Teaching English in Costa Rica. What they should tell you but do not and how it could get you deported!

Current trends indicate, that much more than previously, would-be immigrants to Costa Rica are coming from a much younger age group, well prior to retirement years, with the intention of being employed, or conducting a business in Costa Rica.

Many ex-pats, especially coming to Costa Rica from Canada, or the U.S., are particularly attracted by the lure of making a living in Costa Rica by teaching English in a private school, or other private educational institutional setting.

This can only legally be accomplished prior to the ex-pat obtaining Permanent Residency status, by way of a Work Permit issued by the Immigration Department at the behest of the particular educational institution interested in hiring the ex-pat.

“An ex-pat found to be working in such a circumstance without a valid Work Permit, would be subject to deportation by the Immigration Authorities, with a prohibition of re-entering the Country for a period of ten years.”

Costa Rica, like the majority of countries in the world, has protectionist legislation in place, to preserve the right to work in any given field, on a “Costa Rica citizen has the first chance” basis.

It is misguided for any foreigner to believe that they can arrive in Costa Rica, merely “set-up shop”, and start earning a living. The only exception to this circumstance would be the case of a foreigner working for one of the large multinational companies that have established branch operations in Costa Rica, where Costa Rican work permits have been obtained by the company for workers with special skills not possessed by their Costa Rican counterparts.

Expats Doing Business or Working in Costa Rica

In the ordinary course, in order to legally work, or actively engage in any business enterprise in Costa Rica, a foreigner’s immigration status must become regularized in accordance the Immigration Laws of Costa Rica. In the first instance, it is illegal to work, or actively engage in any business enterprise, while merely possessing a Costa Rica Tourist Visa, or Temporary Residency.

A foreigner who is found-out by the Costa Rican Authorities to be engaging in such activity, is subject to immediate deportation, with a sanction of not being able to re-enter Costa Rica for a period of ten years.

It should be noted that foreigners may own and manage a Costa Rican business which employs Costa Rican, or foreign workers possessing Permanent Residency, with, or without holding Temporary Residency status in Costa Rica themselves. In this scenario, the foreigner would not be legally able to engage in the active work of the business, but merely be able to exercise a managerial function.

Applying for and being granted Residency in Costa Rica, is the only legal manner in which an income earning business enterprise can be approached. Residency has a two tier approach, the first being Temporary Residency, which usually involves one of the two categories of Rentista (investment income), or Pensionado (pension income).

Each of the two categories requires a “clean” Criminal Record to be proven from your country of origin and a specific monthly income financial component.

Either of these two categories, once granted (usually a period of ten months to a year following application), permits the holder to manage a company, owned by a Costa Rica corporation, but not to work for wages.

The second tier of Residency, is to apply for Permanent Residency status, after holding either of the two Temporary categories for a period of at least three years. The Permanent Residency category usually provides for the holder to work in Costa Rica, without restriction.

Once being a holder of a Temporary Residency category and being in legal position to pursue a particular business enterprise in Costa Rica, incorporating a Costa Rica company through which to conduct business would be the next step. This must be undertaken by a Costa Rica Attorney/Notary.

Following incorporation, registration of the company with the Costa Rica Tax Department (Ministerio de Hacienda) is necessary, followed by the opening of a bank account.

This step is very complicated in Costa Rica, usually requiring, in addition to copies and certifications of various corporate documents for the company, at least two original written banking and two professional references from your entities, or persons in your country of origin, who you have known, or done business with you, for at least two years.

Personal certified accounting and tax return information will also be required from your country of origin.

If not a home-based business, locating in an appropriately zoned area and obtaining a business license (patente comercial) from the applicable Municipality would be an important step in completing the process. Certain home-based businesses would also require the obtaining of a business license.

The business license application must be made to the License Department (Departamento de Patentes) of the Municipality, stating the name of the applicant, the date that the business initiated operations, a specific description of the nature of the business, the name of the business, and the specific address and telephone number of the business.

In embarking on such a venture, the would-be Costa Rica immigrant must possess the virtue of patience. Without patience, such a party will certainly succumb to the overly bureaucratic nature of the Costa Rican system, which will make any similar known undertaking in the party’s country of origin “pale in comparison”. Obtaining legal advice from a competent Costa Rican Attorney is essential for success in such an endeavor.

Written by Lic. Rick Philps. Richard (Rick) Philps is a Canadian citizen, naturalized as a citizen of Costa Rica. He was born, raised, and educated in Victoria, British Columbia, receiving a Bachelor of Arts Degree in 1977, and a Bachelor of Laws Degree (English Common Law) in 1980, from the University of Victoria. He thereafter practiced law in Victoria, as a member of the Law Society of British Columbia, for fourteen years, prior to moving to Costa Rica in 1998.

Mr. Philps returned to university in Costa Rica, earning his Bachelor of Laws and Licensing Degrees (Civil Law), from the Metropolitana Castro Carazo University, and a Post-Graduate Degree in Notary and Registry Law, from the Escuela Libre de Derecho University, in San Jose, is a member of the Costa Rica College of Lawyers, and has practiced law in Costa Rica for five years. Mr. Philps practices law in the areas of real estate and development, corporate, commercial, contract, and banking.

Costa Rica Attorney Rick Philps & Attorney Roger Petersen.

To speak with Attorney Rick Philps and Attorney Roger Petersen about hiring them as your Costa Rica attorneys, please contact them using the information below:

Lic. Rick Philps and Lic. Roger A. Petersen – Attorneys at Law

Escazu, San José, Costa Rica

Tel: 506-2288-2189 Ext. 101 or 2288-6228 Ext. 101

You can email Attorney Roger Petersen by clicking here.

You can visit the Petersen and Philps Law Offices Website here.

You can visit the CostaRicaLaw website here.

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