Often 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. 

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. Under the current administrations, this is almost impossible to get, and even under prior administrations, it was very difficult.  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.

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.

Perhaps this graph will help clarify this policy. 

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 the 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.