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Costa Rica: Labour Regulation

Work Permits

Individuals normally enter Costa Rica on a tourist or business permit and upon arrival file a petition to change their immigration status to a work permit or temporary resident permit category. For those who obtain their work permit before they arrive in Costa Rica, the procedure is much more complicated, requiring a great deal more documentation.

No one can work in Costa Rica without first obtaining a work permit, which may take between 30 days and 60 days to process. A work permit cannot be applied for until a residence permit has been granted. Work permits are valid for one year and require annual renewal. A temporary residence permit may take 3 to 6 months to process.

The following individuals may obtain a temporary working permit in Costa Rica: scientists, professionals, teachers, technicians and specialized staff hired by companies or institutions based in Costa Rica; businessmen and board members of national and international companies. The work permit does not at the time of writing, however, allow for any accompanying family members.

A company which has more than 30 employees can apply for a general work permit enabling it to bring foreign technicians and executives to work in the jurisdiction without the need to make an individual application for each person it wishes to engage. Such a permit is valid for one year and must also be renewed annually.

The labor code limits the percentage of foreigners working in each corporation, specifying that at least 90% must be indigenous and that 85% of salaries paid by a company must go to Costa Rican nationals. Moreover foreigners cannot occupy jobs for which Costa Rica nationals are available unless special permission is granted.

Residence can be obtained in one of 2 ways:

  • Under Law No 6982 of 1984 (known as "the Retirement Law") a foreigner may acquire residence in Costa Rica if he can show a sufficient income whether from investments or from a pension and irrespective of whether the income is sourced locally or abroad. Residence obtained under this law allows an individual to work in Costa Rica but does not allow him to work in areas which would have the effect of displacing indigenous workers. A resident under this law is expected to reside in Costa Rica for at least 4 months in each calendar year.
  • Residence permits obtained under Law 1155 of 1950 (known as "the Residence Law 1950") carry no restrictions on the sorts of economic activity that a resident permit holder can engage in. However permits under this law are granted on a very selective basis and only to businessmen and professionals.

In March, 2004, the immigration agency (Migracion) said that the migratory situation in Costa Rica was “out of control” and that they would in future be restricting residency approvals to the minimum. Migracion began to apply an economic criterion, stating in some cases that an applicant 'would not add any input to the economy of Costa Rica or create employment for Costa Ricans'.

In August, 2006, a new immigration law (the General Law of Immigration) had been passed by Costa Rican lawmakers aiming to crack down on illegal immigration from neighbouring countries, particularly Nicaragua, by, among other measures, imposing tough penalties on businesses that employ, or individuals that harbour, illegal immigrants.

The law also set out new income and investment limits for rentistas, but was ambiguous. Previously, rentistas were obliged to show a minimum monthly income of US$1,000 per month, or a lump sum of US$60,000 in a foreign bank account. Under the updated law, it seemed that both the primary applicant and the spouse must pass the US$60,000 test, while an extra $30,000 would be required for each dependent. However, it seemed that two separate sections of the legislation contradict each other and confusion reigned.

The new Costa Rica Immigration Law (Ley General de Migración y Extranjería) was published in the official Costa Rica government newspaper La Gaceta on September 1, 2009. The law became effective as of March 1, 2010, but was not retroactive - i.e. pesionados and rentistas who applied for or been granted residency prior to this date fell under the old immigration regime.

The new law creates 5 residency types as follows:

Pensionado

  • Must have proof of USD1,000 per month in income from permanent pension or retirement fund;
  • Can claim spouse and dependents under 25 years of age or older with disabilities;
  • Cannot work as an employee;
  • Can own a company and receive income;
  • Cannot be absent from Costa Rica more than 2 consecutive years.

Rentista

  • Must have proof of USD2,500 per month in income guaranteed by a bank;
  • Can claim spouse and dependents under 25 years of age or older with disabilities;
  • Cannot work as an employee;
  • Can own a company and receive income;
  • Cannot be absent from Costa Rica more than 2 consecutive years.

Inversionista

  • Must invest USD200,000 in any Costa Rica business or a specified amount of investment in certain Costa Rica government approved sectors. Since 2012, the specified amount may also include the cost of real estate to be used as a family home, or land for future development or preservation.
  • Can claim spouse and dependents under25 years of age or older with disabilities.
  • Can claim income from investment projects
  • Can own a company and receive income.
  • Cannot be absent from Costa Rica more than 2 consecutive years.

Representante

  • Open to directors, executives, representatives, managers and technical employees of companies meeting certain requirements;
  • Income must exceed Costa Rica minimum wage for specified position by at least 25%;
  • Can own a company and receive income;
  • Cannot be absent from Costa Rica more than 2 consecutive years.

Permanent

  • Must be related to a Costa Rica citizen through marriage or having a child, or may apply after 3 years in another residency;
  • Can claim spouse and dependents under25 years of age or older with disabilities;
  • Can work as an employee;
  • Can own a company and receive income;
  • Cannot be absent from Costa Rica more than 4 consecutive years;

It is important to note that under the new residency law, all residency types must participate in Costa Rica's national social security and healthcare insurance system, know as “Caja”. Proof of participation and payments for the entire term of residency are required for renewals.

 

 

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