Some Costa Rica expats are fuming over a proposal to raise the required minimum income foreigners must prove to obtain residency. The proposal, part of a larger immigration reform now moving through the Legislative Assembly, would require retirees to show monthly income of $2,000 a month, up from $600 under current law.
Expats seeking residency under the category rentista would have to show they earn $5,000 a month outside Costa Rica, up from $1,000 a month under current law. Rentista, which means “earner,” is one of 10 categories under which foreigners wouldbe able to apply for temporary residency. The other categories include journalist, scientist, intern, businessperson, athlete, investor and other professionals.
The bill could pass out of the Government and Administration Committee as early as Tuesday, said Natalia Cordoba, a legislative aid for committee president Olga Marta Corrales of the National Liberation Party (PLN). The bill would then face debate on the legislature’s floor.
Immigration Director Mario Zamora, the bill’s principal author, said the requirements would help ensure that foreigners spend money here, contributing to Costa Rica’s economy. Still, he said, he will soon meet with legislative aides and opponents of the bill to discuss the figures.
Ryan Piercy, director of the Association of Residents of Costa Rica, said the new requirements would hurt Costa Rica’s economy. “It affects the amount of investment. It affects the amount of tourism. It affects all sorts of areas beyond whether Joe Blow can’t move here because his pension isn’t high enough,” said Piercy, who plans to lobby against the bill.
“Two-thousand dollars is unrealistic,” he said. “U.S. Social Security (retirement pay) doesn’t reach $2,000 for most people.” The average monthly retirement benefit under U.S. Social Security this year is $1,090, said Yolanda M. York, a spokeswoman for the U.S. Social Security Administration. Still, Social Security was never intended to be the sole source of income in retirement but a supplement to other sources, such as 401(k) retirement savings accounts, Individual Retirement Accounts (IRAs), annuities and pension plans from former employers.
“It’s very easy to reach $2,000 in many areas of the world,” Zamora said. But, he conceded, “$5,000 is very high. We have to see if we can reach a middle ground.” Billy Kingsley, 47, worries that the $5,000 monthly income requirement for rentistas would price him out of Costa Rica. Kingsley, a U.S. citizen, owns land in the southern Pacific beach town of Uvita, and he had planned build a home there for his family. If the proposal passes, he said, he could not afford it.
“We would have to sell the lot and maybe look at Panama,” he said. If Kingsley plans to live off the income from his sporting goods store in Virginia, he would have to apply for residency as a rentista. But if he makes good on vague plans to open a restaurant or shirt store in Costa Rica, he could avoid the income requirements by applying for residency as an investor.
The income requirements are a small part of a proposal to overhaul immigration and modernize its services. The bill would allow foreigners to apply for residency while in Costa Rica, instead of having to do so from their home country.
The bill would also require permanent residents to pay dues to the Caja, Costa Rica’s socialized health care system. Permanent and temporary residents would have to pay a one-time $25 fee to a fund that would principally finance immigration services, the education system and public health.
Some money would also go to the Public Security Ministry, services for foreigners imprisoned here and efforts to promote the integration of immigrants.
