investment falls within the priority area. Once this initial process has been completed and the certification issued, you then begin the permanent residency application process, which is done directly before the Department of Immigration.
If the investment is in a non-priority investment area, then the required investment is US$200,000. Even so, the investment must be made in an approved list of business categories, which include ornamental flowers, leather, spices, processed foods, wood products, mining or production of capital goods. The list changes from time to time; this description is merely illustrative, not exhaustive. Investors must spend at least six months per year in Costa Rica.
Costa Rica offers rule of law, secure immigration status, temperate climate and excellent medical care at very reasonable prices. Many North Americans come to know the country through eco-tours and end up making Costa Rica their retirement home. Pension checks simply go further in Costa Rica. For those who need a dose of North America, there are several daily flights to Miami of about two hours, and most other major North American cities.
Many thanks to Arcelio Hernandez, who took the time to edit this article.