Retire in Costa Rica Pt. II
a) $600 per month pension from an approved source. This amount is required for each applicant and every year you are required to produce a proof of this income. Additionally, you must spend at least four months per year in Costa Rica.
b) Speaking of which, North Americans can stay in Costa Rica legally for up to 3 months. They must then leave for a period of 72 hours, they can then return to the country for another three months. Tourists can own vehicles, property, and business and generate income from self-employment.
For many of us, that is more than enough to kick back and enjoy the sunset. But if you’re dreaming bigger than just staying in-country for four months at a time, you’ll want to obtain residency status. There are other alternatives to retiring in Costa Rica and obtaining legal residency:
– A rentista (a foreigner with a guaranteed income),
– An investor, a relative of a resident, or if associated while doing a foreign government assignment or an international mission.
– A representante: a person who is an executive of a company doing business in Costa Rica. Let’s take a look at what’s involved in each:
(a) Rentista Status
This status is suitable for you if you have a stable income of at least US $ 1,000 monthly or US $ 12,000 yearly, typically coming from interests or dividends. An approved financial institution must certify that:
– For a minimum period of five years you will receive such income from a permanent bank account and that you will exchange your funds into Costa Rican currency.
– In case the applicant’s financial situation changes, the financial institution will automatically notify the Costa Rican Tourism Institute (ICT) about these changes.
– The monthly income will be paid directly to the applicant in Costa Rica.
– The funds will be paid in the name of the applicant.
Notice the difference here isn’t just having the money coming from an approved source. You can be a pensioner and pull your money out of an ATM. The resident has to have that money in a Costa Rican bank.
A deposit of US $ 75,000 in a government-approved bank will also satisfy the financial requirements for this type of residency status. Deposits in state-controlled banks are fully protected by the Costa Rican government; bank interest is usually tax-free.
Every five years you have to provide proof of income. Under the Rentista Status it is also required that you spend at least four months a year in Costa Rica.
The Rentista-Status equally permits residency for your accompanying spouse and children under age 18 (or under age 25 if enrolled in a university).
(b) Inversionista (investor) Residency Status
– Investment of US$50,000 in approved sectors such as tourism or export, $100,000 in reforestation, or $200,000 in any other business.
-Must remain in country at least 6 months per year
– Cannot claim spouse and dependants under 18 years of age.
– Income allowed from the project. Can own a company and receive income.
(c)Representante (representative)
– Applicant must be director of a company meeting certain requirements, such as employing a minimum number of local workers as established by the labor law, with financial statements certified by a Public Accountant.
-Must remain in country at least 6 months per year.
– Cannot claim spouse and dependants under 18 years of age.
Can earn an income from the company.
– Can own a company and receive income.
The cost to process residency is approximately $870 per family head plus $425 for dependant spouse and $195 per dependant child.
1) Residency renewals are usually every second year. General conditions for renewal are 4 months residence in Costa Rica, the required amount of monthly income was changed into Costa Rican currency or that the terms of the investor residency are met.
2) Physical presence in Costa Rica for a minimum of 4 months each year
3) Renewal of residency identification card (carnet) every two years. The government of Costa Rica charges a US$100 tax for each renewed identification card.
4) You and your dependents cannot earn a salary or supplant a Costa Rican in a work situation. You can own and operate a business and pay yourself, and/or make investments.
As a resident in any of the manners in which we just outlined, you can enjoy several perks. Among them health care and free schooling:
– The health care system is excellent. There is a plan for citizens and residents who have work permits covering medical care, hospitalization and prescription drugs. Citizens are also covered for dental care. This is funded by employers contributing 22% of wages paid, and the employee contributing 9%. There is also private medical insurance which is inexpensive and covers 80% of medical costs. Medical care costs are very low compared to North America. There is an ambulance service in almost every town in the country, operated by the Red Cross. There is also a wide choice in dental care. No special shots are required to come to Costa Rica.
– There is a free education system for all, through high school. The official literacy rate is over 93%. There are many universities and technical training schools. Many university students have their tuition paid by grants. English is taught in the public school system but the main language is Spanish. There are excellent bilingual and trilingual schools available with a principal language of English, French or German. Some schools are on the North American school year.
Once you get the issues regarding residency knocked out you’re off and running. The only thing to do now is decide where you want to stay. On the coast? In or near one of the big cities? Inland and away from the crowds? It’s not for me to say, all I want to emphasize is go about planning your retirement in the right way!
