The illegal underground Gringo economy in Costa Rica Part II

In my last blog I wrote about Americans and Canadians who work under the table in Costa Rica without legal residency or a work permit. In this article I want to address another group who have legal residency but without permission to work.

A foreigner can only work with residency called “Residencia Libre de Condiciones” or with a temporary work permit. Those who work at private schools or for certain companies, for example, can obtain work permit provided they comply with specific requirements and do the paperwork. This type of residency is not permanent and may be renewed depending on one’s particular situation.

Residencia Libre de Condiciones is another story. It basically gives foreigners permission to engage in any type of work legally. However, not everyone qualifies for this category.

Costa Rica residence types
Costa Rica residence types

This doesn’t stop many foreigners who are retired or without permission to work to do so anyway. As I mentioned in my last article, immigration enforcement is very lax in Costa Rica. The government just doesn’t have the manpower to tackle this problem. There is a special unit called The Immigration Police whose job is to round up those who are working illegally. Usually somebody has to blow the whistle on a worker for the police to act. Unfortunately, some of the guilty parties bribe the police to turn a blind eye and continue to break the law by working.

This is truly a sad situation for those of us with permission to work legally, pay our Costa Rican taxes, meet our U.S. tax responsibility and follow the country’s strict banking laws.

I know of one gentleman who ran a tour business while he was a pensionado (retiree without permission to work), cagado de risa (carefree) as we say here. Not only did the guy have a travel business but he sold real estate to his clients without paying taxes. I also know of a couple who live in the Central Valley who conducted several types businesses when they were temporary residents. Fortunately, in both cases the people involved provided good services and proved to be honest, but were breaking the country’s laws only because they could get away with it.

Would you buy property in the U.S. or Canada from someone who did not have permission to work and/or was violating the country’s immigration laws? These people would never be so bold as to try what they do here if they were still living in North America. They only do what they do because they know that they can get away with it here.

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