Costa Rica: Different Migratory Alternatives for Incorporating Foreign Talent Residing in Costa Rica into Your Operation

Our Costa Rica immigration lawyers share this article on the immigration categories available for employers who wish to incorporate international talent as part of their workforce, as well as for those foreigners who wish to work from Costa Rica for their employers located abroad.

Migratory Categories, learn about the different alternatives to incorporate foreign talent to your local operation or to incorporate foreign talent domiciled in Costa Rica to your operation abroad.

In Costa Rica there is a vast variety of immigration categories for stable and legal residence in the country. This article will focus on those categories applicable to foreigners who wish to work legally in Costa Rica, either for a company domiciled in the country or for a company domiciled abroad.

Additionally, all the important elements will be shared, to take into consideration and that are of great interest both for local employers, who wish to incorporate on a temporary or permanent basis foreign personnel, as part of their local operation, as well as for the companies that wish to send to Costa Rica personnel hired by a foreign entity to perform job duties in the country; likewise, this article is of interest to those foreigners who wish to live in Costa Rica, either to work locally, or are under a remote work relationship with an employer domiciled outside the country and wish to live in Costa Rica.

Before sharing with the reader, the different categories that are available, it is important to point out that we will only be sharing the requirements that are of most interest; however, there are additional requirements that must be submitted on a case-by-case basis.

Before starting with the explanation of the migratory categories, it is of great relevance to share with the reader certain generalities applicable to all, or most of the categories that will be mentioned later, which are not commonly known but are vital to make an informed decision.

Generalities of opt for one of the migratory categories detailed in this article.

i. It is necessary for the foreigner to be in Costa Rica to be able to file the immigration application. The Costa Rican immigration authorities request the applicant to be in the country with a valid tourist visa at the time of the submission of the immigration process.

The entry of a foreigner under the category of tourist is regulated by the General Guidelines for Entry and Stay Visas for Non-Residents. Said regulation divides the different nationalities into four migratory groups, groups A and B may enter the country without the need to apply for any type of visa, while those who belong to group C will require a consular visa to enter the country, while those who belong to group D must apply for a restricted visa to enter Costa Rican territory. The tourist visa may be granted for a period of 90 days, extendable to a total of 180 days, but there will be exceptional cases in which the tourist visa will not be granted for longer than 30 days, without being extendable.

Having said the above, it is important to indicate that the Costa Rican immigration police will be, at the time of entry into the country, the authority in charge of establishing the maximum length of stay by virtue of the purpose of the visit that the foreign person will have in the country.

ii. Once the immigration process has been filed, the foreigner may leave or remain in the country, under the category of tourist until the resolution of the immigration process, as established in article 33 of the General Law of Immigration and Foreigners. During said period the applicant may not develop any other activity that is not proper of a tourist, who is visiting our country; for example, during such period, the foreigner who wishes to work for a local employer may not do so legally until the immigration authorities approve the application submitted for such purposes.

iii. As a tourist in Costa Rica, the foreigner may drive with his/her passport and valid foreign license. However, it is important to indicate that the extension of the legal stay in the country established under Article 33 of the General Law of Immigration and Foreigners, does not extend for the purpose of driving legally in the country; Therefore, in case the foreigner wishes to continue driving legally, he/she must leave the country once the entry stamp in his/her passport expires and re-enter the country complying again with the requirements that were requested for the first entry to the country, a process that must be carried out repeatedly until he/she has his/her identity document for foreigners, known as DIMEX.

Additionally, during his stay in the country as a tourist, foreigners may request the opening of bank accounts, which will be conditioned by the terms and conditions established by each banking entity, may incorporate their children to the Costa Rican educational system, mainly those centers of the private sector, and may also sign contracts to rent a house, buy a house, sign contracts to obtain public electricity and water services, along with contracts to obtain telephone and internet services.

iv. All foreigners who wish to opt for one of the immigration categories explained in this article must have a company or employer to support their application. In the case of local work to be performed for employers domiciled in Costa Rica, there must be an employer interested in initiating an employment relationship, while in the case of a foreigner who will perform work from Costa Rica for an employer domiciled abroad, there must be an already existing employment relationship.

v. All foreigners who wish to apply for one of the immigration categories detailed in this article, apart from the visa for digital nomads, must submit a birth certificate from their country of origin. This document, as well as any other document required by the immigration authorities, must be submitted in Spanish and must be duly legalized or apostilled, for which it is necessary to verify whether the foreigner's country of birth is part or not of the Haya Convention.

Those documents that do not have an expiration term duly established at the time of issuance, will have a term of six months; counted from the time of issuance of the document, as established in Article 10 of the Foreigners Bylaw.

vi. Annually, the Ministry of Labor and Social Security issues the guideline called "Not Recommended Occupations for the Granting of the Migratory-Labor Categories of Temporary Residence and Specific Occupation Workers", which establishes the job positions that may not be performed during such period by foreign employees, in order to avoid the displacement of the Costa Rican labor force, based on the current unemployment rate; therefore, prior to the submission of the application of any worker who is going to perform local work for an employer domiciled in Costa Rica, it is necessary to perform a prior review, to determine whether or not the job position to be performed can be filled by a foreigner.

vii. Those foreigners who have served a sentence for an intentional crime in the last ten years or who have been sentenced for sexual crimes against minors or who have served a sentence for any of these crimes in the last fifty years, will not be eligible for any immigration category, and may not even be authorized to enter the country.

viii. All foreigners must remain at least 180 days in the country per year of stay to be able to safely renew their migratory category. In case the foreigner does not comply with such provision in addition to the other legal requirements requested by law, it will be at the discretion of the immigration authorities to authorize or not the renewal of his or her identity document for foreigners. In case the renewal request is not approved, the migratory category will be cancelled, and the foreigner must leave the country within the term granted.

Having said the above, in the following subsections you will find relevant information on each of the main immigration categories used by foreign individuals and their employers to perform local work for companies domiciled in Costa Rica, as well as for companies domiciled abroad. We will begin with those applicable to workers who will perform job duties in Costa Rican territory for local companies:

Temporary Residence for Executives, Representatives, Managers and Technical Personnel and their Dependents:
This immigration category is reserved for those foreigners who will perform critical work of vital importance for the development of the local operation. Such workers must receive a payment of at least 25% more than the minimum wage established by the Costa Rican Ministry of Labor and Social Security for such period, in accordance with the type of job position to be performed.

In order to apply for such migratory category, it is necessary to demonstrate the qualifications of the foreigner, including the academic and professional background. Additionally, it is necessary to demonstrate the reasons why the foreigner is required to perform such functions, instead of a Costa Rican worker.

This category allows the application for temporary residences for their dependents, being these the spouses, minor children, children under 25 years of age who are exclusively studying; as well as those children over 25 years of age with a duly demonstrated disability. In order to apply for such temporary residence, it is necessary that the family member is economically dependent of the main applicant.

In order to submit the immigration process, the principal applicant in addition to a birth certificate must submit a duly apostilled criminal record certificate, together with a statement of work experience and a labor contract or job offer duly signed by both parties. Additionally, if the company is not recognized before the Immigration Authorities, it must submit the following documentation to support the commercial activity it currently carries out in the country:

• Certified copy of the legal representative's identity document.
• Certificate of incumbency issued by the National Registry.
• Certification of employer being up to date with the social security payments issued by the social security authorities.
• Proof of labor risk policy issued by the National Insurance Institute.
• Copy of the last income tax return.
• Certification of income and balance sheet issued by a certified public accountant.
• Certification of being up to date with the payment of municipal and national taxes.
• Certification of sanitary permit, issued by the Ministry of Health.

Dependents must submit, in addition to their birth certificate, a criminal record certificate, spouses must submit a marriage certificate and a child with disabilities must submit a certificate of their condition, all documents must be submitted in Spanish and duly apostilled or legalized.

Once the immigration application is approved, the foreigner must be registered as a worker before the Costa Rican social security and the dependents as beneficiaries of such insurance. In accordance with the immigration regulations, until such resolution is notified, the foreign and the employer may not begin the execution of the labor relationship.

The temporary resident and the dependents will have such category for a term of two years, renewable for equal periods, as long as the employment relationship remains in force. In case the employer of the foreigner changes, even if it is between legal entities of the same business group, a change of employer must be requested to the immigration authorities.

Such temporary resident together with his/her dependents, once they have accumulated three continuous years under the temporary resident category, may initiate the process to opt for the permanent resident category.

Having shared the above, this migratory category is recognized as one of the most striking, since it grants the foreigner a series of benefits, such as the possibility of opting for permanent residence and the possibility of making migratory applications for their dependents; both benefits that are not granted to other foreigners who can only opt for the category of worker of specific occupation.

Occupation-Specific Work Permit for Occupation Specific Worker
This category is reserved for foreign workers who have an employer interested in starting an employment relationship and who cannot apply for the temporary residency category explained above, either because of their lack of work-academic experience or because they do not come to perform critical job duties for the development of the local operation.

To opt for such work permit, the foreigner must submit, in addition to the birth certificate, the criminal record certificate duly apostilled or legalized, together with the employment contract or job offer. Additionally, if the company is not recognized by the immigration authorities, it must file the same documentation as indicated in the previous section.

The work permit may be granted both to employers who are legal entities and to employers who are a legal person; in which case the requirements to be filed by the employer are the following:

• Copy of the employer's identity document.
• Proof of economic solvency. Such as: certification of income issued by a certified public accountant, proof of salary, among others.
• Pension certificate in case of being a retired employer.

To opt for such migratory category, it is necessary to demonstrate the reasons why such foreigner is required to perform such job duties instead of a Costa Rican worker.

This migratory category is granted for a period of one year, renewable for equal periods, as long as the employment relationship remains active. Unlike what is indicated in the previous migratory category, this category does not allow the foreigner the possibility of filing an application for permanent residence after three continuous years of having the category of worker of a specific occupation. Additionally, this migratory category does not allow the inclusion of dependents.

Having briefly explained the two immigration categories most commonly used by companies domiciled in Costa Rica that wish to incorporate foreign personnel as part of their workforce, is relevant to share the challenges that currently surround the processing of such applications before the immigration authorities, as well as the possible alternatives to move forward with such processes in a more expeditious manner, in order to provide the reader with a comprehensive perspective of the processing of such applications.

Current situation in the processing of migratory processes
Currently in Costa Rica a significant delay in the resolution of the processes that are submitted before the General Directorate of Migration and Foreigners is experienced, with an approximate resolution time between one and two years once submitted.

This situation can generate frustration, since the commercial activities of the companies do not allow waiting for a resolution by the immigration authorities for one or two years or even in some occasions a longer term to be able to start the labor relationship; since as we indicated, in order for the foreign to start working legally in the country, it is necessary that the immigration authorities have resolved the request submitted by the parties.

Having said the above, some companies that are inclined to begin to execute such labor relationship prior to receiving the authorization from the immigration authorities, however, this decision generates a series of contingencies, which are:

• Possible deportation of the foreigner since he/she was in Costa Rican territory working as a tourist.
• Possible application of an economic sanction for the company of approximately no more than 11,000.00 American dollars as established in article 177 of the General Law of Migration and Foreigners.
• Possible application of a penalty of 100.00 American dollars per month of illegal stay to the foreigner. Such penalty would be applied from the moment the labor relationship was irregularly initiated.

Thus, to avoid the application of these sanctions more companies are deciding to proceed with the registration of their company before the immigration authorities, for the following reasons.

Registration of Companies before the General Directorate of Immigration and Foreigners and the Migratory Regularization of their Personnel.
Such registration process before the immigration authorities are becoming more and more common since according to the Regulation for the Registration of Companies before the General Directorate of Immigration and the Immigration Regularization of its Personnel, companies that are registered before the immigration authorities have an exception established at a regulatory level that allows them to legally initiate the labor relationship with a foreign worker, once the application process for temporary residence or work permit, as it is commonly known, has been filed. Thus, companies do not have to wait years for the resolution of the immigration process.

For these purposes, the immigration authorities have established a series of special categories for companies to register with such authorities, a process that currently takes approximately three to four months to be resolved, based on our experience. The categories enabled by our immigration authorities are:

• Category A: For those companies that are operating or will start operations under special export promotion regimes.
• Category B: For those companies that are exporting goods or services outside of special export promotion regimes or carrying out research and development activities.
• Category C: For those companies operating in the tourism sector in Costa Rica.
• Category D: For those companies that are operating in the financial area in Costa Rica.
• Category E: For those companies that are in the process of installation or are operating in the telecommunications area in Costa Rica.
• Category F: For those companies that do not fall into any of the above classifications, characterized by being multinationals whose parent company decided to establish a subsidiary in Costa Rica. To qualify for this category, it is necessary to demonstrate the active operation of the company in three countries in addition to the operation in Costa Rica.
• Category G: For those national or foreign companies that are operating or are about to start operations in Costa Rica and are awarded a public contract.
  

The registration of the company before the Costa Rican immigration authorities, in addition to the benefit of being able to initiate the labor relationship with a foreigner once the immigration process is filed, provides another benefit that is highly striking, which is: the possibility of using the digital platform known as Trámite Ya, for the submission and processing of the immigration processes of its workers.

This platform significantly speeds up the resolution period, going from a waiting time of years to months; this in turn makes it more attractive for foreign workers who already provide their services for another entity of the group to move to Costa Rica, since they are certain that they will not have to wait years to be able to drive legally in the country without having to leave Costa Rica when their entry stamp in their passport expires, or without the need to wait years to apply for numerous banking procedures, such as applying for a loan for the purchase of a home, the possibility of opening bank accounts more easily in the country, and a number of other day-to-day processes.

Having shared the above, we will now share the two categories most used by those foreigners who wish to come to Costa Rica, but do not have as an objective to perform local work for employers domiciled in Costa Rica, since their employer is located abroad. The first category we will share is the Visa for International Remote Workers and Service Providers of Character (Digital Nomads).

International Remote Workers and Service Providers Visa (Digital Nomads):
The present migratory category is one of the most recent additions to the Costa Rican regulatory framework, which was created with the purpose of increasing the extended stays of foreigners in the country.

This category was incorporated due to the increase in the modality of remote work worldwide, as a direct consequence of the Covid 19 pandemic, also, it is considered a stay visa that applies to those workers who work exclusively for an employer abroad and is commonly known as Digital Nomad Visa. Once this visa is approved, it will be granted for a period of one year, extendable for an equal additional period.

To qualify for this migratory category, the foreigner must have a monthly income of at least three thousand dollars from abroad. In case of applying for a visa, it must be demonstrated that the foreigner has earned such minimum amount for the last twelve months prior to the filing of the application. Such requirement is usually demonstrated by providing the bank statements of the foreign person for such period. Additionally, to obtain such visa, it is an indispensable requirement that the foreigner does not receive any salary or amount for services in Costa Rica.

This migratory category allows the application for visas for their dependents in case the applicant is going to apply for such additional visas, the principal applicant must demonstrate an income of at least three thousand dollars for the last twelve months and instead must demonstrate an income of at least four thousand dollars. As in the case of the temporary residency processes, it is necessary that the dependents be economically dependent of the principal applicant. In addition, the dependents included in the temporary residency section have the possibility to apply for a visa as a dependent for their common-law partner, who must be duly registered in the corresponding country.

For the submission of said procedure, the foreigner is exempt from filing the birth certificate, and must only file the national certificate of criminal record, plus the bank statements for the last twelve months together with other formal requirements. However, since such foreigners are exempted from the obligation to register with the Costa Rican social security authorities, it is necessary that the foreigner provides a private medical insurance that covers him /her and the dependents in case of any illness for an amount not less than fifty thousand dollars per applicant, such medical insurance may be granted by a foreign or local insurance company duly endorsed for this purpose.

The principal applicant who is granted such visa will have at his / her disposal a series of tax benefits:

• 100% exemption on income tax.
• Exemption from all import taxes on basic personal computer, information technology and telecommunications equipment necessary for the performance of their duties. It is understood as necessary equipment for the performance of their duties, items such as: laptop computer, telephone, tablet, camera, sound reproduction device and its accessories. Applicable on a case-by-case basis.

Now then, such migratory category imposes a series of restrictions to those who hold it, the main one as detailed above is the impossibility to perform any work or service for a local entity, person, or employer, being able only to perform functions for persons or employers domiciled abroad. Additionally, such foreigners are only authorized to open savings accounts in the country.

This category, as in the process commonly known as work permit, does not allow the foreigner to opt for the category of permanent residence in the country. Finally, this category, can only be renewed for another equal period, for a total of two years.

This category has been highly attractive and used by foreigners of different nationalities, its resolution period, unlike what happens in other migratory categories, is approximately three to four months according to our experience.

Now, to conclude this article, find below an explanation regarding the stay visa, another category applicable to workers who must come to the country for specific business situations on behalf of their employer domiciled abroad.

Stay Visa
This migratory category consists in the authorization to stay in the country to foreigner based on his or her specialty in the scientific, professional, economic, political, religious, cultural or sports fields. As well as to foreign persons who, without earning salaries or fees in the country, must enter the country as business agents, traveling agents, commercial delegates, to attend to matters related to the activities of the companies or legal entities they represent.

Among the functions that such persons may perform in the country are attending meetings as representatives of their employer, advising or being part of the opening of operations in a country, generating new business or commercial alliances, providing training or education, or other similar functions; in general terms, these functions are not part of the functions normally performed by local workers or are not considered day-to-day functions of the local operation.

This migratory category is granted for a maximum term of one year, extendable for an additional period equivalent to the first period granted, i.e., it is granted for a maximum of two years. Under this category, the foreigner, as in the case of the Digital Nomad Visa, is exempt from registering before the social security authorities, since he/she does not earn a salary and does not perform work that is considered local. Unlike what happens in the Digital Nomad category, this type of application does not allow the inclusion of additional applications for their dependents.

To file this migratory category process, the foreigner in addition to the birth certificate and criminal record duly apostilled or legalized according to the country of issuance of the documents, must submit, among other requirements, a letter issued by one of the powers of the State or public or private institution, company, or by the universities or university colleges, where the reasons for which they request the permanence of the foreigner in the country are indicated.

On the other hand, unlike the Digital Nomad Visa, which is also part of the group of stay visas, this category does not exempt the foreigner from being considered a tax resident; therefore, for tax purposes in the country, he/she must file the corresponding returns, according to the Costa Rican tax regulations.

This category is a highly attractive alternative for transnational companies or companies not domiciled in the country that wish to open operations in Costa Rica since it allows the entry and stay for a maximum of two years for their commercial delegates in order, for example, to carry out all the preliminary steps to start a local operation.

As a conclusion find below the most important points shared for your reflection and analysis:

• For the presentation of the procedure, it is required that the foreigner is in Costa Rica, covered by the term granted in the tourist visa.
• Once the application has been filed, the foreigner may remain in the country as a tourist until the resolution of the immigration process.
• Not all immigration categories allow the processing of applications for their dependents.
• Currently, the company's registration with the immigration authorities is a fundamental element in navigating an immigration system that does not yet work as quickly as expected for companies whose business activities do not allow them to wait for long periods of time for an immigration resolution that will allow foreigners to work legally in Costa Rica
• All immigration categories for renewal require a stay in the country per year of granting of at least 180 days.
• Before carrying out any immigration procedure for local labor purposes in Costa Rica for companies domiciled in the country, it is necessary to previously make an evaluation of the work that the worker will perform to determine if he/she is eligible for any immigration category, as well as to define the one that best applies to him/her.
  

We hope this information will be useful. If you have any questions, please do not hesitate to contact us at Carolina.Soto@ariaslaw.com or Fabiola.Tames@ariaslaw.com.

Author:
Fabiola Tames - Associate, ARIAS Costa Rica.


The information provided by ARIAS® is presented for informational purposes only. This information is not legal advice and is not intended to create, and does not constitute, an attorney-client relationship. Readers should not act upon this information without seeking advice from professional advisers