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No country wants poor immigrants, even the US, so I agree that $600 is a pretty paltry sum, but not long ago it was only $300 you needed to qualify for residency. To be honest, there have been months where I only spent $600 a month to live in Costa Rica, but I didn’t have a house payment or rent, and I don’t spend money on things like wine, or eating out, or taxis (except once in a while). So it’s a pretty bare-bones existence; I don’t buy packaged food and I don’t eat meat generally. I have a neighbor who only gets about $700 and he often hits me up for C10,000 until his check hits the bank. Most of the people (couples) I know are living on about $1200, without having housing costs except ICE. So I think $2000 a plenty to live on for two people.
Posted in the wrong place and reposted here by Scott …..
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Posted Nov 27,2008 7:05 PM orcas06I have been following the news on the proposed immigration changes concerning pensionados and rentistas with a lot of interest. Must say, I don`t understand it completely but not very surprised. I an a US citizen , have been a permanent resident for more than 30 yrs, am fluent in Spanish, have CR grandchildren, have a pension from the CCSS, a property owner and an admirer of CR and “pura vida” If my memory serves me correctly the PLN when faced with domestic problems always look for a scapegoat like others in LA.. Ex.. Venezuela, Nicaragua, Ecuador et al. The Oduber, Pepe, Monge, Pepe Jr. and Arias rules all have done this. CR should do all possible to promote all legitimate, honest and “sana” income possible. Is communist China the answer? Don’t think so. There is no free lunch. Don’t plan on leaving. Hope I’m right.
This is not good news for investors, developers or perpetual tourists. Nor for costa rica’s economy. Making decisions like this will only ensure that this country joins the world economy in a global depression, instead, they could so easily be the go-to location for to invest & retire here. I have a feeling Central America is going to destabilize soon anyway. It was fun while it lasted… pura vida.
Edited on Nov 27, 2008 21:42
Here is my take after thinking about it after returning from CR on Sunday after having numerous discussions with Ticos:
If you ask a Tico who is aware of what is going on in the rest of the world, they will tell you they know China is not a good choice. They are aware the products they make (lots of Chinese cars & motrocycles in CR) are subpar compared to Japan, Europe and N.A. They are also aware that the Chinese environmental record is simply attrocious (see Chinese driven shark finning show on one of the U.S. networks).
Now I read the new immigration bill made Arias’ priority session list, which means it will be voted on before April 15. Lot of theorizing evident in the blogs I have read. Some say the Chinese have tipped CR off on what will happen to the US economy with so many newly printed dollars in circulation that may or may not be ultimately returned to the Federal Reserve. It is theorized that the committee chairman behind the bill in CR is using a 50% drop in dollar value, which if true, I would be buying colones right now. The Colon gained 2% since we left, a start to the reversal of the last year when it went from C490’S to C560’s (13% loss) perhaps? The new law limits are an increase of 500%!!!
What I think will happen is that there will be a modest run on the banks by foreigners who have accounts, diminishing the amount of dollars the CR treasury has to buy back to control inflation. The problem is that all the other currencies will end up in the lot and their foreign reserves they use to purchase oil and other commodities will also be diminished, thus inflation would get worse. In addition, if this applies to the Nicas, who make up the vast majority of their agricultural labor pool, then who is going to pick the fruit for the world’s #1 banana and pineapple producer? Lastly, this aura of ever changing legislation will make CR less appealing to wealthy investors, who are the only ones who could afford the new monetary requirements. This adds up to a lose-lose situation where the government is not only hurting themselves, but their own people. This is a disturbing conclusion.>Lastly, this aura of ever changing legislation will make CR less appealing to wealthy investors, who are the only ones who could afford the new monetary requirements. This adds up to a lose-lose situation where the government is not only hurting themselves, but their own people. This is a disturbing conclusion.
You are absolutely right. I am very aware of the business situation in the central pacific and *personally* know of several major developers that have pulled out. Several are in Ecuador and Panama right now. There are also a laundry list of other projects that are about to fail… they come to me trying to get me to build their websites and let me know the absolute critical juncture they have reached, overleveraged and not selling anything. I stay away, but because they all come to me, it does give me a lot of feedback on the business climate here, and its not looking good.
The new law only tells anyone crazy enough left to try a project here to beware. Besides, most developers I know don’t have residency anyways.. which during the construction process can be a nightmare if you have to leave several times. I have seen during these gaps of oversight, major problems develop costing people thousands of dollars to recover, not to mention the time value of money as people stop work and redo the screw ups.
Then again, no one asked the ticos if they wanted all that development, although there does seem to be a large number of them that grew very accustomed to feeding off the investors teet. Unfortunately they have now been bled dry and these leeches dont know what to do next.. they got spoiled these last few years thinking the money train of investors was limitless. right now is a serious reality check for everyone in the world. sad that the legislators are a few years behind the times, the way they are approaching this, it sounds like they still think its a booming economy.
I dispute the statements that say only the wealthy can meet new requirements. That would be true ONLY for those who are not retiring and want rentista status. Pensionados can still get in for a minimal amount. Two thousand dollars a month income is NOT wealthy by most developed country standards. Half to over three fourths of that amount is usually made up by social security benefits anyway. The remaining amounts can be made up by pension plans and where those do not exist, other instruments will serve such as a lifetime annuity.
The curent average social security recipient receives $1,090/month. 50% of the population earns less than $32,000/year. I conclude that at least 50% of the US population cannot afford Costa Rica. There are many that could make pensionista status now, but the those numbers will become less every year. “Real” income is on the decline.
The stats need to deal with the average lifetime salary of a retiree, not younger workers in the population. The average US salary is $45k. The average social security check for couples is $1721.
The average social security amount makes up more than three fourths the CR pensionado requirement. Most couples would not and COULD not retire in the US on $1100 a month. Hell, most couples would not retire in the US on twice that much. They will remain in the work force.
Those that looked at CR as a place to retire without having sufficient funds for a US retirement are indeed S-O-L. But those people are the poor in the US. Even those who have $2000 a month income cannot be considered rich by any standards except those of a developing country and even then, only marginally so. A monthly income of between $1100 and $2700 in CR puts you in the upper 20% of the population there but not the upper 10%. The upper 10% are the Tico wealthy.
Edited on Nov 29, 2008 08:22
Bear in mind, too, guys, that the income required for pensionado status in Costa Rica need not come from Social Security at all.
While many private pension plans have switched from the traditional “defined benefit” to the currently “popular” “defined contribution” schema, there are many, many Americans who still have stable, reliable defined benefit pensions. One need only look to the legion of military retirees, retirees from federal, state and local governments, public school teachers and retirees from public universities, among others, for a huge population of folks who, with or without Social Security, can meet the new Costa Rican income requirements.
And those who have been fortunate enough to have kept their defined benefit pensions (public or private) are probably overrepresented in the older, leading edge, of the baby boomer population. So, for the time being there will be plenty of Americans who can meet Costa Rica’s new $2,000 (per family) per month income requirement.
Hmmm . . . Maybe Costa Rica should make the requirement higher still.
“there will be plenty of Americans who can meet Costa Rica’s new $2,000 (per family) per month income requirement.”
Is the proposal $2000 per family or per individual? I thought it was per person—-
ed f
The requirements for rentitsta status have always been couched in terms of the individual regardless of marital status. The requirements for pensionado status have always been stated in terms of family income. When my wife and I applied for our pensionado residency, we submitted proof of my income alone which was less than hers at the time. There was no problem.
Has someone read somewhere reliable that the proposed new pensionado income requirement is actually $2,000US per month *per person*? Why do you think it’s $2,000 per person, ed f?
I’ve not seen nor heard anything that implies that this financial requirement has gone from “per family” to “per person” and if that’s the case, then even MORE gringos will have to leave because personally, I know not a single pensionado who is getting four grand a month between the two of them, although they did change the rentista status to a per person requirement and then added in the dependent requirement of an additional $500 per month. At $2000 for the qualifying applicant, they would probably also need to include the spouse’s income to qualify and I don’t know how that works in the pensionado category since it’s usually granted on the basis of the one spouse whose income meets the current monetary requirement.
David,
I have not read any text in the news articles or the forums that led me to believe pensionado was per family, only that rentista was per individual. After a little searching this was found at http://www.residencyincostarica.com/news_updates.html
Still unclear—-“PENSIONADO APPLICANTS:
Article 78: Would require that pensionado applicants prove a monthly pension of Two Thousand dollars ($2,000). The current requirement is only $600.00. The same $600 amount applies when applying as a single applicant or as husband & wife couple. It is not clear if the new proposed requirement applies to both a single person or to a couple.”
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