There are a number of options open to foreigners who want to live in Costa Rica legally. North Americans and Europeans visiting Costa Rica are granted a three-month tourist visa on entering the country. After the three months have lapsed, tourists who want to extend their stay another three months can do so by hopping over the border to Nicaragua or Panama and remaining there for at least 72 hours. On reentering, they will be issued a new three-month visa. If your plan is to live in Costa Rica for just part of the year, then the three-month tourist visa may be all you’ll need. Having a tourist visa even allows you to open a bank account in the country (so long as you obtain a special document from your embassy). As things now stand, however, holders of tourist visas are not permitted to buy cell phone service from the state telephone company (note: there is a move afoot to sell cell phones with prepaid minutes to anyone, including tourists).

In actual practice, many expatriates have been living in Costa Rica for years with nothing more than a tourist visa in hand. If you, however, decide that you want to live in Costa Rica permanently—especially if you are going to buy property in the country—the author recommends that you establish some form of legal residency here; the government has begun to look upon “permanent tourists” with a somewhat unwelcoming eye, and there has been talk of passing legislation that would restrict the number of times that a tourist visa can be renewed within a given period of time.

Although politicians talk now and then about reforming current immigration policies, as things now stand foreigners can establish legal residency in one of four ways. The majority of expatriates establish residency by claiming pensioner status. Individuals who apply for this type of residency permit must prove that they receive at least $600 per month, either from U.S. Social Security (or some other state plan) or from a private pension program. In addition, pensioners (pensionados in Spanish) are required to convert an annual minimum amount of $7,200 into colones at a state bank. If you are under the U.S. Social Security program, you can have your pension payment wired to your bank account in Costa Rica or, alternatively, you can pick up your pension check at the U.S. Embassy in San Jose. Dependents of someone granted pensioner status are also allowed to live in the country legally. Pensioners are not allowed to work, but can own a business. Once granted pensioner status, you must live in the country for at least four months per year in order to maintain your status. After two years, you are eligible to apply for permanent residency (see below). (Costa Rica used to offer tax breaks to pensioners in order to induce them to live in the country; those incentives were abolished in 1992, when the Supreme Court of Costa Rica ruled it unconstitutional to give foreign residents tax breaks not also offered to Costa Ricans.)

People who are not retired but who receive a monthly income (from an annuity or other financial instrument) of at least $1,000 per month can apply for rentista status (rentista refers to someone who receives income from a source other than employment). To qualify, you must deposit $60,000 in a Costa Rican bank, which is the equivalent of 5 years worth of $1,000 monthly payments. You can continue to draw money from this account, but at the end of the five-year period, you’ll be required to deposit another $60,000. Dependents of rentistas are also allowed to live in the country legally. Rentistas, like pensioners, can own a business. They are required to live in the country for at least four months per year in order to maintain rentista status. After two years, rentistas are eligible to apply for permanent residency (see below).

A third way to establish legal residency is to invest in the country. To become eligible for investor (inversionista) status, you must either invest $50,000 in a tourism business (or other high priority business), $100,000 in a reforestation project, or $200,000 in any other kind of business venture. Unlike pensioners and rentistas, investors are not allowed to bring in dependents. They are required to live at least 6 months of the year in the country in order to maintain their residency status; after two years, investors can apply for permanent residency.

Foreigners can establish permanent residency in one of several ways. First, they can marry a Costa Rican citizen and then apply for permanent residency. Second, if a non-Costa Rican citizen gives birth while in Costa Rica, then she (and her foreign-born husband) can apply for permanent residency (their child is automatically granted Costa Rican citizenship by virtue of having been born in the country). Permanent residents are required to spend at least a week each year in the country in order to maintain their permanent resident status. They can work in the country and also own their own business. Another way to establish permanent residency is to first establish pensioner, rentista, or investor status and then, after two years, to apply for permanent residency. Once you have established permanent residency, you are eligible to apply for Costa Rican citizenship after having lived in the country for five years as a permanent resident.