Costa Rica’s Illegal Underground gringo Economy

For a variety of reasons I think that it is imperative that anyone thinking of retiring in Costa Rica should be aware of the following situation.

As I have stated in numerous articles, the best candidates for living or retiring successfully in Costa Rica are those with a pension, another type of fixed income or who are independently wealthy. Why? Because if you move here and have to make a living or go into business you will face an uphill battle. About one in ten Americans who relocates here to start a business finds success.

Those who do venture into the business world most often get involved in real estate, tourism, journalism, the relocation or shipping business, or retirement-related activities. Every since the world-wide crash in 2008 it has been extremely difficult to earn a living by selling real estate to foreigners. The latter are still shell shocked by the economic meltdown and reluctant to buy anything. Only a few of the realtors I know are able to make a decent living nowadays. Furthermore, the tourism and retirement markets are saturated.

Nevertheless, a number of young foreigners who do not have pensions or a steady sources of income still try to eek out a living. Most find it impossible, become discouraged and return home, unable to make their dream of living here come true. On top of that, very few of these young people are ever able to obtain a work permit.

licencias para conducir

The downside of this situation is that you find a large number of these young people working illegally in the country’s underground economy in order to survive. They do it without paying taxes to the Costa Rican or U.S. governments and by using Paypal and other alternative on-line methods of moving money. This is because those who fall into this category are working without Costa Rican residency, unable to open bank accounts or get permission to work legally.

This group of illegal aliens is able to survive because of the Costa Rican government’s lax enforcement policy. The authorities have their hands full with their own problems and rarely have the time to prosecute said individuals. However, if someone does get caught working illegally, he or she can be deported for a minimum of 10 years.

Furthermore, a few of the people who make up this group cannot return to their home country because of legal problems and are fugitives who are on the lamb. Believe me, I have met a lot of these types during the 36 years that I have lived here.

It is advisable to be very careful when doing business or dealing with people who fit this profile. Most are desperate to make a living and will not stop at anything to cheat you out of your hard earned money by lying in order to make a few bucks.

Don’t get me wrong! Not every young foreign entrepreneur is dishonest. But it doesn’t hurt to be overly cautious. Google anyone English-speaking foreigner and ask a lot of questions. Be careful since foreigners have been known to use an alias to cover their past. Costa Rica is a small country and the word spreads fast. If a foreigner has done something bad or illegal, other expats will usually know about.

What I have written is based on 36 years of dealing with people from all walks of life in Costa Rica. I always advise the clients on my monthly relocation/retirement tours to be more careful of English speakers than those who speak Spanish…even if the former are legal residents.

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