San José, Costa Rica, since 1956

Immigration Proposals Explained

TALK of proposals that would dramatically change the system under which most North Americans and Europeans apply for residency in Costa Rica has sparked concern andconfusion among foreigners here.If proposed changes become law, it would require a complete overhaul of the current residency system, according to Ryan Piercy, general manager of the Association ofResidents of Costa Rica (ARCR).He said the changes, if approved, also could decrease the number of foreigners who become legal residents here, which he said could hurt the country economically.FOREIGNERS with legal residency and those in the process of obtaining residency will not be affected by the proposed changes because Costa Rica prohibits laws from being enacted retroactively, Piercy explained at a meeting organized by the Newcomers Club earlier this month to set the record straight.“I’m not even sure what the new rules are or if they’ve even gone through,” said newcomer Steve Boisvert before Piercy’s discussion began. “As I understand it, theyhaven’t… but it’s confusing.”MANY North American and European residents apply for residency under the immigration categories of pensionado (a retiree) or rentista (a person not yet of retirement age who has a substantial enough income or savings on which to live).To apply for residency as a pensionado under current requirements, a person must prove a retirement or disability pension of at least $600 a month. Rentistas must prove they have a continuous source of income (minimum $1,000 per month) from abroad.Rentistas or pensionados are not allowed to work in Costa Rica, although they may start and administratively run businesses.THE proposed “Law of Pensionado and Rentista Residents,” sponsored by legislative deputy Aida Faingezicht and being reviewed by a congressional commission, sparked criticism last year (TT, Nov. 7, 2003.)Opponents say the proposal would alienate many potential residency applicants because it calls for an increase in the required monthly income, from $600 to $3,000 for pensionados and from $1,000 to $6,000 for rentistas, along with establishing minimum age requirements of 55 for pensionados and 45 for rentistas.However, the proposal would allow rentistas and pensionados to bring in household goods and appliances for three years tax free and import one vehicle for personal use free of taxes up to five years after becoming a resident – restoring some of the benefits cut in 1992 when the residency law was amended.ANOTHER proposal, which has yet to go before the Legislative Assembly, is supportedby the Immigration Department. It would eliminate rentista status altogether in an effort to attract more foreign capital to Costa Rica, according to Immigration Director Marco Badilla.“It’s not about eliminating the rentista status,” Badilla told The Tico Times. “It is really about bringing in more people as inversionistas.”Inversionistas (residents who invest money in Costa Rica) are required to spend at least $50,000 in a tourism or import-export business in Costa Rica to qualify for residency.Badilla said the proposal is not about denying people residency, but about the possibility of bringing more money into the country. Pensionados also are valuable to Costa Rica and its economy, he added.“There is a lot involved,” Badilla admitted. “We have to analyze the situation and make decisions on what needs to be changed.”According to the ARCR, the majority of residents investing in businesses are rentistas, who are able to do so without the major investment asked of inversionistas.THE ARCR is fighting to prevent these proposed changes and to set the record straight for residents who have expressed concern about the potential changes, according to Piercy.“If you haven’t applied for residency, your goal, in my opinion, is to apply now before they make any changes,” he said, recommending that anyone wanting to spend more than four months of the year in Costa Rica apply for residency.“These proposed changes are unlikely to affect those who have residency, except when applying for permanent residency,” he continued. “However, the proposed changesare likely to affect those coming in.”Some people at the Newcomers Club meeting said they wanted to complete their paperwork for the residency application process as soon as possible.“My paperwork was lost, and I can’t apply until it gets straightened out,” saidKaren Mendoza. “I’m concerned and want to do it now because I know how long theprocess takes and things can change.”PIERCY said he is concerned that if either of these proposals is successful, alarge number of people who might have otherwise come to Costa Rica will lookelsewhere to retire, taking their money with them. This, he said, would be a seriousblow to the economy.He also emphasized that many foreigners are under the erroneous impression thatthese proposals have already passed. “There have been no changes in the law,” Piercy stressed. In the past, “a numberof immigration proposals have been submitted to the Legislative Assembly thatnever passed.”Some changes have been made in recent years, Percy pointed out. He explained thatin the past, pensionados and rentistas could apply for permanent residency after twoyears. That is no longer an option.Until three years ago, use of the Social Security System (Caja) did not require residency,and now it does, Piercy said.ACCORDING to Piercy, the problems people should be concerned about are not the proposals, which he said are not likely to pass, but changes in the application of the bylaws of existing laws, which are subject to interpretation with each new governmentadministration.“Laws in Costa Rica cannot be retroactive, but the bylaws can be,” Piercy said.“This is what the ARCR is trying to fight. It doesn’t make any sense.”In the past year, the ARCR has taken a greater role in lobbying for members’ rights and trying to ensure residency laws are clear – not subject to interpretation.“A lot of things have never been specified, and so it is up to whoever is in charge,”Piercy said. “We’re trying to change that.”

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