Costa Rica Residency: Should I Apply?

If you’re a foreigner living in Costa Rica on a tourist visa, you’ve surely explored the idea of applying for Costa Rica residency. No more border runs every 90 days, an ID card that virtually transforms you into a Tico, and now you can even get a Costa Rican driver’s license – and work in this country legally.

I know about the advantages of obtaining Costa Rica residency all too well, and that’s why I’ve been pursuing this prize for a mind-numbing six and a half years. 

My first mistake was trusting a lawyer who submitted all my paperwork late, so for the first two years, my application was not even being considered. I had to find a new lawyer, obtain current copies of all my documents and resubmit them. And then the rules kept changing on what had to be submitted. And when I finally had all my ducks in a row, the one thing left to do was wait, wait and keep waiting.My experience is probably not typical – I certainly hope it’s not – but it may serve as a cautionary tale to anyone envisioning a simple or straightforward process. As I wrote in a previous blog, “The process of gaining residency in Costa Rica is about as pleasant as being probed by aliens. But it isn’t nearly as quick.”

The advantages of gaining residency in Costa Rica

These are the three main advantages of gaining residency in Costa Rica:

• It eliminates the need to leave the country every 90 days.
• It allows you to work legally.
• It makes you eligible for a Costa Rican driver’s license. 

Most visitors to Costa Rica are given a tourist visa that allows them to stay in the country up to 90 days. If you want to stay longer, you have to leave the country every three months – even if it’s for only an hour – to get your visa renewed. (There’s a myth that you have to leave the country for 72 hours, but there is no basis for this idea in either Costa Rican or Nicaraguan law.)

To re-enter the country, you need an exit ticket, meaning you need to show proof that you have an airline or bus ticket to leave the country in the next 90 days. You may have to buy a bus ticket at the border for $40 or so, even if you never plan to use it. Some people buy plane tickets to get across the border and then cancel them the next day.

In Guanacaste, many expats drive to the Nicaraguan border (or take a shuttle) to get their new visa four times a year. Some depart Costa Rica by air, either to visit their home country or to take a brief vacation in a neighboring country. The main problem with doing the “visa run” by air is you need to buy three tickets – one to get out, one to get back, and one to prove you’re going to leave the country again in the next 90 days.

All of this, as you can imagine, is a headache-inducing hassle. Border crossings by land are always stressful, with “fixers” offering guidance in an attempt to gouge you, and immigration officials who may be looking for a little cash “chorizo” to smooth your passage. And taking an international flight every three months is not in most people’s budget.

So perhaps the biggest pro of gaining residency in Costa Rica is that it eliminates the need for these border runs. When your residency is approved, you are given a cédula – an official Costa Rican identification document – that gives you almost all the same rights as a native. You still can’t vote, but you don’t have to make that damn border run anymore. You will probably gain temporary residency first, good for three years, and then you will have to apply for permanent residency. 

Can I work legally in Costa Rica as a foreigner?

It’s important to understand that in most cases you cannot legally hold a job in Costa Rica without residency  (unless you have a special work permit, which is hard to get). You can buy and sell property, you can start a business, and you can hire Costa Ricans to work for you. But you can’t legally work for another employer – and in many cases, you can’t even work for your own company.

Of course, foreigners on tourist visas often work under the table, and the authorities usually turn a blind eye. But if you’re caught working illegally, you could face deportation.

Obtaining residency eliminates this restriction, allowing you to seek any job you want.

Can I drive legally in Costa Rica as a foreigner?

Even on a 90-day tourist visa, you can buy, sell or rent a car in Costa Rica and drive legally. All you need is a valid driver’s license from your home country – and you have to carry your passport any time you drive, so that if cops stop you they can check the date of your last visa. 

But if you overstay your visa, your right to drive in Costa Rica is revoked until you renew it. You may be accustomed to getting a ticket in the mail in your home country for minor violations, but the traffic police here are a little more hands-on. They will actually whip out a screwdriver and remove the license plates from your car if you’re driving here illegally. And then while you’re limping home, still traumatized from one police stop, you can get in trouble again at another for driving a car without license plates. 

One major benefit of applying for residency is that once your application is accepted (not approved, just accepted), you gain new rights because your residency is “en trámite” (in process). You should get an expediente, a printed document that says you don’t have to leave the country every 90 days anymore. 

However, if you want to drive in Costa Rica, the rules are totally different. The traffic police do not recognize an expediente as permission to drive with an expired visa. So even if the Immigration Department does not require you to make that border run anymore, you still have to do it if you want to continue to drive legally.

Also, it’s impossible to get a Costa Rican driver’s license unless you already have residency. So this is another big advantage of obtaining your cédula – you can also get a Costa Rica driver’s license, and traffic cops will have no reason to ask for your passport to check your latest visa.

Disadvantages of seeking residency in Costa Rica

The expense, hassle, red tape and most of all the exasperating wait times are among the biggest disadvantages of applying for residency in Costa Rica. 

If you’ve already moved to Costa Rica, and you’re pretty sure you want to spend the rest of your life here, then you should by all means apply for residency. But if you’re just now settling in, and you’re unsure where you’ll want to be in five years, this may be more trouble than it’s worth.

• Wait time: Although your immigration attorney may tell you this can be done in six months, most expats who have navigated this process will tell you it usually takes years. The only significant advantage you gain from having your residency “en trámite” (while you wait for a final ruling) is that you are no longer required to do border runs. But as we just mentioned, if you want to drive, you have to do the border runs anyway.

• Expense: Unless you’re an extreme do-it-yourselfer, you’ll need a Costa Rican immigration attorney to guide you. This may cost you $1,000 or more just for the initial retainer. And depending on your situation, there may be substantial additional costs to obtain the documents you need and to start paying Costa Rican taxes, health insurance and other costs.
• Red tape: The Costa Rican immigration system is cumbersome, bureaucratic, slow and prone to making new demands as regulations change.

Qualifications for Costa Rica residency

The first question to ask about seeking Costa Rican residency is whether you even qualify. Costa Rica offers several paths to residency, including:

• Marriage and children. If you marry a Costa Rican native, or have a baby with one, that will put you on a fast track to residency. Or even if two foreigners have a baby in Costa Rica, the same is true. The word for this type of residency status is “Vinculado,” which means “linked.” Admittedly, this is an extreme solution, but it works!
• Retired. “Pensionado” is the magic word for a foreigner of a certain age who can prove that s/he receives a lifetime monthly pension from a foreign country of at least $1,000 a month.

• Workers. “Rentistas” may sound like “renters,” but this category is actually for working people who can deposit $2,500 a month in earnings into a trust linked to a Costa Rican bank. Typically this category is used by professionals working remotely for foreign companies. 
• Investors: “Inversionistas” with deep pockets who can invest $150,000 in a qualifying project in Costa Rica will also find a red carpet awaiting.
• Self-employed: Under certain circumstances, candidates lacking any of the above can qualify by starting businesses and hiring themselves.

For more information, see this Tico Times article on “5 Ways to Become a Legal Resident of Costa Rica.”

What documents will I need?

A copy of all the pages of your passport (even the blank ones) is a start – but that’s the easy part. In addition to that, at a very minimum, you will need:

• Birth certificate: A copy of an old one won’t do, so you’ll have to track down the health authorities of your birthplace to issue a new one.
• Criminal record: You’ll need an official document from the FBI (U.S.), Royal Canadian Mounted Police (Canada), or the federal police of your home country attesting to your criminal record or lack thereof.
• Marriage certificate: If you are seeking residency for your spouse as well, you’ll need proof that you’re legally married.
• Fingerprints: Costa Rica requires all candidates for residency to be fingerprinted – plus, you will probably need an additional set of fingerprints for the FBI or RCMP to track down your criminal record.

• Apostilles: All foreign documents need to be stamped with an apostille, which is sort of like a super-duper international notary public stamp. Some countries are not signatories to the treaty that recognizes apostilles, including Canada, but for those countries there are work-arounds. 

What else will you need? The answer to that question might vary with every lawyer you ask. The first time I applied for residency, I was told by one lawyer that I would need an apostilled copy of my 20-year-old divorce decree, while another said that was completely unnecessary. One source urged me to obtain a letter of recommendation from my former boss in the U.S., and one encouraged me to obtain an apostilled copy of my college diploma. Others never mentioned any of this.

But there are certain documents you may need that can be obtained only in Costa Rica, depending on how you qualify for residency:

• Caja: The Caja Costarricense de Seguro Social is a large, government-run health insurance and pension program that provides most of the medical care in Costa Rica. If applying for residency here, you may need to provide proof that you are enrolled with the Caja and paying its monthly fees. Also, if you run a company that employs Costa Ricans, you may need to provide proof that you are paying the employer’s share of the Caja for them. If you start your own company and you’re the only employee, then you have to pay the employer’s share as well as the employee’s share. This is why I pay $125 a month – which has cost me some $4,500 in the three years since I signed up.
• Hacienda: If you are working and making money in this country, the IRS of Costa Rica will expect you to pay taxes on your income. And while you might be used to paying taxes once a year back home, you’ll find that Costa Rica has complicated tax laws and frequent filings that may require you to hire an accountant year-round.
• INS: The Instituto Nacional de Seguros (National Insurance Institute) is a government agency that sells insurance of all kinds – auto, health, life and more. If you start a company in Costa Rica, you may be required to buy workers’ compensation insurance for your employees, including yourself.
• Accountant statements: Other than the “Vinculado” status involving marriage or children, all paths to residency require you to demonstrate a certain amount of wealth, or at least a dependable income. Whether you’re retired, working remotely or running a new business in Costa Rica, you will probably need an accountant to prepare the documentation to support your application.

Bottom line: Is Costa Rica residency worth the trouble?

If you plan to live in Costa Rica for the rest of your life, or even for the next 10 years, seeking residency may be a no-brainer. Once you’ve turned in all your documents, you should be able to get an expediente fairly soon, and then you’ll no longer have to leave the country every three months – unless you drive. 

So if you live in Playas del Coco, your border run to Nicaragua may take four hours of driving round-trip and one hour to check in and out of Nicaragua. That’s 20 hours a year you spend on this task.

But when you weigh this against the thousands of dollars you may face in legal and accounting fees, plus government costs like the Caja, you may find that the quarterly border run is not such a hassle after all. 

And given the years you may spend waiting for your cédula, seeking residency is not necessarily advisable for people who might stay in Costa Rica just a few years.

Talk to your friends, talk to a lawyer, understand the pros and cons, and make your decision accordingly. Best of luck!