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Digital Nomads

On December 13th, Daniel Yepez from the Costa Rica News  published a story titled "Costa Rica Opens Its Arms To International Digital Nomads With New “Remote Workers Visa” Law".  This time we just want to

On December 13th, Daniel Yepez from the Costa Rica News  published a story titled “Costa Rica Opens Its Arms To International Digital Nomads With New “Remote Workers Visa” Law”This time we just want to clarify that this is not a law yet. It is only a bill in the CR Congress.

The article seems to promote a business called Resonance that deals with digital nomads. I understand that if the law passes Resonance will benefit from this, but first, the law needs to be approved. So hold your horses.  We have received may requests to file for this category. It turns out that we have to invest a lot of time getting the record straight and explain to people that this category is not available quite yet.

The Content of the Bill

The proposal contains these main elements:

  1. It is a estancia (a subcategory between tourist visa and residency). This is not a residency. What this means is that this is not path to permanent residency or citizenship.
  2. It is valid for one year and it can be renewed for one additional year only.
  3. Creates a category for remote workers (whether in payroll or self employed)
  4. Unlike the general estancias, this category will allow to obtain the status for spouse and dependent children under 25 years of age, or over 25 with disabilities.
  5. People need to demonstrate a monthly income of $3,000 USD for the principal, or $4,000 for a family group.
  6. There will be tax exemptions. People under this category do not need to pay income tax in Costa Rica. In addition, they will be able to import some personal items exempt from importation taxes.
  7. Insurance. People under this category will not have to pay into CAJA, but they will be required to get private insurance.
  8. There is no minimum amount of time required to remain in the country.
  9. Driver’s license. People under this category will be able to obtain a driver’s license from Costa Rica.

The Process of the Bill

Currently, the bill has passed the first approval. What does this mean? Unlike many other countries, Costa Rica does not have a bicameral congress (House of Representatives and Senate), it is a poor country, we can only afford one set of bureaucrats. This means that instead of having a bill reviewed by two chambers, the one and only chamber reviews the bill twice. I know it is a waste of time, but we need to let them stand in their ivory towers.

Anyhow, the bill made it through the first round of votes and was sent back to the Committee for Tourism Affairs (I kid you not, there is such a thing). The committee reviewed the bill and approved it and sent it back to the floor for the second round of votes. Congress is currently reviewing the bill and sending back to the Committee for corrections or opinions. The bill has 137 motions by the legislators. These motions are either inquiries the legislators have or corrections they want made, then the committee reviews them and sends the final bill to the floor for a vote. Unlike many other bills, this one is processing fast. My guess is that there is interest in getting the approval done. We will see.

My Two Cents

Well, on the one hand, I believe this bill to be completely unnecessary. These modifications can be done on administrative level, instead of a congressional level. This means that CR President Alvarado along with the Immigration Department can issue an executive order to modify the current regulations (not laws, laws and regulations are different, look it up) related to estancias. The various categories of estancias are established by regulation issued by the Immigration Department. If they have the actual intent of making this change, or if they knew what they were doing (both the Immigration Department and the President) they would just add another section to the estancias for digital nomads.

Furthermore, the bill seems very vague. There are plenty of questions that I have and we will have to wait and see the regulations. For instance, how are people going to demonstrate the income? The bill says that people can provide bank statements or other documents. The situation is getting an apostille for the bank statements or a legalization for people coming from Canada. Why don’t they just request tax returns.

Why are they not allowed to be registered in CAJA. We know if people get into a bad accident, there is so much a private hospital can do, at the end of the day many people end up in a CAJA Hospital.

Why do they require $3,000 for an individual and $4,000 for a family group to get a category that is less than a residency? Might as well get residency.

Lastly, I want to warn people that if and when this bill is passed, the Immigration Department must issue the corresponding regulation to handle this new types of cases. It can take several months for this to happen.

 

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rvalverde@outlierlegal.com

Attorney and Entrepreneur with more than 15 years experience in: immigration law in the US and Latin American countries including Argentina, Chile, Colombia, Brazil, Costa Rica and Panama. In addition, Rafael has extensive experience in Business Law, Estate Planning, and Real Estate. Lastly, Rafael has developed experience in people management, talent development and business development.

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