Chapter 14 Residency Issues
Right now is a time of confusion in the arena of
residency. At the current time, this
country’s policies are in a state of flux, so it is a little hard to say
exactly what the rules will be next year, for instance, let alone what they are
today.
The problem is that at the very end of the previous
administration, a very controversial residency law was passed, with a delayed
effective date in August of 2006.
Many groups in the country vehemently opposed portions of
this law, and then presidential candidate Oscar Arias let his opposition to
that law be known in no uncertain terms, and promised to pass his own version
if elected.
Arias won that election by a very thin margin, and took
office in May of 2006, just 3 months before the new law he opposed was
scheduled to go into force.
As a side note, at the end of the previous administration,
immigration officials began writing new regulations to administer the new law,
and relations between the outgoing administration and the incoming one on this
issue were hostile. The outgoing
administration simply said “if Oscar Arias doesn’t like this law, he can change
it once he takes office,” and moved full steam ahead in its plans to implement
it, which is bound up in the policies and procedures that the immigration
department sets up to enforce the immigration laws.
Needless to say, the outgoing administration never complete
writing the implementing rules for the new law, and when Arias came into office
the second week of May of last year, he put a stop to all of those implementation
regulations the previous administration had been working on, and announced that
he was going to submit his proposed changes to the Legislature “soon.”
Well, “soon” became more like the Hollywood
minute, and Arias submitted his proposed changes too late for them to go into
effect let alone be passed before the new law went into effect.
So, due to these snafus, when the new law went into effect,
this country went into a literal no man’s land as far as immigration was
concerned. When you add this to the fact
that the previous administration had created a royal mess in the immigration
department, with delays of up to a year in getting appointments for residency
renewals, etc., the whole system was on the verge of collapse by August of last
year anyway.
Shortly after the new law “went into effect,” the new
immigration director said that “enforcement is not possible because we don’t
have the budget,” and so they did nothing to implement most of the new
law. In fact, after 9 months of it’s
going into effect, implementing regulations STILL have not been written, and
WON’T BE until the changes Arias wants are submitted to the Assembly and
passed. It is my understanding that the
changes have been submitted a second time, with revisions, I believe in
February of this year, if memory serves.
Consequently, until the Assembly passes the changes and they
go into effect, this country’s immigration service is in a state of limbo. Regulations to implement the current law have
never been written, which means, as far as I understand it, that they are still
using the OLD regulations which are based n the OLD law, not the new one.
To add to the confusion, it is unclear at this point if
certain specific provisions of the new law are now in force or not, such as the
minimum income required to be a rentista
or pensionado.
And, of course, there are rumors, one of which is that the rentista applications are on hold and
not being implemented until this mess is untangled, which the pensionado applications move
forward. I truly do not know if this is
true, or only rumor.
As a consequence of this chaos and confusion, it is
therefore difficult to say much for sure on certain matters, such as the amount
of income needed for the two above residency classes.
Having said that, I will now outline what appears to be the
correct situation as it is happening right now.
Classes of Residency
There are several basic classes of residency: Rentista, Pensionado, Inversionista, and
Permanent. I will discuss each one
below, with the understanding that as soon as the changes are passed, some of
this will change.
Rentista. Under the old law, all a couple had to do
was show a monthly income from a reliable source outside the country (acceptable
sources are open to debate, and also the acceptable format to document the
income; since the previous administration wanted to eliminate this
classification, they wrote implementing regulations that made it almost
impossible to comply with the procedure to document that income. It is anyone’s guess if that is still the
case or not, although, rumor has it that the government is just sitting on the
applications they have without acting on them until the situation is
clarified.). Under the old law, the
minimum income to qualify was $1,000.00 per couple or individual. My understanding is that under the current
law, this was changed to $2,000.00 minimum per couple, and added $500.00 per
month for each dependent. It is unknown
at this time which minimum is being upheld at this point or, as I said earlier,
whether the government is simply sitting on the applications while the new law
is passed and the qualifications and procedures change yet AGAIN. Right now, then, it is like a crap shoot to
apply for residency under this classification, which creates a big mess because
the younger expats moving here mostly apply under this classification.
Pensionado. It is my understanding that
classification in this category is still being processed, and the minimum pension
amount is still at $600.00 per month.
This is subject to change under a new law, but if you get your
application in before the change, you should be grandfathered in.
Inversionista. This classification is almost dead,
because the previous administration didn’t like this classification and
rejected ALL applications submitted, except for any current projects that were
authorized to issue this form of residency automatically. To my understanding, qualification under this
category is still largely on hold awaiting changes to the law. Under the old law, a minimum investment in
certain categories like reforestation was $100,000.00 to qualify, but, with no
new applications being accepted, it had become a mute point, except for one
ongoing project of long standing. Any
new thresholds are not known at this time, so this classification remains
mostly in limbo too……. Except for one
exception:
There is one reforestation project that has been in
existence for many years, that has been granted the ability to approve these
types of residency applications itself, and that power still exists.
All you have to do with them is invest the $100,000.00 in
the project, for which you get a title to a certain specific parcel that you
own under the auspices of the project.
Once they certify your investment, the company draws up the legal
paperwork and submits your residency application to Immigration, which is
mostly automatically accepted untless you are a fugitive from justice or
something serious like that.
Once the paperwork is submitted, your residency cedula is generally issued within 2
weeks, which is a lot better than the year it takes to issue a residency cedula
in the other categories.
This type of residency is much superior to the other forms
available, except for permanent residency, in that it is issued without restrictions, which means you
have full rights in this country rather than restricted rights like those of an
inversionista or pensionado. This
includes the right to work, by the way.
After you have owned your parcel for 2 years and had your
residency for two years, you can then convert it to permanent residency if you want to, and once you have the permanent
residency you could also apply for Costa Rican citizenship if you desire.
There is one other wrinkle in this strategy. If you can’t come up with the full
$100,000.00 investment in cash, the company can give you a loan for the rest
with a cash amount of at least $40,000.00.
This means that it is $20,000.00 less out of pocket than it would be to
deposit the required $60,000.00 deposit in a CD with the bank that you would
need to qualify for the rentista category,
or the $120,000.00 you would have to deposit as a couple if they decide to
inforce the provisions of the new law.
Naturally, you will have monthly loan payments to make, but
the beauty of this is that after you have owned the property for 2 years, you
can then sell it to someone else if you choose, thus canceling out the
loan. Apparently, these properties are
in high demand and the company will even help you sell your parcel if you so
desire.
In addition, if you keep the trees on your land through to
harvest time, you will realize a good profit on the sale of lumber, and there
isn’t much of a downside since the cost of lumber is going up and up on the
world market with no end in sight, so you could make a tidy profit if you hold
onto the investment that long. My
understanding is that most of the trees are in their 12th year of
growth, and projected harvest time is at or near year 25, so you don’t have
that long to wait if you want to sit there and treat this as an investment with
the residency bonus.
We represent this company through one of our legal contacts,
and would be happy to provide further information and assistance that you would
need to go this route. All things being
equal, I believe that this is still one of the best opportunities available for
those expats seeking permanent residency here.
You may contact me at our customer service email for more information
using the link provided.
Permanent
Residency. This form of residency is
the most desirable, because it is permanent and without restrictions. This means that it is automatically renewable
at the end of its term, unless immigration finds an overriding and compelling
reason not to. This type can be obtained
through marriage or through having blood family relations to a Costa Rican,
such as being a son or daughter, father or mother, etc. It is also offered to both pensionados and
rentistas after 5 years of being in their other status, but the new law
increased that figure, and I am not sure which rules are being enforced right
now, or whether such applications are just being sat on awaiting changes to the
law. You can also get permanent
residency after being an inversionista for 2 years as stated before, or apply
directly for citizenship.
Help With Your Application
Obviously, in the current situation, you need to deal with a
lawyer who is a residency expert in
order to get anything accomplished at this time. I know of two lawyers who have very good
track records and who can get you what you need at reasonable cost.
If you want to discuss this further, you can reach me at our
customer service email address to discuss your situation with me, after which I
can make the referral that is correct in your case. The Inversionista program mentioned above can
only be handled by certain authorized representatives, and one of the law firms
we work with has that status and can expedite your paperwork with them if that is
the course of action you decide to take.
Either eay, it is always best to act sooner rather than
later here, because no one knows what any changes will ultimately include, so
getting your application started under the current rules is the best choice you
can make right now.
Please contact me at our customer service email to get the
ball rolling, and we can even discuss this on the phone or Skype if the need
arises.
