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And the rentiers?
[/vc_column_text][us_separator][vc_column_text] For years, foreigners who came to Costa Rica to apply for temporary residency mostly opted for the category ofrentier, as it is the most friendly to the profile of foreigners visiting us. The application requirements were relatively simple and achievable. The essential condition for eligibility as a rentier resident consisted—I'll explain why I use the past tense soon—of demonstrating to the General Directorate of Immigration and Foreign Affairs (hereinafter "DGME") that the interested party could earn a monthly income of $2,500 for a minimum period of two years, as long as the income did not come from a salary or payroll. In practice, applicants opened an account in Costa Rica or abroad in which they deposited $60,000 or more, and their financial institution issued a letter guaranteeing disbursement of the monthly amount ($2,500) for a period of two years. That was it. Why make it more complicated? Logic would suggest that anyone who has more than $60,000 in a bank account, who can prove a monthly income of one million six hundred thousand colones, who has no criminal record, and whose personal information is recorded in an administrative file, should be able to live in a country that is in such need of economic recovery. Unfortunately, a recent interpretation of the concept of "income" by attorneys Cheily Flores and Diana Alfaro in Official Letter GE-SVT-079-03-2021 of the DGME, following a query made by former congresswoman María Inés Solís, completely eliminated this possibility and considerably increased the difficulty of applying in this subcategory. The DGME established that income meansan increase in capital, profit or an increase in wealth and not a return or management of an amount of $60,000That is, the $2,500 monthly income must come from an investment fund, from current profits or interest. In addition, the letter issued by the financial authority ensuring the income must indicate that the applicant will receive this amount for a period ofnot less than two years.This is a requirement that most banks in the United States and the European Union refuse to comply with, as they cannot attest to the future income their clients will receive, taking into account the myriad of scenarios that could interfere with such compliance. What if the investment collapses? Bankruptcy, insolvency, theft, fraud, or scam? How can a financial institution guarantee future interest income? For example, to generate $2,500 in interest in the United States, an initial investment of approximately $430,000 is required at a 7% annual interest rate. If it's a money market fund, an investment of $1,200,000 with an interest rate of 2.5% would be required to generate $2,500 in current interest. How many people can afford to invest $1.5 million and live off the interest? The rentier subcategory has become exclusive to the foreign elite. This has led to hundreds of applications for residency as an annuitant being rejected in the last year. The DGME is inflexible regarding proof of income and the choice of words used by banks. If the letter doesn't specifically state that the person will receive astable and permanent income of no less than the sum of $2,500 for a period of no less than two years,The request will be rejected. The DGME is one of the institutions most in need of structural reform due to its minimal willingness to work in the interests of users, its deficient and ineffective service, and its violation of even the most basic human rights. It is time for citizens to begin demanding accountability from the Public Administration, and from institutions that lack updating and optimization due to their lack of vision and foresight. [/vc_column_text][us_separator][vc_column_text]Written by: Sofia Paniagua [/vc_column_text][/vc_column][/vc_row]
