Own A Home Of $200K+ And Get 'Inversionista' Residency In Costa Rica? We think it's unlikely.

Scott Oliver - October 2009

On October 2nd 2009 in a Tico Times article entitled 'Foreigners who own homes may get temporary residency."

In the article it was reported that according to a Memorandum from the Immigration Administration by Lic. Mario Zamora Cordero, the Director General of Immigration, dated 28 August 2009: "Under the new law, non-residents who own more than $200,000 in property can apply for temporary residency as an investor, allowing them to take advantage of the country's public health care system along with other services not available to them as tourists. The clause is expected to take effect March 1, 2010."

A few of our VIP members have been chatting about this in our Discussion Forum so we thought we had better look into it and I contacted a friend of ours who is the ex-Director of the Immigration Department, Lic. Marco Badilla and Attorney Rick Philps for their comments:

1. Lic. Badilla stressed that "... at the heart of the matter, immigration has always operated under the assumption that this investment is one that produces benefits for the country, not necessarily to buy a home or a car, it has to be more consistent that that. It seems to me that the memorandum cited as the source for this article is only a version or, an outline about a sub category.... Personally I think there is only a very remote possibility that this is correct."

2. Attorney Rick Philps responded saying: "... it is an indispensable requirement of the renewal of the Inversionista Residency category, that the qualifying $200,000.00 U.S. investment project has been duly registered with the Costa Rica Tax Department (Tributacion Directa)."

"I know that it is dangerous to rely on logic in this country, but if proof of having registered with the Tax Department is an indispensible requirement of the renewal of this Residency Category, then the investment obviously must have been placed in a money-making project of some type, that would attract taxable income."

"Based on that logic, the inference contained in the Tico Times Article that you can meet the requirements of this Residency Category by merely purchasing a personal use, non-income-earning property of a $200,000.00 U.S. value or greater, in my opinion, can't be correct."

3. However, on the 6th October 2009 Attorney Rick Philps spoke with Attorney Gonzalo Viquez Sr. and stated that:

"I have just spoken with Lic. Gonzalo Viquez Jr. regarding the above issue. He says that his understanding is that in-fact the Director of Immigration's intention in issuing this new Circular of August 28, 2009, was along the lines indicated in the Tico Times article. The requirement of registering with the Tax Department was to prove the value of the investment made as being at least US$200,000, and also for the purposes of the Municipalities collecting property taxes based on this value. Apparently, the Tax Department shares this information with the Municipalities. This is different than my previously stated interpretation of the Circular, based on the dangerous position of logic, that registering with the Tax Department could only mean that the investment must be in a project with an income earning ability."

"Gonzalo went on to say, that the real problem is within the Immigration Department itself, between the Director and the Sub-Director as to how this new Circular provision should be applied. The Sub-Director is charged with reviewing and approving such Applications and according to Gonzalo, is set to reject all such Applications that are submitted for investment projects that don't meet the previous criteria of being for the "social good" of Costa Ricans, as might be determined by the Immigration Department in their discretion. He said that the only way that it will be determined for sure, is following the submission of a number of "test" Applications."

"It should be noted, that this new Circular provision is in effect immediately and is not tied to the new Immigration Bill which comes into effect on March 1, 2010."

So that you fluent Spanish speakers can compare for yourselves, here are the two articles, first the existing law and below the new one:

LEY ACTUAL (No 8487)

"Artículo 75.-

La Dirección General de Migración otorgará una autorización de ingreso y permanencia por un tiempo definido, que será superior a noventa días y hasta por dos años, a quienes se encuentren comprendidos en las siguientes subcategorías:

a. El cónyuge de ciudadano costarricense que haya tenido vida conyugal.
b. Los religiosos de aquellas religiones acreditadas ante el Ministerio de Relaciones Exteriores y Culto.
c. Ejecutivos, representantes, gerentes y personal técnico de empresas establecidas en el país, dedicadas a aquellas áreas definidas como prioritarias, según las políticas migratorias y de inversión extranjera, así como sus cónyuges e hijos.
d. Inversionistas.
e. Pensionados.
f. Científicos, profesionales, técnicos especializados.
g. Deportistas, debidamente acreditados ante el Consejo Nacional de Deportes.
h. Corresponsales y personal de agencias de prensa.
i. Quien haya convivido con su cónyuge e hijos menores o con discapacidad de las personas mencionadas en los incisos anteriores.
j. Rentistas."

Costa Rica Immigration Memorandum

LEY NUEVA (No. 8764 vigente a partir del 2 de marzo 2010)

"ARTÍCULO 79.-

La Dirección General de Migración otorgará una autorización de ingreso y permanencia por un tiempo definido, superior a noventa días y hasta por dos años, prorrogable en igual tanto, a quienes se encuentren comprendidos en las siguientes subcategorías:

1) El cónyuge de ciudadano costarricense, de conformidad con lo dispuesto en el artículo 73 de la presente Ley.
2) Los religiosos de las religiones que deban estar acreditadas ante el Ministerio de Relaciones Exteriores y Culto.
3) Los ejecutivos, los representantes, los gerentes y el personal técnico de las empresas establecidas en el país, así como sus cónyuges e hijos. También estarán contemplados en esta categoría los empleados especializados que por cuenta propia o en relación de dependencia se integren a tales labores y sean así requeridos para el desarrollo de estas, según criterio de la Dirección de Migración.
4) Los inversionistas.
5) Los científicos, los profesionales, los pasantes y los técnicos especializados.
6) Los deportistas debidamente acreditados ante el Consejo Nacional del Deporte y la Recreación.
7) Los corresponsales y el personal de las agencias de prensa.
8) Quien haya convivido con su cónyuge e hijos menores o con discapacidad, de las personas mencionadas en los incisos anteriores.
9) Los rentistas.
10) Los pensionados."

Lic. Badilla commented that: "Both articles (below) are practically the same...... Neither the new law, nor the old law confirms this. Either way, it remains to be defined by law which will happen when the new administration takes office around the 8th May 2010."

Like many laws in Costa Rica, this is not crystal clear and I am very grateful that our attorney friends have tried to clarify this for our VIP Members.

One of our long time VIP Members 'CostaRicaBill' (who - Congratulations Bill! - has been with us for over three years) politely suggested, it would be best if we get a "written determination from the department of immigration" and he is right but, but to be blunt, I think we'll see the new administration take office in May 2010 before we would get a reply...

There are many facets of living in Costa Rica that simply don't have definitive answers and although I genuinely believe that it would be good for Costa Rica if you could establish temporary residency by buying a home of a certain value, I would have to agree with Attorney Marco Badilla and say that this is probably not very likely.

Written by Scott Oliver, author of 1. How To Buy Costa Rica Real Estate Without Losing Your Camisa, 2. Costa Rica Real Estate Scams & How To Avoid Them and 3. Costa Rica's Guide To Making Money Offshore and the Director of Costa Rica Living & Retirement - Secrets To Happiness, a new DVD which reveals all with 14 in depth interviews...