Rules for Residency Reviewed

Becoming a resident of Costa Rica may soonbecome difficult for foreign retirees who aren’twell-to-do by this country’s standards.A bill being discussed on the floor of theLegislative Assembly could make residency statusunattainable for foreigners without a pension of$3,000 a month, or unwilling or unable to invest atleast $50,000 in the local economy.This is a price too high for most foreigners from theUnited States, Canada and Europe to pay, according tothe Association of Residents of Costa Rica (ARCR).If the bill passes when it comes to vote in the comingweeks, the number of foreigners who call Costa Ricahome could dramatically decrease, said ARCRspokesman Ryan Piercy.MOST disconcerting, according to Piercy, is thebill’s elimination of the category of residente rentista.Many foreigners become permanent residents of CostaRica through this category, which under current law isopen to anyone able to prove they have a continuoussource of income from abroad of at least $1,000 amonth.People who do not come to Costa Rica for work orstudy can also obtain residency as pensionados (retirees) or inversionistas (investors).Under the current law, pensionadosmust show proof of a retirement or disabilitypension of at least $600 a month (TT,April 30). Inversionistas must invest atleast $200,000 in local businesses thatemploy Costa Ricans. The amount isreduced to $100,000 for agriculture-relatedinvestments and $50,000 for investmentsin tourism or import-export businesses.The Immigration Department considersthe current law a “vulnerability in thesystem,” and supports the bill’s changes,said Immigration Director Marco Badilla.“IT is not that less foreigners willcome, it’s that the residente rentista is avery easy door for whatever person tocome in the country, a person who only has$1,000. We have people come who do nothave good intentions, and want to takeadvantage of our system,” he said. The billbeing evaluated by lawmakers touches nearlyevery aspect of the country’s immigrationpolicy, and overhauls an outdated law,Badilla said.In addition to eliminating the rentistacategory, the category of pensionadowould fall under regular immigration law –rentista and pensionado are now regulatedby a separate law. This means specific regulations,such as the minimum pensionrequired for retirees, would be decided bythe Immigration Department and couldchange every three or four years.“I would say (the minimum monthlyrequirement) would not be less than$3,000. Maybe a little less, maybe a littlemore, but to me it seems it shouldn’t beless than $3,000” Badilla said. “Right nowit is $600, and this is very low.”THIS income requirement is farabove the pensions of most retired people,Piercy argues.“Where is Costa Rica going to havepensionados coming from?” he asked. “Asfar as I have seen, the two highest pensionsin the world are the United Statesand Germany. Under (U.S.) SocialSecurity, the maximum a person whoretires at age 62 can earn is $1,442, at age65 it is $1895 and at 70, $2580.”These figures are based on a maximumincome of $87,000, Piercy said.Many people do have the financialcapacity to live in Costa Rica, but do nothave the pensions. Businesses owners,doctors and people who left work earlybefore receiving retirement will all beaffected if the new law is passed, accordingto the ARCR.MORE than 11,000 foreigners residein the country as rentistas or pensionados,according to Badilla. However, computerizeddata is not available, so theImmigration Department can only estimatethat one-third of those are rentistas.While the legal status of those alreadyhere would not change with the new regulations,the new, more selective policycould rub both potential and current foreignresidents the wrong way, Piercy said.North Americans and Europeans lookingto retire in the tropics will instead lookto Nicaragua and Panama for relocation,the ARCR contends.Foreigners can apply for residency inNicaragua under similar categories asthose now available in Costa Rica. Ingeneral, the minimum monthly incomerequirement is $500 for a single personand $600 for a couple.While requirements are easier, the systemis considered confusing to newcomers(TT, May 21). However, in recent monthsNicaraguan immigration has been goingthrough a process of “modernization andrestructuring.”PIERCY said it is Costa Rica that willsuffer if the new immigration law is passed.Once here, residents not only buy cars,homes and other goods, they also contributeto the social economy by gettinginvolved in organizations, often offeringexpert advice, he said.They also act as ambassadors of CostaRica with friends and colleagues aroundthe world, he added.Before making more serious investments,foreigners often use their status asrentistas to study possible investments,according to the ARCR.“Many people don’t think of investingright away, before they have lived in acountry for awhile, and get to trust it,”Piercy said.The ARCR has asked deputies to makemotions to remove the elimination of therentista and pensionado category from thebill before it is voted on.According to calculations by the CostaRican Tourism Institute (ICT), the averageannual revenue generated by pensionadosand rentistas is $13 million, Deputy EdwinPatterson, from the Citizen Action Party,told The Tico Times in a faxed response toquestions.MEANWHILE, Badilla says he is notconcerned about the loss of economic benefitswith the removal of the rentista category.“If we have only 4,000 residentes rentistas,the impact isn’t going to be thatbig,” he said.Beyond changes to residency requirements,the 60-page bill addresses a widerange of issues including national security,displacement of the national workforce,and when and where authorities can searchfor undocumented workers. The bill is subjectto four rounds of motions and potentialchanges before it is voted on.(Tico Times reporter Tim Rogers contributedto this report from Nicaragua.)