Establishing residency in Panama or Costa Rica could offer many advantages for international entrepreneurs. But selecting a country that meets personal needs and understanding the regulation surrounding the residency process can be a challenge. Applicants need to know the facts. “I would encourage all entrepreneurs to consider moving to these countries but it depends whether they want to stay for two years or establish residency. Many considerations shape that decision,” said Arin Sime, the US-based CEO of webRTC.ventures, a software company focusing on building live video applications.
Application Process, Costs and Requirements
In Costa Rica, guidance through the application process is helpful. That means hiring an attorney, and that can cost between $600 and $2,000 per person. To establish residency in Costa Rica through the ‘Rentista’ category requires proof of $2,500 per month income for at least two years, guaranteed by a banking institution or a $60,000 deposit to an approved Costa Rican bank.
As part of the application, you will be required to present a background check conducted in the country of origin, your birth certificate, a marriage certificate if you are also looking for residency for your spouse and an income certificate. Most of these documents need to be notarized by a local public notary and then apostilled. Document translations to Spanish can only be performed by Costa Rican Consulates or in Costa Rica by an official translator.
Immigration offices are crowded, with long wait times and challenging bureaucracy. “In Costa Rica, we had some logistical problems with the residency process. For a family of four, we had issues with the way their financial requirements were setup,” said Sime. The process can be long, with typical approval times ranging from nine months to a year. You will become a temporary resident initially and after three years you can apply for permanent status.
Successful applicants can keep their residency status for life without having to reapply as long as they pay a visit every two years
In comparison, Panama has a relatively easy process when it comes to becoming a resident. However, applicants will need to visit the country at least twice to complete the application: first to apply and open a bank account, which can take 2-3 weeks to get approved, and again to complete the immigration paperwork with your attorney and the Immigration Department.
You’ll need bank, commercial and personal references, a copy of a utility bill to prove your physical address, a passport copy, a copy of secondary identification, an annual tax declaration and a background check conducted in your country of origin.
This process, from the moment you complete the first paperwork to receiving your residency card, has an average time frame of 4-6 months. Once you have received your residency, you need only visit the country for one day every two years to maintain it.
“I lived in Costa Rica with my family six years ago but decided to move to Panama instead. I found Panama to be more business friendly and the residency process was easier,” Sime explained.
Benefits of Residency
In Panama, the Friendly Nations Visa allows people from 50 countries, including the US, to fast-track residency visas for business reasons, by opening a business or making an investment and depositing US$5000 plus US$2000 for each dependent in a Panamanian bank. . No minimum income requirement exists under this visa and it’s not necessary to relocate to Panama after establishing residency. Successful applicants can keep their residency status for life without having to reapply as long as they pay a visit every two years. As a Panama permanent resident, you’ll have the option to access Panamanian citizenship after just five years. Panama also offers generous discounts on transportation, entertainment, hospital and energy bills for all resident women over the age of 55 and men over the age of 60.
Costa Rica’s capital city, San Jose, is home to more than 800 tech companies
Permanent residency in Costa Rica gives you access to the national healthcare system and benefits such as discounts on transportation, national parks and local attractions. The Costa Rican government does not tax residents’ foreign income. After seven years of residency, you can apply to become a Costa Rican citizen.
Panama is known throughout Latin America for its robust healthcare system. Public hospitals and private clinics have highly-qualified bilingual medical staff and professionals. The Panamanian government offers access to its universal healthcare system to all permanent residents. You can also access private international medical insurance plans, which are available to expats living in Panama and are generally much less expensive than insurance in the US. Medications that may require a prescription in other countries are generally available over-the-counter in Panama.
In Costa Rica, it is mandatory to enroll in the Social Security Administration once your residency is approved. Although national health care exists it may not provide a sufficient safety net and is hampered by long waiting times for medical procedures. In addition to its public system, Costa Rica has private healthcare that is much more affordable than private care in the US. Private health insurance acts as a supplement to public healthcare, providing access to an even higher standard of quality medical care. The public system dispenses generic medicines for free; no prescriptions are necessary for most medications.
Opportunities for Entrepreneurs
Big business is booming in Costa Rica, with corporations such as Amazon, Intel, Hewlett-Packard and Sony setting up shop. Costa Rica’s capital city, San Jose, is home to more than 800 tech companies and Guanacaste, a northwestern province, is an emerging regional hub attracting international tech companies. Current legislation in Costa Rica allows employers to pay workers with cryptocurrency, making it one of the most crypto-friendly places in the region. Costa Rica also grants residency visas under the category of ‘Inversionistas’ to foreign nationals who have made an investment. The required investment is US$200,000 in an active business, real estate, stocks or securities.
In Panama there is growing tech innovation best exemplified by the City of Knowledge, a special economic zone aiming to develop creativity and innovation. Projects like this offer opportunity for people to secure work permits in the country. The City of Knowledge companies can apply for up to five special work permits for foreign workers, valid for six years. Panama also offers an Investor Visa and a Professional Employment Visa which facilitates the residency of foreigners working for a Panama company. Incubators such as Kalu Yala, Entrepreneurs’ organizations and the Founder Institute operate in Panama and government programs such as Smart Nation and Panama 4.0 digital Agenda promote entrepreneurship in the country. “Panama combines the tourism and biodiversity of Central America with the benefits of a big city. It’s also a major travel hub, so you can easily connect with other places in the area,” Sime concluded.