FAQ and summary of the Bill to Regulate the Re-entry / Perpetual Tourist Status in Costa Rica

**Context of the Project** 

Recently, countries in visa group 1, which includes the USA and Canada, have been authorized to travel to Costa Rica as tourists for up to 180 days. However, there has been abuse of this opportunity, prompting the Costa Rican authorities to limit perpetual tourism. 

Its important to clarify that duration of the visa stamp granted is not a absolute civil right; it is at the discretion of the government and the Immigration Office of Costa Rica named DGME, who may authorize between 15 to 180 days of visa stamp permission for the Expat. If there are suspicions of constant re-entry, the immigration officer has the authority to reduce the period of the entry stamp.

The primary objective of this project is to regulate the practice known as "visa run" or "border run." This practice involves foreigners leaving Costa Rica temporarily to a neighboring country (such as Panama or Nicaragua) just before their legal period of stay as tourists expires. Their intention is to renew their stay permit upon re-entering Costa Rica, which allows them to enjoy an indefinite stay without applying for legal residency. Additionally, some foreigners offer tourism, real estate, and even legal advice without being licensed, thereby working illegally without a permit in Costa Rica.

This initiative arises from growing concerns about the "visa run" phenomenon, which allows many tourists to exploit a legal loophole to stay indefinitely in the country without obtaining residency status and without contributing to Costa Rica's Social Security. This situation has necessitated a review and update of immigration regulations to ensure they are aligned with the original intentions of the General Immigration Law.

Problems Identified:

One prominent problem is the lack of adequate monitoring of tourists entering the country. Additionally, companies run by foreigners have emerged that facilitate and promote the "visa run" practice, as well as provide services such as real estate transactions without the necessary work permits. This complicates effective control over the duration of stay and re-entry for these individuals.

For foreigners, purchasing property, vehicles, or opening a limited liability company (LLC) under a changing passport number generates legal insecurity, as they lack a valid identity document in Costa Rica. Another issue arises from opening LLCs to hold property, which conceals their irregular status in Costa Rica. This presents two disadvantages: first, if the property is in an LLC, the individual cannot apply for legal residency in Costa Rica since the property must be in their personal name; second, creating an LLC using an unstable identification like a passport number is risky, as advised incorrectly by real estate lawyers or local advisors. Costa Ricans typically do not establish LLCs to buy property, making it unnecessary for those intending to reside in Costa Rica. For this reason, seeking advice from a trustworthy Costa Rican immigration lawyer is critical. Relying on unqualified third parties on social media can lead to wasted time and money.

Impact on Society: 

The influx of tourists has significantly affected coastal communities and other town areas with high tourist traffic. Costa Rican citizens have expressed concern about land acquisition by foreigners, leading to gentrification—a process of urban renewal and redevelopment that displaces vulnerable residents, increases living costs, and limits opportunities for local small and medium-sized local businesses.

International Comparison: 

Gentrification is a common issue affecting many countries, including those in Europe. International conventions and proposals aimed at strengthening migration laws seek to protect both local inhabitants and foreigners positively impacting the community. Countries in the Schengen Area, for instance, have implemented strict regulations to avoid situations similar to "visa runs," introducing severe penalties for those attempting to evade these laws, including re-entry bans for up to five years and classification as illegal immigrants.

Project Proposals: 

In light of the current situation, the bill proposes the establishment of stricter regulations to better manage the presence of foreigners as perpetual tourists. It includes exceptions for specific groups, such as individuals with temporary and permanent residency and those who has a complete open application request at the DGME, plus those in transit, to avoid hindering certain activities.

Establishment of Fines:

The bill proposes a significant increase in fines for those who overstay their visa as irregular perpetual tourists. Fines will be set at $300 per month for each month a tourist remains in the country without legal authorization. This measure aims to deter foreigners from abusing their immigration status.

Period of Prohibition of Re-entry:

Tourists who exceed their permitted period of stay will be prohibited from re-entering the country in the same migratory status for 90 days. This restriction is intended to prevent "visa runs" and ensure that tourists adhere to immigration laws. Those wishing to live in Costa Rica must follow the legal process to apply for residency. Tourism is intended for short stays to explore and enjoy the country. Activities such as purchasing property, enrolling children in schools, and more should be approached with caution. 

Conclusion and Recommendations by Expats Legal Services Costa Rica.

The bill regulating the re-entry of foreigners in perpetual tourist status is a significant step toward fairer and more efficient migration management in Costa Rica. Through specific measures, it aims to control migration effectively while also safeguarding the rights and needs of the Costa Rican population, thereby ensuring equitable and sustainable development.

• If you choose to live in Costa Rica, it is advisable to apply for legal residency. Before purchasing property, consult with an immigration lawyer, as improper management of the property purchase can impact your residency process.

  
  

• Buying property valued at least $150,000 in your name (rather than under a corporation, LLC, or S.R.L.) offers a direct path to obtaining legal residency in Costa Rica.

  
  

• It is vital to create a strategy from the beginning rather than simply purchasing property and then attempting to navigate the legalities of relocation.

**Legislative Modifications**

Among the proposed amendments is a revision to Article 33 of the General Immigration Law, which suggests an increase in fines for irregular stays. This revenue will be utilized to enhance the capabilities and services of the DGME (Dirección General de Migración y Extranjería). Additionally, a new paragraph will be added to Article 91, stating that tourists may not re-enter the country in the same migratory status for 90 days following the expiration of their legal stay. The goal of this legislative project is not only to strengthen immigration management in Costa Rica but also to protect the socioeconomic interests of the Costa Rican population in light of the growing presence of foreigners as perpetual tourists.

    1.  Would property owners be exempt or treated differently under the proposed changes?

No. As it stands, the bill does not differentiate property owners from anyone else. It is a risk that a foreign person, whether in Costa Rica or anywhere in the world, may own property or goods without these being insured by a valid, lifetime identification number. (DIMEX) A passport number is not a strong ID, as it is a travel document that will change its ID number in the event of theft, renewal or expiration. Therefore, the property will be registered with an expired ID number and when it comes to transferring or initiating a process of inheritance, there could be legal complications in Costa Rica.

It is important to note that the concept of tourism is distinct from living in a particular place. Tourism generally refers to a short stay in a location for relaxation, typically during holidays. In contrast, buying, investing, living, or studying in another country are experiences that should not be conflated with the act of visiting a country as a tourist.

      2.  Are there potential constitutional challenges to this bill?

Some websites forums have published examples suggesting that when a tourist marries a local, the government cannot legally separate them. However, this idea is not a good example based on the law. It's important to note that marriage is a straight forward way to obtain citizenship and permanent residency in Costa Rica, just as it is in the US and many other countries. While many tourists from first class countries have the opportunity to regularize their status through residency, some may choose not to pursue this option, which is an important point to consider compare with Latin-American countries.

Additionally, there is concern that tourists who own businesses and restaurants may be affected by restrictions on entry into the country. However, it is essential to emphasize that all foreigners in Costa Rica must have a work permit to operate legally, and this is tied to the process of obtaining permanent residency. Therefore, the notion of working irregularly is not a strong argument, as it suggests that it is wrong for the Costa Rican government to take action to address challenges within the system.

Ultimately, the authority to determine who can remain in the country lies with the Costa Rican immigration authorities. It is also crucial to understand that visa or residence applications are not absolute civil rights; rather, they are requests made by tourists. The law clearly states that these applications must follow specific procedures and cannot simply be demanded.

    3.   How might real estate markets be affected if this bill passes?

It is essential to clarify that there should be no legal uncertainty regarding property purchases in Costa Rica, as the DIMEX provides legal security and rights over your assets in the country.

Typically, individuals who invest over $150,000 in Costa Rica are proactive in ensuring that their assets are well protected. This enables them to pass their investments on to family members through inheritance or to transfer ownership to third parties as part of a business venture.

Recent legislation aims to establish a formalized process for foreigners residing in Costa Rica as perpetual tourists, particularly those who may not be registered in the social security system. This development will not adversely affect the real estate market; in fact, investors often prioritize the strength of the legal framework in the country to safeguard their investments. As a result, individuals who purchase a property valued at $150,000 in their own name—not through an LLC—can apply for legal residence as investors, along with their families. This process offers peace of mind by ensuring that their assets are protected under a DIMEX number, which serves as a lifetime identification in Costa Rica.  Many people mistakenly create an LLC to buy property due to inadequate advice from real estate agents who may lack knowledge of immigration law and the benefits of investing in the country.

We strongly encourage potential buyers to consult an expert immigration lawyer to develop a well-thought-out relocation strategy before making any property purchases. Owning property under an LLC does not provide significant benefits; instead, it may incur additional expenses and taxes if the intention is to live in the property.

We sincerely hope these tips can help you.

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