Foreign Affairs

Costa Rica is a member of the Latin Union.

In order to enter Costa Rica for business or pleasure, all travelers must have a valid passport to enter the country. 90-day entry visas are granted at the airport. A $17USD airport tax is charged upon departure.

It is possible to obtain residence in Costa Rica the following two ways:

• “The Retirement Law”, formally titled Law No 6982 of 1984, states that a foreigner may acquire residence in Costa Rica if he/she can show a sufficient income either from investments or from a pension. It does not matter whether the income is sourced locally or abroad. Residence obtained under this law allows an individual to work in Costa Rica but only in areas where he would not displace indigenous workers. Anyone who obtains residency under this law should to reside in Costa Rica for at least four months out of each calendar year.

• Residence permits obtained under Law 1155 of 1950, commonly called "the Residence Law 1950,” do not restrict the types of economic activity that a resident permit holder can engage in. The permits under this law are granted on a very selective basis and only to businessmen and professionals.

Individuals usually enter Costa Rica on a tourist or business classification and file a petition to change their immigration status to a Work Permit or Temporary Resident permit category upon arrival. The procedure is much more complicated, requiring a great deal more documentation, if you attempt to obtain a work permit before arriving in Costa Rica.

It is impossible in Costa Rica without first obtaining a work permit, a process that may take between 30 days and 60 days to complete. Moreover, a work permit can only be applied for after a residence permit has been granted. Work permits are valid for one year and must be renewed annually.

It is possible for foreign companies that have been duly registered in Costa Rica to obtain Temporary Residence permits to transfer foreign employees such as technicians or executives and managers. Such Residence permits are also valid for one year and may be renewed.

Companies with more than 30 employees can apply for a general work permit that allows it to bring foreign technicians and executives to work in Costa Rica without making an individual application for each person it wishes to engage. This type of permit is valid for one year and must also be renewed annually.

According to the labor code each corporation must fill at least 90% of its positions with indigenous workers and 85% of the salaries paid by each company must go to Costa Rican nationals. Moreover, foreigners can only occupy jobs for which Costa Rica nationals are available with special permission is.

The process by which foreigners may purchase real estate is Costa Rica is full of bureaucratic red tape and fees and taxes typically amount to more than 4% of the value of the real estate. Nevertheless, the Costa Rican government has not placed any restrictions purchase of real estate in Costa Rica by foreigners.

Recently, Migracion, the Costa Rican immigration agency, called the migratory situation in Costa Rica “out of control” and announced that in future they would be restricting residency approvals to the minimum. Migracion has also started to turn down requests for residency on the basis that an applicant \'would not add any input to the economy of Costa Rica or create employment for Costa Ricans\'.

The World of Business

Generally speaking Costa Rica has an attractive, stable business environment and is worth considering when choosing a jurisdiction for offshore financial activities. Some might find the fact that Costa Rica’s telecommunications and transportation infrastructures are controlled by the state and in need of maintenance worthy of concern, but it is important to remember that they the best in the area.

A Costa Rican resident must act as the legal representative for and have full power of attorney on all business matters for any branch of a foreign company operating on Costa Rican soil.

Anyone establishing a business in Costa Rica must apply for a business license, called a patente comercial, from the local Municipality, called Departamento de Patentes, where the business is to operate, register with the Costa Rican Revenue Administration (Direccion General de Tributacion Directa), and establish an appropriate corporate form. If the corporation will be staffed, then it is necessary to register the company as an employer under the Costa Rican Social Security System (Registro Patronal bajo la Caja Costarricense del Seguro Social).

The 1995 General Customs Law was passed to introduce reforms designed to simplify out-dated, complicated bureaucratic customs procedures. Currently, much of the processing necessary to complete the process is accomplished electronically or through a one-stop system. In addition, import tariffs were significantly reduced.

Free trade zone areas throughout the county offer a variety of fiscal incentives.

Cost Rica’s legal infrastructure is relatively sophisticated and offers businesses a wide variety of structures under which to operate including limited partnerships, limited liability companies and sole proprietorships. It is possible to create trusts under Costa Rica’s Commercial Code despite the fact that Costa Rica is a civil code jurisdiction.

The Costa Rican government has not established any significant barriers to foreign investments. What’s more, the only restriction on the repatriation of profits is the deduction of withholding taxes – a restriction the government is seriously considering get rid of.

The government has placed restrictions on foreign investment in the state owned monopolies of telecommunications, alcohol distilleries, insurance, newspapers, radio, television broadcasting, electricity and petroleum refining. These restrictions make foreign participation either forbidden or required to be part of a joint venture with a Costa Rican majority shareholding partner.

Costa Rica has not placed any controls specifically on the exchange of currency; nevertheless, currency received by resident corporations or individuals must be sold through a Costa Rican bank; and capital imported for investment purposes is required to be \'registered\' in order to ensure eventual problem-free repatriation.