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Digital Nomads, The New Regulation

Well, the Immigration Department has completed the regulations for the digital nomad visa. The President has signed it, and it must be published in the official Paper La Gaceta. In the meantime, these are details. What is

Well, the Immigration Department has completed the regulations for the digital nomad visa. The President has signed it, and it must be published in the official Paper La Gaceta.

In the meantime, these are details.

What is it?

The category of the Digital Nomad is a Stay, it is not a residency and it is not a path to residency. This means that a person who obtains this category cannot later change category to Temporary Residency or Permanent Residency. Contrary to Temporary Residency which can be changed to permanent after three years, this category does not allow that option.

We can describe the options to remain in Costa Rica in five groups. To wit:

  1. These are temporary permits for people to arrive to the country for a short period of time not exceeding 90 days. These are not renewable. This is given to visitors.
  2. These are extended stays which are valid for one year and renewable for one additional year. There are multiple options for people who need: medical treatment, reporters of foreign media outlets, foreign employees representing a foreign company, etc.
  3. Temporary Residency. This is an option for people to stay in Costa Rica long term.
  4. Permanent Residency. This is an option for people to stay in Costa Rica indefinitely without having to comply with special requirements such as the ones established for temporary residents and stay holders.
  5. Refugee Status and Asylum. This is granted to people who are fleeing their countries for political reasons. FYI if you are Canadian and do not like Trudeau, or American (“unitedstatian”, just joking) and do not like Biden, you do not qualify for this. Seriously, you don’t.

Thus, the Stay is a lesser option than temporary residency. It is important to understand that it is designed for people who are planning to stay in Costa Rica short term (one to two years). If you are planning on staying in Costa Rica for a long term, then you should explore other options. Click here to learn more.

Who can apply?

According to Section 4 of the regulation:

The Stay for Digital Nomad is applicable to people who:

  • Work as Self-employed; or
  • Work as employee of a company abroad; and
  • Receives an income of at least $3,000 USD per month from the services provided abroad. The income requirement increases to $4,000 USD per month if the main applicant will also be applying for spouse and/or children.

Subsections a and b, quite frankly, are completely irrelevant as the main requirement is to demonstrate the income of $3,000 USD (or $4,000 USD for a family). With this, it is not necessary to demonstrate the type of employment the person has, the important element is to demonstrate the income.

What are the requirements? How do I demonstrate the income?

According to Section 5 of the regulation, the requirements are as follows:

  • a. Application Form, signed by the applicant or proxy.
  • b. Application Fee of $100 USD.
  • c. Image (photo) of the Bio Page of the passport and the page with the last entry stamp.
  • d. Consular visa for countries in the corresponding groups requiring consular visa. Please click here to learn more about which countries require a consular visa to Costa Rica.
  • e. Twelve bank statements with an affidavit stating that the bank statements have been obtained by an accredited financial institution. The account statements must demonstrate the minimum amount of money required as income, as noted $3,000 USD for one person only or $4,000 for a couple or a family.

What documents are required for the family?

Section 6 of the regulation establishes the possibility to also obtain the Stay for spouse, common law partner, children and parents as well. The requirements for the rest of the family as follows:

  • a. Marriage certificate with no more than six months of issuance from the date the application is filed.
  • b. Document establishing the common law marriage (in the case the couple is not married), which must be issued by an official agency.
  • c. Birth certificate for people under 25 years of age. This is applicable only to children of the main applicant.
  • d. If the dependent person has a disability, it is required to produce a medical certificate establishing the health condition.
  • e. Senior citizens must produce a document demonstrating the relationship with the main applicant.

Are there tax benefits?

The law, which preceded the regulation created two exemptions. Namely:

  1. Exemption from income tax. Considering that income must be generated abroad, the applicant is exempt from paying income taxes in Costa Rica for income generated abroad.
  2. Exemption from importation tax. People under this category are exempted from paying taxes for bringing into the country any equipment required for their job, which includes:
    1. A personal computer or laptop.
    2. Cell Phone.
    3. Tablet.
    4. Photographic camera.
    5. Recording equipment and related accessories.

Are there any additional requirements?

Upon approval of the Stay, the applicant must pay the following fees:

  1. $130 USD for the ID. There is little clarity on the language and description of the fees to establish the total amount. However, it should be similar to that of residencies and other stays, which is a total of $128 USD. We will see.
  2. Medical insurance. Unlike residencies, the people who apply for a stay are exempt from paying CAJA (Social Security) but are required to pay private medical insurance for a coverage of $50,000 USD.This is a curse and a blessing. While it is great from the perspective of savings, this becomes an issue when people require critical care in the case of an accident or severe medical condition. We will elaborate below in the About Medical Insurance.

Final considerations.

The regulation is very laxed, which is great, but it generates other issues to consider.

I am in for allowing people to move from one place to another, but I also suggest consistency in the policies and considerations taken into account.

About Medical Insurance.

Recently, the CCSS (Social Security in Costa Rica) started charging foreign nationals with residency additional fees which basically doubled. While we are currently battling this in two different processes, my bottom line is this: if they are not going to request CCSS to digital nomads, then they should not request it from residents. I think a resident that is more invested in the country should receive greater benefits than a transient person. Either the government should decide to exempt all residents from paying CAJA, or apply all of the same fees to the digital nomads.

However, my main concern is that if digital nomads are not required to pay CAJA, the issue will be for them later in the event they require medical attention. Private hospitals are not equipped to deal with all medical emergencies, and thus, people may end up in a CAJA hospital. The fees will still be very high, and it would be a good idea to get covered. You know what they say about insurance: you hope you never need it, but you wish you had it when you need it.

About Background Checks and Foreign Documents.

All other stays require the foreign person to produce a background check if they apply for stay longer than six months. This category does not require that. I am ok with that decision, but then they should make it extensive to the other categories. Considering that people have the ability to stay in the country for up to two years (the same term as a temporary residency) it is discriminatory that the government will require a background check for a resident but not for a digital nomad. I would prefer if they extend this exemption to the other stays and the other residencies.

Similarly with other documents, they are either not required or does not require an apostille. It will be lovely if the same guidelines will be applicable to other categories of stays or residencies. I will prefer if people are not required to produce a birth certificate or a background check, it will make things a lot easier. Thus, they must be consistent by either implementing the same requirements for all or to remove them for all.

Important note to the public. I own a documents company, and I make money obtaining documents for people, but I rather live in a system where these documents are not required and then it will be easier for people to move to other places.

I hope this information to be helpful. Please feel free to reach us with comments in our Facebook group. 

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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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8 COMMENTS
  • Guy A Molinari July 5, 2022

    Can i apply for temporary residency while in CR on a digital nomad visa? Or am I excluded?

  • Gérard July 6, 2022

    Do we know if the the bank statements, affidavit and mariage certificate need to be translated into Spanish?

  • J. Armstrong July 6, 2022

    What are the Drivers License rules for Digital Nomads?

  • Beth Kellan July 9, 2022

    Is there any way to actually apply just yet? I have looked and isn’t see anywhere to do so. It may be so new it’s just not ready yet?

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