The REAL Costa Rica
 


Working in Costa Rica and Labor Laws

 Ravi TahilramaniOften people want to come to Costa Rica to live but also want (or need) to either work here or at least hold some form of part-time job to supplement their income. Some are retirees while other are younger who  just want to work and live in another country.  For the most part, but with a couple of exceptions, you cannot work at all in Costa Rica unless you have gained Permanent Residency or are a citizen of Costa Rica.

Laws here, as in many countries (including the USA) are designed to protect workers here from foreigners who would take jobs that would otherwise be filled by a Costa Rican.

The only exceptions to this rule is an annual work permit or two specific types of residency. 

Legally Working in Costa Rica

If you are highly skilled in an area where that job cannot be filled by a Costa Rican, the employer can apply for a work permit for one year. This is very difficult to get.  Costa Rica is not a third world country.  There is a large pool of highly literate and well trained people to fill nearly every job category. Teaching English, for example, is NOT a skill, so do not think you will get a work permit for that job regardless of what you may read.

In order to work here, you must either be a citizen of Costa Rica or have legal Permanent Residency.  With any other residency (rentista, pensionado, etc), you CAN own a business but you can not work in that business.  You must hire Costa Rican labor and your responsibility must be limited to management of your business.  No labor can be done by you that could be done by a Tico.

Finally, plan to earn about 10 to 15% of what you are earning now for the same job. If you are earning $100,000, you will maybe make $15,0000 here. Example: Journeyman auto mechanic making $90,000 in the USA will make maybe $15,000 here. Almost all jobs will require fluent (not tourist) Spanish.

Want an idea of what you will be paid (presuming you DO have legal Permanent Residency)?

Costa Rica has a minimum wage scale revised and published every six months by the Ministerio de Trabajo. Nearly every conceivable occupation is covered on the list. You may see this list HERE. It is in Spanish, of course, but is pretty easy to figure out. Remember, near fluent knowledge of Spanish will almost assuredly be a requirement of employment.

More and more popular are people who actually want and are able to "telecommute" internationally. By this I mean those who work for a company in their home country, i.e. USA, Great Britain, etc over the Internet. They are paid by their company, but physically reside in Costa Rica. Is this legal? YES! If you can talk your company into letting you work in a foreign country, you can work here and not violate the work laws. TWO CAVEATS!

  1. The paycheck or deposit must come from outside Costa Rica and your work must be unrelated to Costa Rica. Medical transcription or or computer programming might be good examples. The test would be if you are still employed by the foreign company doing the same job as you were in that company.

  2. You STILL must apply and be accepted as a legal resident. Under no circumstances can you just come here to work and not posses some form of legal residency, no matter from where cometh your paycheck. Younger people probably would apply as rentistas, then convert to Permanent Residency after 4-5 years.

OK...So who can work here? Generally, only those with Permanent Residency. Perhaps this graph will help clarify. 

Residency In Costa Rica
Comparison of Types of Residency

Pensionado Rentista Inversionista Representante Permanent
Requires proof of US$1,000 per month income from a permanent pension source or retirement fund. Requires absolute proof of US$2,500 per month for at least two years, guaranteed by a banking institution, OR a US$60,000 deposit in an approved Costa Rican bank.  Invest $200,000 in any new business OR a specified amount of investment in certain government approved sectors. Applicant must be director of a company meeting certain requirements, such as employing a minimum number of local workers as established by the labor law, with financial statements certified by a Public Accountant. First degree relative status with a Costa Rican Citizen (through marriage to citizen or having a Costa Rican child) OR may apply after 3 years in another residency
Must remain in country at least 4 months per year. Must remain in country at least 4 months per year. Must remain in country at least 6 months per year. Must remain in country at least 6 months per year. Must visit Costa Rica at least once per year.
Can claim spouse and dependants under 18 years of age. Can claim spouse and dependants under 18 years of age or over 18 if fully disabled. Cannot claim spouse and dependants under 18 years of age. (Must process separately) Cannot claim spouse and dependants under 18 years of age. (Must process separately) Cannot claim spouse and dependants under 18 years of age.
Cannot work as an employee. Cannot work as an employee. Income allowed from the project. Can earn an income from the company. Can work.
Can own a company and receive income. Can own a company and receive income. Can own a company and receive income. Can own a company and receive income. Can own a company and receive income.

 

For pensionado, rentista and inversionista, the obvious question is, "How can I own a company and not WORK in it?".  The answer is that you can manage the affairs of the business but you may not do any actual labor that can be done by an employee (Costa Rican).

Example:  Recently there was a gentleman who owned a Bed and Breakfast near one of the beaches in Costa Rica.  The B&B had a restaurant as part of the business.  One day, as he was helping out by bussing a table, in walked the immigration people who demanded to see his residency papers.  All was in order EXCEPT he was a pensionado and as such was NOT permitted to do the actual labor in his own business.  While not immediately deported, he had to go through a tremendous amount of trouble including appearances before immigration officials and he was nearly asked to leave the country.  He dodged a bullet, but was in no hurry to help clear tables again.

So to be clear, while you can own a business here and live off the income from that business, you cannot actually work in that company in any capacity other than owner and manager.

Representante is a form of residency most used by those who set up and manage businesses in Costa Rica and serve as a Director in that corporation.  Here, you can receive a salary and do the work of the corporation, but there are heavy investment minimums, a requirement for annual certified financial statements, and you must employ Tico labor in your business.  Currently, it is a grand hassle to do this, and immigration tends to make your life miserable by randomly and arbitrarily enforcing the (sometimes non-existent) rules.

A Permanent Resident has all the rights of a Costa Rican citizen except the right to vote.  As such, you can hold a job in any sector, own a company and work within that company in any capacity.

Need More Residency Information?

I suggest you contact the Association of Residents of Costa Rica

Residency rules and interpretation change all the time and
these people make it their business to keep current

 

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