Would you like to enjoy spring and summer temperatures year round? Do you like stunning panoramic vistas and enjoy watching the sun rise or set over the ocean? Are you looking to retire early, or live better with less money? Would you like to own a farm or enjoy exuberant natural beauty every day? Well then, Costa Rica might be a great place for you to work in, or to enjoy your retirement.
Why people like Costa Rica
Since the 1980s Costa Rica has been a popular haven for expats. The majority of expatriates here are Americans, but there are also large Spanish, British, Italian, French and German communities in Costa Rica. Expatriates are attracted by the warm tropical climate, stunning natural beauty and friendly ticos (the local nickname for Costa Ricans) For retirees the lower property costs and cost of living are also important, and for multinational corporations, NGOs and individuals the stable democratic government and lack of armed forces are big advantages that Costa Rica offers.
Nearly 1.5 million tourists will visit Costa Rica in 2005, and the tourist attractions are great for residents too. Depending upon how adventurous you are, you can enjoy: diving, surfing, sport fishing, birdwatching, sailing, kayaking, abseiling, wind surfing, parasailing, bungy jumping and golfing. Nature’s wonders include: waterfalls, volcanoes, birds, animals, flowers and other plants, butterflies, marine life and (of course) beaches. Residents enjoy discounts on all of these activities and most hotels offer low season specials and resident rates too.
Ticos are well educated, friendly, and easy going. While it is helpful to speak basic Spanish, or at least take classes when you arrive, it is not absolutely essential. So many professional ticos speak English at work, or went to bilingual schools, that you can almost always find an English-speaking person willing to help a “gringo” in need.
Financially speaking, Costa Rica offers a lower cost of living to expatriates and property is relatively inexpensive. You can probably exchange your current urban residence in any major city in Europe or the US for a comparable home on or near the beach, or in the country, or in one of San José’s many exclusive neighbourhoods. If your home is in a big city like London, Los Angeles or New York, then you will surely come out ahead in the bargain. Property prices are generally quoted in US dollars, so Europeans currently enjoy a big currency exchange advantage.
Costa Rica has no capital gains tax, no tax on income earned outside the country and a reasonable sales tax (currently 13%). High taxes do exist on luxury appliances, electronic gear, cars and petrol. A big area of savings is in utilities. The mild climate makes air conditioning or heating unnecessary in most areas, and the electricity bill will reflect your savings. Also, the utilities are state-owned, so residential telephone service, water, and electricity are less expensive than in most more developed countries.
What kinds of properties expats buy here and why
Beach property – A few days at a luxury hotel on the beach and many holidaymakers are ready to sign on the dotted line. Many purchase condos in beach communities that have a property management programme. This allows them to earn money on their investment until they retire, and also they can still enjoy using the property whenever they would like to holiday here. You may choose to live ON the beach, near the beach, or looking over the ocean. Generally the further you are from the beach the less expensive, but there are still inexpensive beachfront homes or farms available in some areas.
Urban Living – Many expatriates prefer living in the city, either due to work commitments or because they enjoy the activities the city offers. Here you can choose from hi-rise condominiums, gated condo communities, or an independent home.
Country Homes – Often you can get the best of both worlds by buying a “quinta”. That’s a property from 1,000 m² to 3 hectares. This is big enough to allow you to grow your own flowers, to have a vegetable garden, to plant fruit trees or even to have horses or cattle.
Farms – Land is great value here. Many foreigners purchase farms in order to introduce new products, and exports of non-traditional agricultural goods have grown exponentially in the last decade. Some products that have had success are ornamental flowers, fisheries (tilapia and trout), and organic produce.
Basic residency permits and the job market
Most tourists don’t need a visa and can stay for up to 90 days. Some long-term expats live here as “perpetual tourists”, leaving the country every 90 days for 72 hours or paying the nominal fines for overstaying. Recent crackdowns by immigration have made it advisable to acquire a more formal residency or work permit if you plan to own a business or property.
While technically you may apply for the residency yourself, it is very wise to get a lawyer specialising in these matters to make the application for you. You must hire a lawyer registered with the Costa Rican bar association. A good lawyer will charge from $1,000 to $1,500 for the process. Types of residency and the requirements:
Residency for Pensioners or Retirees (Pensionados or Rentistas) – If you earn $600 per month from your pension, or $1000 a month from your investments, you can qualify for these permits.
Residency for Investors (Inversionista) – If you invest in a local business in Costa Rica. According to the Center for the Promotion of Exports and Investments (PROCOMER), the current priority investment areas of business are ornamental plants, leather articles, spices, fruits and vegetables, processed foods, wood products, and tourism. You will be required to invest at least $50,000 in one of these areas. If you prefer an area of investment not listed by PROCOMER, you must invest $200,000 in that business. Another option is a reforestation project with a minimum investment of $100,000. You must live in Costa Rica for six months per year and will not be required to maintain a minimum monthly income.
Work Permits – If you are a qualified business executive, a qualified technician from an accredited institution, a qualified worker in an educational center with a special contract, or a domestic servant, you can get a work permit or temporary residency.
The job market in Costa Rica
Wages are very low in Costa Rica. Secretarial, clerical or customer service positions will earn only about $300 per month, more technical positions can earn from $500 to $1,000. Most public employees and managerial positions rely on benefits and bonuses to make up the difference for the low salary. In December of every year employees receive an annual bonus called an “aguinaldo”. It is approximately one month’s salary, if they have worked the entire year for the same employer.
There is a growing industry customer service or call centres that is beneficial to English speakers, this is due to increased outsourcing by multinational companies. These positions pay well compared to normal salaries and any expatriate with teaching skills or supervision skills could very well find opportunities here.
Another opportunity might exist for those that are multilingual, this would be in the tourism industry. There are plenty of English speakers, but German, French and Italian speakers are not very common. With the local economy essentially based on the US dollar, Europeans should find travel to Costa Rica increasingly affordable. The Asian tsunami has made European tourists look for alternative vacation spots and local operators seem to think that Costa Rica would be a good choice for them.
The truly best alternative is to be hired from the US or Europe or transfer with a company you already work for. You will command a higher salary than people hired locally and therefore be able to benefit from the lower cost of living. Work permits would then be arranged by your employer, who will explain to Immigration why they need a foreigner instead of a local.
Costa Rica quick facts
Capital: San José
Area: 51,100 km² (19,730 sq miles)
Language: Spanish is the official language, in the Caribbean province of Limón patois is spoken by the African-Caribbean population and 8 indigenous groups speak their own languages.
Currency: Colón; US dollars are widely accepted and local banks offer US dollar and euro accounts
Time zone: GMT – 6 hours