Is Costa Rica Scaring Away Pensioners and Retirees ?
New Immigration Proposal Appears to Do Just That
I am often asked to speak to retiree groups about living in Costa Rica and as part of that discussion the top issue on peoples mind besides the cost of living is how to acquire Costa Rican Residency which would allow them to live legally in Costa Rica.
I always start my presentation by stating that “Costa Rica has had a Retiree Residency program for 40 years running”. The Costa Rican Pensionado and Rentista program was originally passed in 1971 to attract foreign investment and retirees to Costa Rica.
For many years the standard of the program has been as follows: For a Pensionado (Retiree) status the applicant had to prove an income of at least US$600 per month from a pension source. The Rentista (Investment Income) status required the applicant to prove that they had a source of income from investments that generated at least $1,000 per month. Under the original program the applicant could also obtain “dependent” status for their spouse and minor children.
In August of 2006 the new immigration law (Law 8487) which had been passed by the Legislature came into effect. That Law left the Pensionado and Rentista immigration categories intact with some modifications related to the dependent of the applicant. The Pensionado (Retiree) Status was left alone and the $600 per month requirement continued in force and it included one dependent.
The Rentista (Investment Income) category was modified by by requiring an additional $1,000 if the applicant applied jointly with their spouse. As such a couple would now have to show a $2,000 monthly income instead of $1,000. If any children were to be included then the amount rose by $500 for each dependent child.
In essence with some modifications the Rentista / Pensionado program has been in effect for 37 years. However on October 27th of 2008 a newly proposed immigration bill was published for notice and comment in the National Gazette; the official government legal paper. The proposed bill, number 16.954, has not yet been approved into law as of this writing.
The proposal does contain some drastic increases in the amount of income that Retirees would have to prove to qualify for the status. According to Article 76 of the law the Pensionado and Rentista category remain intact. However, Article 78 of the proposed law increases from $600 to $2,000 for the Pensionados (Retiree) category. For Rentistas (Investment Income) the income requirement amount goes from $1,000 ($2,000 for a couple) to $5,000.
Another troubling portion of the proposed law is that any renewal of the Pensionado or Rentista status would have to be done under the new proposed law. This means that if you were approved under the $600 program and you wanted to renew the status you would have to qualify with the $2,000 stipulated in the new law.
The law is currently “under study” at the Permanent Commission for Government Administration. However, the damage as far as perception was already been done. The proposed law was officially published to the public and now circulates among expat circles and foreign retirees who were contemplating retirement in Costa Rica.
If the intent was to scare away Retirees and Pensioners – it is working – Given the current global financial condition that we are in today the numbers provided for in the new proposed law are not realistic. It is said that “timing is everything” well the timing for the release of this proposal could not be worse. As the local economy slumps the need for foreign income brought in by those currently in the Pensionado – Rentistas program will make a difference.
We can only hope that the numbers indicated in the current proposal were a blunder and that common sense will prevail when the legislative commission reviews the bill once again.