Condición Restringida, What does it mean on your DIMEX card?

People often ask what it means to have Condición Restringida on your DIMEX card. It basically means that you cannot work. On the other hand, Libre Condición means that you can work.

Under Section 2 of the Immigration Regulation, Condición Restringida is a limitation set forth by the Immigration Department which does not allow people with certain categories of residency to engage in certain economic activities.

The goal of the restriction is to prevent foreign nationals from working in Costa Rica. There are a significant number of restricted categories, but for our purposes we are going to mention only three: the Rentista Category, the Pensionado Category, and the Investor Category.  With these three categories, the Costa Rican government intended to allow foreign nationals to relocate to Costa Rica and to invest and/or spend their money in Costa Rica. It was not the intention of the government to allow people in these three categories to become part of the work force. The primary concern was whether people in these three categories will take a job away from a Tico.

Foreign nationals in these three categories (particularly the investor and the rentista) generally wonder whether they can work or not. It is important to clarify the restricted nature of these categories and what it means to be “employed”.

To Work or not to Work

Under the definition of Condición Restringida, we need to interpret work and employment from the perspective of an employee. In a nutshell, you can be self-employed, but you cannot be employed by a third party.  You cannot be put on payroll. If the purpose of the restriction is to prevent foreign nationals from taking a job from a Tico, then you should not go out there looking for a job, but you can create your own job.

On the other hand, if you are one of these categories and you find a job, or you get offered a job, it does not mean that you cannot take that job, you just need to change your immigration category to an employment based residency.

Therefore, if you are self-employed, there is no conflict with the restricted condition of your residency. I will review the case for the investor category in a few moments, but for the other two categories, most of the time people continue to be engaged in some economic activity, such as: writing, consulting, arts, website design and development, travel, hospitality, trading, retail, so on and so forth.

Work is a human right; thus, no government can prohibit people from working. I can understand if the CR government want to protect Tico’s jobs, but it cannot prohibit people from engaging in any economic activity at all. However, there is a distinction to be made for people in certain businesses, such as a restaurant. You can own and manage a restaurant, but you cannot wait tables. These are the types of jobs the CR Government is trying to protect. Therefore, if you have a shop, restaurant or hotel, you can own it and manage it, but you cannot put yourself on payroll and perform the hands-on work.

If you are a website developer, a writer or a consultant, there is no conflict with the restriction. The important element here is not to put yourself in a payroll, not to receive a salary, not be employed by someone.

The Investor Category

Whether you can work is a recurring question for people under the investor category who have invested in a business. A significant number of people come to Costa Rica a purchase or develop a hotel or a restaurant. As you may know, it possible to obtain residency under such circumstances provided that you invest at least $200,000 in that venture.

This category is a restricted category. While the law allows you to obtain residency if you meet these requirements, it does not allow you to “work” in your own business. What this means is that you cannot take a salary and you cannot do certain jobs in the business. How do you make money if you cannot pay yourself a salary? Well, you are supposed to have a legal structure for that business such as a corporation or a limited liability company. Therefore, while under immigration law you are not allowed to have a salary, under business law you are allowed to get paid dividends. Regarding the type of work that you can do, you are allowed to only manage the place. You cannot be running the whole place. If we use the example of the restaurant,  you can only manage the place but you cannot work in the kitchen, or wait tables or swipe the floors, etc.

This particular category was created with the intention to bring investors to Costa Rica to create jobs, if you are mopping the floors, then it defeats the purpose.

The Self-Employed Category

There are two self-employed categories that allows foreign nationals to work in their own business. On the one hand, there is a residency for “Skilled Self Employed people” which is designed for people who either have a degree from some sort of school (college or vocational) or who have extensive experience in their field; and on the other hand, there is the “Special Category for Self-Employed people with a Registered Business”, which is for people who are not skilled but a have a formal business such as shop, restaurant, etc.

Unlike the investor category which requires a minimum investment of $200,000 USD, neither of these categories require a minimum amount of money to be invested in the business. Therefore, regardless of the amount of money that you invested to open the business, you will be able to obtain either of these two categories if you meet the requirements.

A good example for people who can qualify for either of these categories are yoga instructors, who may be or may be not certified. Some yoga instructors go to India to get a certification. If you are one of those, you can obtain a temporary residency under the “Self-Employed Skilled” category”. If you did not go to India, but you have been doing yoga for many years and are highly skilled to the point that you can be yoga instructor (you need a good résumé) and you have your own studio with the corresponding permits (health permit and business license from the county) then you can qualify for the “Special Category for Self-Employed people with a Registered Business”.

Either of these two categories are applicable to a significant number of occupations such as: restauranteurs, photographers, website developers, programmers, graphic designers, writers, decorators, tour guides, consulting, coaching, instructors, real estate agents. These types of jobs would allow you to obtain residency if you have a certification, otherwise, you can obtain the special category if you have a registered business.

For people who require licensing such as: engineers, attorneys, accountants, physicians, architects, veterinarians, psychologists, economists, teachers, so on and so forth, it is required to get the licensing in order to obtain the temporary residency. Most of the time, there is a catch 22 as the licensing is available for people who have residency, but it is possible to obtain residency only of you have the licensing. It is very challenging to obtain residency with these type of professions as it is required to validate the foreign diploma in Costa Rica which can be very onerous. Unfortunately, the special category for the registered business is not available for professions that require licensing due to the very nature of the licensing requirement.

Additional Considerations

People who have residency under the marriage category or who obtained residency through employment with a company in Costa Rica, may find that their DIMEX will also say Condición Restringida. This restriction is not for employment purposes. In the case of people who obtained residency through marriage, it means that the residency is contingent of the marriage. If the person gets separated or divorced, it will not be possible to renew the residency. For people who have obtained residency through employment, the restriction means that you cannot work for another company. The residency is attached to the company that sponsored the residency in the first place. If you lose your job, you lose the residency.

Any of the restrictions, whether it is for pensionado, rentista, investor, marriage or employment categories, will disappear once the person becomes a permanent resident, and anyone in these categories can become a permanent resident after three years.

So, can you work in Costa Rica? Sure you can, but as we discussed, there a number of elements that you need to take into consideration to be able to work.

I hope this information to be helpful, please feel free to send us your questions or comments.