Retiring in Costa Rica: What to Know

Altos Los Robles Valley and Ocean View Luxury Property

Becoming a Costa Rica Resident

You’ve just arrived home from a wonderful vacation in Costa Rica and you’ve fallen in love with the country.

Like many people who come here, you were charmed by the beauty of the landscape, the warm climate, the relaxed atmosphere and the friendliness of the people. ‘Pura vida,’ they say, a common way of greeting people that means: ‘life is good.’ Life is good here, and Costa Rica frequently tops the list of the happiest nations on Earth.

Buying your own holiday property in Costa Rica, or even retiring here and enjoying your own little tropical paradise, is an increasingly popular option for North or South Americans, attracted by the charm of the country and its political stability.

Costa Rica is a small, peaceful country with a population of around 4.7 million. Among these are around 50,000 US retirees, who form a growing community of expats in nearly every town.

Three quarters of the population live in the central valley and the capital of San José, and this area is the focus of economic development and cultural activity. The remaining four fifths of Costa Rica has all the infrastructure and services you will need, in a country that is outstandingly beautiful, with its mountain ranges, volcanoes, streams and waterfalls, pristine rainforests and sandy beaches. Its diverse flora and fauna is protected by more than 10% of the country being designated as national parkland, and it is committed to its successful reforestation program, which has regenerated degraded areas of the country with the planting of over 30,000 trees.

Compared to many neighboring countries in the Caribbean and Central America, Costa Rica has been free of the conflict and upheavals associated with the region. It has been a stable democracy since 1949, when after a brief civil war the government disbanded the army and redirected funding to pay for a better police force, education services, environmental protection and the preservation of Costa Rica’s traditional culture.

Colones

Tourists and Currency

Tourist status allows you to stay in Costa Rica for 90 days, after which it can be extended by traveling across the border to Panama or Nicaragua, staying 72 hours and then returning to renew your application. Many people do this and are able to stay in the country indefinitely.

You are even able to hold a bank account after obtaining the correct documentation from your embassy. However, the government is now considering restrictions on these de facto residents, the so-called ‘permanent tourists.’

If you are intending to buy property and live for a good part of the year in Costa Rica, some form of residency permit is advisable.

There can be considerable income tax advantages of living and working in Costa Rica, and tourists from the US do not need to obtain a visa.

Both the US dollar and the Costa Rican colon are accepted for purchases in the country. Tourists may prefer to use dollars, although many often use both. While many prices on display in the country will only be in dollars, no one will refuse colones if offered. Most long term expats and local people, particularly in rural areas, generally use colones exclusively.

Obtaining Residency Status

There are several different categories of residency in Costa Rica, which are fairly easy to obtain, although because it is such a popular destination the process can be slow.

All documents required for residency applications must be authenticated at home, although applications may be filed after arrival in Costa Rica as long as all these documents are in order. Most applications will be for temporary residence, which includes the designation ‘Pensionada’ or Retiree. United States citizens can obtain this designation by supplying proof of at least $1,000 monthly income, whether from Social Security, annuity or private sector pension.

A ‘Rentista’ or Investment and Income Based Residency can be obtained if the applicant is not officially retired and can prove they have earned at least $2,500 per month for a minimum of two years. Rentistas must live in the country for 4 months annually.

For renewal of residency, both Pensionadas and Rentistas are required to prove that money has been deposited in Costa Rica to the equivalent of an annual income, or £12,000 and £30,000 respectively. For both Pensionads and Rentistas, spouses and children under 25 are considered as dependents without any other income requirements.

Another way of becoming a legal resident is to invest money in Costa Rica and become an ‘Inversionista.’

This requires an investment of $50,000 in tourism or some other business designated as high priority or vital to the economy, $200,000 in other types of businesses, or $100,000 in reforestation programs.

Inversionistas must live in the country for 6 months annually, and can apply for permanent residency after 2 years. Permanent residency can be established either by marrying a Costa Rican citizen and then making an application for permanency, or by first becoming a Pensionada, Rentista or Inversionista and then waiting 2 years before applying. They are allowed to work or own a business in Costa Rica, but are required to reside for at least a week annually in order to maintain their status. After 5 years as a permanent resident, they can apply for Costa Rican citizenship.

Contributed by reader, Emma Jackson

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