Many of you when you engage a professional to manage your property or otherwise perform services for you, you assume that they are legal to work in Costa Rica. But, the truth is that many providers are not legal and do not operate as such. You must be careful when using these kinds of providers.

You may ask – why is this a big deal? In the countries where you reside, a hot and timely topic of political conversation is migration – legal and undocumented/illegal. No matter what your position is in your home country, in Costa Rica, there are stricter rules on who is allowed to work or not. Using persons not legal to work can create significant problems for your business or investments.

Here are some tips to see if your provider is legal:

• Do they have a cedula juridica? This is the national ID card that allows a person to live in Costa Rica – Costa Rican citizen will have this as well as residents. There are two kinds of residents – permanent and temporary. From a work standpoint, only permanent residents generally have the right to work. So when hiring somebody or a company, be sure to ask to see a copy of their cedula. If it is a resident ID, it should be permanent and/or marked “libre condicion.” Most temporary residents cannot work legally.
• Are they registered as taxpayers? In Costa Rica, you must register to be a taxpayer – it is not automatic. A person who is allowed to work is either an employee or independent contractor. If the person you are dealing with is the owner or a contractor, they most likely are not an employee of their businesses. As such, they must be registered as a tax payer in Costa Rica. To find out if somebody is registered as a tax payer, ask them to show you proof. Information is also available for free at www.hacienda.go.cr/ATV/frmConsultaSituTributaria.aspx.
• Are they registered in CCSS? In Costa Rica, all legal residents must pay into the CCSS or national health insurance. If they are an employee or an independent contractor, they will have an identification number that links them to the CCSS system. Ask them if they are current and can provide documentation of registration.
• Can they perform SINPE? SINPE are bank transfers between banks in Costa Rica. In order for a person to be able to make bank to bank transfers, they must have a DIMEX number or cedula. If they cannot receive or pay funds via bank transfers between banks in Costa Rica, such as BCR to BNCR, then they may not be legal to work in Costa Rica.

If people you are dealing with cannot provide these items, then there is a high likelihood that they are working illegally in Costa Rica. People may claim they have an application in to migration and are ok to work, but that is not accurate. In order for them to work legally, their application for residency must be approved. The migration application allows people to stay in Costa Rica for a period longer than 90 days, BUT not to work.

The migration department is getting tougher with weeding illegals out of the country. As they interface with the banking, national registry and tax systems of the country, they are able to fund and prosecute illegals – these people can be deported without a due process hearing as you might be accustomed in other countries.

Why is this important to you? If you are a property owner who has a property manager responsible for your property, then it is very relevant. For example, if your property manager was not legally allowed to work and was on your bank account and the migration department arrested them, what would you do? These kinds of people would be deported and not allowed to return to Costa Rica for many years. What happens to your property? What happens to your monies in bank accounts that they control or manage?

The moral of the story is to make sure the key people providing services to you are legal and ask about their status and require proof. Do not work with people who are not legal in Costa Rica. For those who really believe in pura vida, this should be an obvious way to carry out your business affairs. If you would not tolerate it in your home country, then you should not in Costa Rica either.

This article carries no official authority, and its contents should not be acted upon without professional advice. For more information about this topic, please contact our office.