In an effort to cater to foreign investors and businesses, President Laura Chinchilla signed a new policy this week that will grant 2-year temporary residencies to foreign executives and employees in Costa Rica. Certain foreign companies operating in free-trade zones and the tourism, export, import and business sectors will now have an easier time at the Costa Rican immigration office.
The laborious process of obtaining a visa in Costa Rica will soon become easier, thanks to a new regulation signed by President Chinchilla on Tuesday.
The new “Foreign Business Registration Policy” will expedite the visa process for foreign business executives and employees working and investing in Costa Rica. The policy change will grant two-year temporary residencies to foreign executives, managers and technical personnel employed in free-trade zones or by the tourism, telecommunications, airlines, and import and export sectors.
A representative of the Foreign Trade Ministry (COMEX), told The Tico Times on Wednesday that this policy doesn t apply to individuals unless they are employed by foreign businesses or operations that fit the criteria outlined by the government agencies. The representative said that the businesses must match a certain profile to qualify for the policy (see box below).
For operations and businesses that are currently operating in Costa Rica and fit the criteria outlined by the new policy, the COMEX representative said that they must contact the Immigration Office to begin the process to obtain a two-year temporary residency. The representative said the Immigration Office will also be working with the foreign parent companies of Costa Rican branches to provide temporary residencies for some of their employees.
“An adequate migratory policy, approached in the correct way, has the potential to be converted into a vital element that allows us to elevate competitiveness,” said Foreign Trade Minister Anabel González. “This will help us climb the value chain regarding manufacturing and services that are offered in Costa Rica, accelerate the transfer of knowledge in key areas, and bring us closer to the goal of development what we are trying to reach.”
According to COMEX, the policy was announced in late January, though several government agencies have revised it in the past three months. The Immigration Office will also allow foreign companies to complete some of the paperwork necessary for temporary residencies online.
“The decision to invest in a place is strongly tied to the characteristics offered by the destination country,” said Public Security Minister Mario Zamora, who formerly headed the Immigration Ministry. “Investors want to be able to supervise the progress of their business venture, and that requires extended time in the country to do so. By granting a temporary residency, this policy will assist foreign investors in the development of their businesses.”
Obtaining a visa or residency in Costa Rica has traditionally been a lengthy process laden with excessive paperwork and bureaucracy. Many foreigners, including investors and business personnel, are unable to obtain Costa Rica residency despite having lived in the country for years. Foreigners that do not have Costa Rican residency must leave the country every 90 days to renew their visas. If they do not, they can be fined for failing to do so.
According to the Costa Rican Immigration Office, an estimated 600,000 foreigners live in the country.
The Push for Foreign Investment
Chinchilla’s decision to sign the new policy comes only days before she heads to the U.S. to promote foreign investment in Costa Rica. On Saturday, Chinchilla will travel to the U.S. for six days to continue to encourage multinational companies to invest in the country. The Costa Rican Investment Promotion Agency (CINDE) reports that there are 200 multinational companies in Costa Rica.
During her first three days in the U.S., Chinchilla will visit San Francisco, California, the Lawrence Berkeley National Laboratory at the University of California at Berkeley, and the Stanford University Business School, in Palo Alto. The purpose of the visit to the Berkeley National Laboratory is to promote cooperation in the development of clean energy technologies, which Chinchilla has outlined as a priority for her administration.
On Wednesday, Chinchilla will head east to Washington, D.C., where she will participate in a forum at the U.S. Chamber of Commerce.
She will also give a commencement speech at Georgetown University, her alma mater, and additional speeches at the American Enterprise Institute and the Brookings Institute.
“I want to put into the mind of investors and the international community that Costa Rica is a better destination for its operations,” Chinchilla said. “I am looking to promote that we have a series of competitive advantages and that we are currently the top exporter of high technology and second largest exporter of software in Latin America. We also have an excellent geographic location, human capital and political stability that makes us an ideal location for foreign direct investment.”
COMEX estimates that in 2010, foreign direct investment raked in more than $1.45 billion, which accounted for more than 4.5 percent of the gross domestic product. In 2010, some 2.1 million tourists visited Costa Rica, bringing in $2 billion, or 7 percent of the GDP.
In September, Chinchilla rang the bell at the New York Stock Exchange and told the floor of stockbrokers that Costa Rica welcomed U.S. foreign investment. Chinchilla has stated that she hopes Costa Rica will bring in $9 billion of FDI during her administration.
“We do not have companies registered here in the stock market in New York but there are many U.S. companies that are working and investing in our country,” she said. “We will always have our doors open to these companies… We are working very hard to continue inviting U.S. companies to invest in our country” (TT, Sept. 21, 2010).
The newly signed visa policy will assist foreign executives, business and technical employees to obtain a temporary residency and will allow them to remain in the country for an extended period of time. The policy applies to foreign employees in the following cases:
Classification A: Export businesses operating under the Foreign Trade Minister (COMEX) or Foreign Trade Promotion Office (Procomer)
Classification B: Businesses that export goods or services or are performing research and development projects in free-trade zones.
Classification C: Businesses associated with the tourism sector, specifically in hospitality, that are classified as 4-stars and up. Also includes businesses associated with airlines that are registered in the Airlines Association (ALA), as well as airline employees.
Classification D: Businesses associated with or registered with the Superintendence of Financial Entities (SUGEF), Superintendence of Pension Funds (SUPEN), Superintendence of Securities (SUGEVAL) or Insurance Superintendence (SUGESE).
Classification E: Businesses in the process of entering or that are operating in the telecommunications market and are registered with the Telecommunications Superintendence (SUTEL).
Classification F: Multinational businesses that have created a subsidiary in Costa Rica that produces and/or sells goods and services.
Classification G: Businesses that have been contracted by a government agency or public administration for a period of more than one year.