Is It Really Worth the Trouble and Expense to Obtain Costa Rican Residency? Take Two (Part 1)



This is a rewrite of a previous post on this topic. At first, I thought I could just re-tweak the original, but as often happens in Costa Rica, things change quickly and substantially. Many of the principles of the first post remain but the devil is in the details as someone once noted.

Part Two of this topic is here.

Ways to Get Residency


This post is meant as an outline, not an in-depth discussion of all the ways you can get residency, which you can easily find from other resources. I eagerly invite corrections from those with more knowledge or experience in the comments.

Get Ready to Enjoy a New Country


Residency by 1st Degree Relation to a Citizen (aka Vínculo)


Marrying a Tico/a or having a baby here is probably the most straightforward way to get residency. In fact, you’ll basically get Permanent Residency from the start.

In the case of marriage, you’ll have to wait up to 4 years for it to become final. There will be a 2-year wait period to confirm the marriage is legitimate plus 18 months for Migración to process residency or 2 years by TSE if you are going for citizenship. Those wait times are official by a new law enacted in March 2018.

Rentista


This is the worst way, in my opinion, but often the only practical alternative for people who don’t qualify for the other forms or residency. Why? There’s a steep income requirement, $2,500/month and that’s per individual. You can’t bring in dependents on your application.

The money also has to be deposited in advance in a Costa Rican bank 2 or 3 years (not sure which anymore) ahead typically as CDs. You have to convert that much into colones each month (keep the receipts!) although you don’t have to spend it all of course.

There’s another reason while this style of residency is really bad having to do with the requirement to sign up for the national health plan. More on that below …

Pensionado


This one only requires $1,000/month and you can bring in dependents (spouse, kids) on that. The catch of course is that the income must be for the rest of your life. Typically this is covered by Social Security or some other pension.

In our case, when the income requirement was just $600, we did it by buying a lifetime annuity since I was only 53 at the time.

By Investment (Inversionista)


Used to be that you could get residency in this way only through pre-approved projects, usually ones that helped the environment like re-forestation. Those still exist, and the investment level is $100,000, but it is rarely used, which tells me it's a hassle. Recently, they opened up inversionista to investments in businesses and real estate including your own domicile.

One catch is that it doesn’t matter what you paid for the property/business but what an official assessment says it’s worth. The minimum is $200,000.

Residency Costs


I’m not going to detail all costs, but they first involve acquisition of documents such as birth certificates, marriage certificates and a police report from your home country, all with an apostille.

Used to be for U.S. citizens that a “local” police report from your state of residence would suffice but now it must come directly from the FBI and carry an apostille from the U.S. Sec’y of State.

If your Spanish is passing, you accomplish all the filing yourself, but I preferred to use a lawyer with experience in obtaining residency for expats as I have a low tolerance for bureaucratic BS, which Costa Rica can supply in great abundance. Done yourself, you could probably do it all for well under $1,000. With a lawyer, I estimate at least double that.

Keep in mind that obtaining Costa Rica residency is, in general, more expensive that most other Latin American countries.

The Wait for Residence and the Comprobante Catch-22


All residency methods take time. Just last March a revision to residency laws now allows Migración to take up to 18 months to process applications and you can bet they will take advantage of that.

The good news would be that once you receive your “comprobante”, which is a document showing that all your paperwork was accepted and in-process, you technically could avoid border runs every 90 days, but there’s a Catch-22.

By law, even when you receive the comprobante you are supposed to leave / re-enter the country every 90 days, but Migración has an administrative rule that says not to cite anyone for remaining past 90 days. They don’t want to police that for someone who is 99% sure of being a resident.

The catch, however, is that a separate change in traffic law a few years ago now makes staying in country more than 90 days impractical. That change says you can use your foreign driver’s license for 90 days but you cannot get a CR driver’s license until you have residency.

Damn! That’s only not a problem if you don’t plan on driving.

Moving from Temp to Permanent Residency


In most cases, your initial residency is in the temporary residency class, which means you have to renew every 2 years and go through the income requirements again, if any. I don’t know what happens in the case of, say, a residency based on investment. Perhaps you have to re-certify the investment value?

However, after holding any temporary residency for at least 3 years, you can apply for Permanent Residency. In fact, you can apply for PR early if by the time it is approved you will have had residency for 3 years. A lot of expats here don’t realize this option is available to them, but it’s a smart move.

BCR Renewal is Pain-Free


PR is “libre condición” meaning it is free of the conditions of temporary residency.





Benefits include:
  • You only have to physically reside in the country for one day each year.
  • There is no income requirement, so you can renew at a local Banco de Costa Rica branch for about $125.
  • No docs with apostille are necessary.
  • First renewal is in 2 years, second in 3 years and finally you only renew every 5 years.
  • It comes with a work permit (probably not terribly interesting to retirees).

 

What Costa Rica Residency Does Not Get You


Costa Rica residency, otherwise, does not include the many benefits other countries offer such as discounts on goods and services, fast processing, low income requirements, the ability to bring in household goods duty-free, etc.

It does get your through CR passport control faster (usually) as you can use the citizens line. The signs at passport control are ambiguous on that point, but I always use the citizens line and am welcomed by the officer.

Does Residency Limit You?


Besides occupancy and work limits, in terms of freedom of lifestyle, residency actually puts you into a bit of a box in that once you are invested in it and before you *really* know if Costa Rica is right for you (which could take years), you may be discouraged to try a different country.

The Potentially Costly Medical Insurance Requirement


A standout requirement of CR residency is that you must sign up for and keep current enrollment in the universal health plan issued by the Caja Costarricense de Seguro Social or CAJA for short (cah-hah). This became a requirement by our first residency renewal but it’s required for all new residents now.

I’m not getting into judging the CAJA here, that’s an entirely different post or two. Suffice it to say it has its pluses and minuses. If you think of it as mainly emergency care, it’s a decent deal in my opinion and there is plenty of affordable health care backup in the private sector.

The relevance for residency is that you will pay, on a sliding scale, a percentage of your “declared” income, which is usually whatever you needed to qualify for the residency of your choice. They haven’t yet started requiring, say, SS benefits statements, but I see that coming in the future.

See the figure here for the exact monthly contribution rates.

Current Contribution Rates to Costa Rica Health Care System
 
Those rates are either for a family (e.g., under pensionado residency) or per individual (e.g., under rentista). Now you can see why rentista is a really poor choice cost-wise. They will take the required monthly $2500 for rentista as your income and you’ll pay 9% of that per month to be a member of the CAJA. $225/month for a single, $450/month for a couple.

Ouch!

Perhaps by U.S. standards that seems reasonable for a health plan without deductibles, no co-pays and free prescriptions, but simply put, access is the problem and, again, not going into that right now.

One way to deal with this is to rationalize it away as a tax and your solidarity contribution to the health  of Costa Rican citizens and residents all over the country. Personally, a CAJA contribution that high would alter our lifestyle negatively.

The Alternatives to Costa Rica Residency (Besides “Expating” Somewhere Else)


This post on residency has already extended further than I’d imagined, so I’m leaving the alternatives discussion for another post. I promise it will come shortly. In that one, I’ll discuss the “perpetual tourist” option and becoming a citizen.

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Thanks so much for your comment! - Casey