1Visiting, Living In, or Doing Business in Costa Rica or Another Frontier Market or a Country Foreign to You.
By Anon E. Mouse
Copyright © 2011 by Anon E. Mouse
Published at Smashwords
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1Visiting, Living in, or Doing business in Costa Rica or Another Frontier Market or a Country to You.
By Anon E. Mouse
1. Introduction
A. Introduction
B. Disclaimer
C. Language
2. Laws and Legal Considerations
A. Theft
B. Following Directions
C. The Peter Principle
D. Labor Laws
E. Incorporating in Costa Rica
3. Lawyers
A. Lawyers in General
B. Lawyers and Swindlers
C. Malfeasance
D. Magic Tricks
E. Selecting a Lawyer in Costa Rica
4. The Costa Rican People in General
A. The Truth
B. The Costa Rican Political Process
C. Ethics in Costa Rica
D. The Costa Rican Work Ethic
E. Costa Rican Management
F. Costa Rican Professionals
G. Education in Costa Rica
H. Nicaraguans
I. Land and the Gringo or Tourist Price
5. Stores
A. The Shopping Experience
B. The Bait and Switch
C. Pricing Errors
D. Do the Math
E. Dumping Grounds
F. You Just Have To Accept Some Things
G. Customer Loyalty
H. Street Vendors
I. Items and Parts Availability
J. Used Items
K. The Duty Free Port
6. Dealing with Costa Ricans
A. Procrastination
B. Appointments
C. If God Wants It
D. Names
E. Getting Them to Do Their Job
F. Avoiding Possible Problems
G. Service
7. Information for Being in Frontier Markets
A. Nonpayment
B. Property Registration
C. Disappearing Bills
D. Counterfeit Bills
E. Home Security
F. Hotel Security
8. Dealing with the Costa Rican Government
A. Entering Costa Rica
B. Getting a Drivers’ License
C. Traffic in Costa Rica
D. Getting a Firearms Permit
E The Costa Rican Legal Process
F. Getting Residency, Citizenship and Passports
G. Don’t Accept Their Copout
9. Buying Real Estate in Costa Rica
A. Land That Fits Your Needs
B. Land Is a Real Estate Investment
C. Land Development Patterns
D. Best Use
E. Shopping For Land in Costa Rica
F. Land Registration in Costa Rica.
11. Introduction
A. Introduction
My experience comes from more than life and a career in the United States of America Part of it comes from the fact that my business experience in the United States included business trips to different countries. My experience also comes from living and being productive in Costa Rica for over 10 years. I have seen and heard of many things that foreigners should watch out for when in a country foreign to them. Being aware of these pitfalls can help you not fall into these traps. So the reader of this book, when in a foreign country, could save themselves both time and money while enjoying their life with fewer problems.
Some of these stories are my own first-hand experiences. Most of the rest I have heard second hand. Most of the third hand accounts I have heard through the Costa Rican TV news and newspapers. The number of stories in this book that came from other third-hand accounts is few. I believe everything presented here that shows you situations to be aware of to be from reliable sources and to be the truth.
Most of the stories presented here have their setting in Costa Rica. But Costa Rica is not the only place in the world where such things should be watched out for. Some of the things to be concerned about are also concerns in affluent countries with a developed market. However, they are more common to countries with smaller, less developed frontier markets.
Because I have been a productive person living in a country that was once foreign to me, I have learned from experience many things. The things presented here apply to living and doing business in Costa Rica. Most also apply to other frontier markets. Some even should be concerns in emerging and developed market countries. Some of the information is also valuable to tourists who are only vacationing. Knowing this information will help the traveler better enjoy their trip and have fewer problems. It will also provide the vacationer with interesting information and insights about the place they are visiting.
Those who decide to live in a country foreign to them will get a lot of valuable information from this book. This information will help them live in that country with fewer problems. Some people may only want to retire in a foreign country. Often a foreign country can provide them a higher standard of living at a lower cost. This book will provide them with a lot of valuable information.
There are those people managing in or considering investing in a frontier market. They will probably benefit the most from the information presented in this book. The global economy today has many people investing a lot of money all over the world. They are looking for diversification and a return on their investment. The information presented in this book will provide the managers of that money valuable information that can help them safeguard that investment, and help make it more productive and profitable.
I hope everyone enjoys their experiences in countries that are foreign to them. Even the smaller less-developed countries can be enjoyable. If you can avoid the possible problems, you can enjoy yourself more. Watch out, be observant, and enjoy.
B. Disclaimer
This book will present many stories that convey information. The stories are about being in and managing in small less-developed countries. Most of the stories have their setting in Costa Rica. But the occurrences that happen in these stories are not limited to Costa Rica. Such situations can happen in many other places in the world. Such situations are not even limited to frontier markets. Some situations also happen in the emerging markets and developed markets as well.
The stories and information presented here are useful in managing a business. They are also useful for managing oneself in a foreign country. Much of the information presented here would also be beneficial and of interest to tourists. Businessmen and expat retirees would be most benefited by the information presented here. The information gathered in this endeavor can also be applicable in many other places. It is also useful information for managing many different businesses. Even tourists in Costa Rica and other places in the world can learn about foreign cultures from this book. They can gain insights and learn things to watch out for while in different countries by reading this book.
A disclaimer is one of the many legal considerations of doing business anywhere. Costa Rica is not different in that respect. In its own respects, Costa Rica is a unique place with some unique interpretations of things that are often reflected in its laws. So it is good to start with a disclaimer to protect the innocent.
I am not a lawyer. I am living and managing in Costa Rica. The situations for doing my business in Costa Rica involve many of the same situations for doing any type of business in Costa Rica or in many other places in the world. Anyone doing any type of business in Costa Rica or in many other places in the world should be aware of these situations. These situations can arise while doing business in Costa Rica or many other places in the world.
What most of the world thinks is common sense, and takes for granted, should not be taken for granted in Costa Rica. Such common sense may not apply in another culture.
You should not expect things to be understood the same way in Costa Rica. Other places in the world also may understand many things differently. You probably have experienced life by living in a country with a more developed market. That experience probably gives you certain impressions. Those impressions were produced by the culture you were living in. A different culture will be a different culture. So the impressions of life you have may not apply in a different country.
One example of this could be the interpretation and implementation of the laws concerning slander. In many parts of the world slander is interpreted as only applying if the derogatory presentation of someone or something is not true. If the derogatory presentation is true in many parts of the world, it is not slander.
I am not a lawyer. Costa Rica may have a different interpretation of slander from other places. It may be interpreted that any derogatory statement about a specific person, institution, or group of people could be considered slander, whether it is true or not. It may be interpreted that any statement that could damage someone’s reputation or their ability to “earn” their income could be interpreted in a Costa Rican court of law to be slander. Also in other places in the world some things may be considered slander whether true or not. Then the person who presented the statement true or not could be held accountable to pay the defamed damages. Considering that possibility for Costa Rica and other places in the world I state in this disclaimer the following.
This book will present no derogatory statements about any specific people, institutions, or groups of people that could constitute slander. The statements here are descriptions of how things are. They are not inferior presentations of what exists. If someone thinks a statement is defaming it is because the art of presenting the image of an object produces the image seen. The interpretation of art is subjective. Any seeing or feeling of slander is in the mind of the beholder. That is their interpretation. It is not inherent in this work. It is the nature of the object’s existence that produces the images of those objects. The objects are responsible for the images they produce.
It is an over generalization when the Costa Rican people are mentioned. Costa Ricans, like everyone else, are unique individuals. They all are different. Any statement does not apply to 100 % of the population. Such statements only present the sentiments of the country as expressed and interpreted by its society. The stories that show the various situations and possible situations are expressed as anonymous third-party retelling of gossip from an anonymous third party. So to protect the innocent from possible slander charges, you could consider this book to be a work of entertaining fiction. Still it does present many things to be aware of. People doing business in or considering doing business in Costa Rica or other places in the world should be aware of these things. People living in or considering living in Costa Rica or other places in the world should also be aware of these things.
There are many pitfalls to watch out for in Costa Rica. You should watch out for the pitfalls everywhere. But the pitfalls do cast a negative light. Many pitfalls to watch out for are presented in this book. This book has concentrated the pitfalls into a compilation. So this book also has the negative light concentrated. The reality does appear sunnier. The reality is not as dark as a compilation of pitfalls shows. But bright things you don’t have to watch out for. They are not part of this book’s premise.
Despite the negative light the pitfalls produce, Costa Rica is not a bad place to live or do business. It is this author’s opinion that Costa Rica is a better place to live per unit cost of living than the United States of America. It is this author’s opinion that Costa Rica is a better place to do business than the United States of America. Anywhere you are there are things to watch out for. This book can help you be aware of the things you should beware of.
C. The Language
The official language in Costa Rica and many other places in the world is Spanish. How the language expresses things can give you a little understanding of why the different interpretations could arise. The Spanish language is not as complete or detailed at expressing things as is the English language. So things can seem vague when expressed in Spanish. That leaves them open to a greater degree of various interpretations.
Another language consideration is the expressions. Sometimes the Spanish-speaking people mean the exact opposite of what they say. The meaning of the words that they use to say what they mean may signify the opposite of what they mean. One example is the word exit or leave, “sale”. They say to exit or leave when they mean to arrive. They say the sun exits “sale sol” when they mean sun rise. So “the sun exits” does not mean sunset when the sun actually exits. When they say the sun exits they mean the sun arrives. When people arrive they also use the word exits or leaves. When someone arrives they say they exited. I have been told their interpretation is that the sun or people have to exit someplace else in order to arrive here. So rather than say the sun or people arrive here they say they exited to convey the meaning of their arrival. It is kind of like the bottom of the box being labeled top.
Another expression translates word for word to say better than nothing “mejor que nunca”. They say this when they mean best of all. The logical interpretation of better than nothing is that everything else is better or equal to it. That would make the thing the worst of all. At best it could be tied for worst of all. But they mean best of all when they say worst of all. So even if you have learned the language you still may not know if they actually mean what they say. They could mean what they say. They could also mean the exact opposite of what they say. Or they could mean something entirely different. Just because you know what the words mean does not mean you understand what they mean when they say those words.
One important consideration involving the interpretations of the people, society and legal system in Costa Rica is the word to earn. The word to earn “ganar” is a good demonstration of the limitations of communicating in Spanish. The Spanish vocabulary is much smaller than the English vocabulary. So at times in Spanish one word is used for various things. In English there usually are different words for each of the variations. Earn is such a word. In Costa Rican Spanish the word earn “ganar” is used to mean obtained. Translation dictionaries usually translate “ganar” as to earn. But in Costa Rica they use “ganar” to mean obtain. In other Spanish-speaking countries the word “ganar” very well could be used differently than it is used in Costa Rica.
One example of how the Costa Ricans use the word to earn “ganar” is how it is used in English. He did an honest day’s work and he earned an honest day’s pay. That use of the word earn is what is understood in English. But the word earn does not always translate from Spanish like that. So when you hear the word “ganar” in Spanish it does not always translate like a translation dictionary may claim it does. It does not always mean what the English word earn signifies.
He went to the horse track and won $100.00 is an English sentence. He bought a lottery ticket and won $1,000,000.00 is another English sentence. In Spanish they have a word that means win. They use it for sporting events. But in the case of winning a lottery or a bet they use the word earn. If someone wins a bet in Costa Rica they say that person earned the money. In Costa Rican Spanish and possibly other places in the world the Spanish word “ganar” is used for more than to earn or to win. It more accurately translates to obtain.
So the Spanish speaking people in Costa Rica usually think of any form of obtaining as earning. He did an honest day’s work and obtained an honest day’s pay. So they say he earned it. He went to the horse track and won a bet. So they say he earned it.
There are interpretations of “ganar” that are even harder for English speaking people to follow. The word “ganar” which often translates to earn is also used to described swindling and theft. A neighbor could remove the siding from his neighbor’s house. He could climb through the hole he made in the wall. Then he could take the TV. He would then have that TV in his home with him. In English, people would say he broke into his neighbor’s house. Then he stole the TV. Yes, that is how he obtained the TV. In Costa Rican Spanish they would say the thief earned the TV. They have a Spanish word for stole, “robar”. But they, as likely as not, will say the thief earned what he stole rather than say the thief stole what he stole.
A con artist could swindle his mark out of something, or out of a lot of money. Since the con artist obtained it, in Costa Rican Spanish they usually say the con artist earned it. They do have a word for swindle, “estafar.” But they, as likely as not, will say the con artist “earned” what he swindled rather than say the con artist swindled what he swindled. The Costa Rican society accepts stealing and swindling as earning. The victim of the thief or swindler could be slandering the thief or swindler by saying they are thieves or swindlers. Such statements could make it more difficult for the thief or swindler to “earn” his income.
Another thing many English-speaking people find odd is the use of gender for things that don’t have a gender. Gender is seen by English-speaking people as the expression of sexual characteristics. Male and female are the result of the sexual characteristics of the individual. Sexual characteristics are associated with the type of physical genitalia the being possesses. Things without sexual genitalia don’t have sexual characteristics. Things without sexual genitalia are therefore neutral in their existence.
The Spanish language assigns a gender to neutral things. Things that don’t have any sexual characteristics are arbitrarily assigned sexual characteristics in the Spanish language. They usually are not considered to be the neutral thing that they really are. There is some neutral in Spanish. A few things are treated as not having sexual characteristics. But most neutral things without any sexual characteristics are assigned a sexual characteristic in the use of the Spanish language. The Catholic priests in the past generally were the ones who arbitrarily assigned the sexual characteristics to the neutral things. The apparent irregularities in their process can give some insight into their lives and thinking processes.
Sometimes the sexual orientation assigned to the neutral thing seems purely arbitrary. For other things it can make some sense. An apple is “manzana”. That is the fruit. It is considered to be feminine and ends with an a. The apple tree is “manzano”. It ends with an o and is considered to be masculine.
Masculine and feminine features in language often assign a sexual characteristic to items that have no sexual characteristics. They are neutral. But in Spanish, and some other languages, the neutral items are assigned a particular sex. Usually in Spanish the words that end in o have been assigned the masculine sexual characteristic. And the words that end in a have been assigned the feminine sexual characteristic. But there are a few exceptions. One interesting exception is the word for hand “mano”. It ends in o. But it has been arbitrarily assigned by the past celibate priests to have female sexual characteristics.
Even with living beings that do indeed have a male or female gender, the language can seem very odd to foreigners. The gender is applied to more than the noun that has the gender. Many of the rest of the words in the sentence, besides the noun that has a particular sex, are changed so they too are assigned that same sexual orientation. To a foreigner who understands that neutral things are neutral, this can seem very odd. Such over-expression of gender seems like being very hung up on the type of genitalia that the noun in question has. In Spanish the genitalia, real or imaginary, is so overly referred to in almost every word said.
There are many seemingly odd or irregular ways the Spanish language is regularly used in Costa Rica. Another revolves around the matter of the cost and the worth of something. They do have a word for cost “cuesta”. They can say how much does this cost “cuanto cuesto eso”. But they don’t usually say that. They say what is this worth “cuanto vale eso” when talking about its price. Often they can insist that the thing is worth what ever price is put on it. There is little understanding that overpriced items are not worth the price asked. If they were worth the price asked then people would be paying that much for it. There is resistance to the idea that the item is not worth what it is priced at. Often people are not buying an item. They prefer to think that it is worth whatever fanciful price is put upon it. It is just that people don’t have the money to pay that much for it.
There is an expression, “no vale la pena”. It means it isn’t worth the pain. This expression is usually used for actions. Doing something may not be worth it. You can tell them that paying that much for something causes you a lot of pain. Paying that high price for the thing just isn’t worth all that pain. Then they have a better understanding that the asked for price is not always what the thing is really worth. But generally they don’t understand any difference between the asking price of something and what it is really worth.
Such odd use or even misuse of language does in deed influence their society and also their legal interpretations.
2. Laws and Legal Considerations
A. Theft
The laws and legal interpretations in Costa Rica can also seem absurd to English speaking people. One thing that many foreigners find hard to believe is that in Costa Rica, theft is legal.
Once upon a time in Costa Rica a husband had a job. He worked in order to support his family. His son went to school. One day his son got sick and his mother had to leave the house and go to the school to pick him up. Their neighbor was a bum. He took that opportunity to remove the siding from their house and steal their TV. In Costa Rica such a thing is considered to be the legal right of the bum. Such a thing is his way of “earning” his income. If what the thief steals is worth $500.00 or less, it is the thief’s legal right to take it. The Costa Rican people and their legal system will say the thief legally “earned” it.
The hard-working home owner has to fix the siding on his house and replace his TV. Many Costa Ricans consider that to be an economic stimulus. They don’t often recognize that the hard-working home owner, if not robbed, would have spent his money on other things. So his need to replace what he had does not result in any more money circulating through the economy. It, therefore, is not an economic stimulus. It just means the hard-working people enjoy less of what their labor earns. So it really is more like another tax.
You may come to Costa Rica and have friends and neighbors. You may want to invite their entire family to a restaurant or over to your house. You could ask them when all of them could be available to attend such an event. Most likely you would be told that there never would be such a time when all of them could attend an event beyond their own property. There will never be a time when their entire family could attend such an event. At least one member of their family must be at home at all times to protect the home from theft.
In Costa Rica there are many places that get flooded every year or almost every year. Many people are moved to shelters. Still usually the father insists they have to stay behind to guard the flooded house from theft. There are many reports on the Costa Rican TV news regarding the floods. When the flood forces the last person to leave the house they almost always suffer. All their belongings usually get stolen from the flooded house when nobody is there to protect against it. The thieves who were exercising their legal rights to steal were most likely their neighbors. They stayed behind to guard their own houses and to look for opportunities to steal from their neighbors. That way they can “earn” more for themselves.
You may be wondering how such a legalized theft legal system could have come about. It certainly is seen as a great corruption by many people. And corruption is part of the reason why theft is legal in Costa Rica. Political and religious influences also play a part in it.
A story about how theft became legalized in Costa Rica involves politics. It also involves the various things that influence the society. No investigations have been done to determine if this story is true or not. But this story could provide some idea of how the legalized theft could have come about.
Once upon a time a group of Communists existed in Costa Rica. They felt it was the responsibility of the productive hard-working people to support the irresponsible, unproductive, lazy bums. Furthermore the responsible productive people should support the irresponsible unproductive people to the same standard of living that they were working to attain for themselves. They claimed that the hard-working people should support the lazy bums of the society equally as they support their own offspring. That way everyone in the society would have an equal standard of living. And it was each person’s choice if they wanted to be productive hard-working people or lazy bums.
But as you can imagine such a political party was considered absurd. The political ideas just would not work for the society. The political ideas also were very unfair for the honest hard- working, productive people. So the group of Communists realized that getting the society to accept their political ideas would not be accomplished with traditional political methods. Their ideas would not work to improve the society. Their ideas were very unfair for the honest, productive, responsible people. Their ideas would be detrimental to the society. The Communists were not going to implement their ideas by going through the usual political channels. So they decided to not be politicians in order to present their ideas to the people. To further their detrimental political ideas they decided to become Catholic priests.
They worked their way up the hierarchy of the Costa Rican Catholic church. They presented their ideas that the productive should support the unproductive as part of their church service. They presented the idea that the unproductive should have the right to steal from the productive. They ignored God’s commandment that says thou shalt not steal. They said it should be a bum’s legal right to take from the productive. That would make things more equal. It certainly would not make the production of things more equal. But they only wanted to make the consumption of things more equal. They did not want to balance the consumption with the production.
As the story goes these Communist ideas were presented to the Costa Ricans as part of their Catholic Church services. The Costa Ricans, too, ignored the commandment that says thou shalt not steal. In other countries it is reported the Catholic Church was not infiltrated by Communists. So in other countries the Catholic Church may not have furthered these Communist ideas. But Costa Rica had its own experiences. Those unique experiences have helped make Costa Rica unique. So if the lazy bum thief steals, it probably is legal. If the thief says it is so he can eat, it probably is legal. The thief can legally steal less than $500.00 per victim per day. Then his theft is perfectly legal under Costa Rican law.
An honest, hard-working, tax-paying, productive person has to work a lot to honestly earn money. More than an entire month’s work is required to honestly earn after taxes and minimal living expenses the surplus $500.00. But in Costa Rica a lazy bum thief can legally take, tax free, the honest worker’s gain from more than a month’s honest work. The lazy bum thief can steal that much from each victim every day. Do you think that is incentive to be honest, industrious tax-paying citizens? Do you think that is incentive to be non-taxpaying, unproductive, lazy bum thieves?
Political corruption furthers this situation. Public funds could be spent to protect the society from theft. Politicians could personally pocket the public funds. The politicians manage the society. They say it is not worth spending public funds to protect the society from theft. If they spend the public money for the public good, there would be less public money for them to personally pocket. I will present more about that later.
The Costa Rican laws, the legal conditions, and their society are very different than you likely expect. Don’t expect their laws to be fair. Don’t expect their laws to promote a healthy society with “Christian” values. Don’t take for granted that their laws and legal system will be sane.
B. Following Directions
Once upon a time a foreigner hired a Costa Rican to do a job. The job was to clean up the property behind the foreigner’s house. The foreigner explained what work should be done. In a corner of the property there was a pile of bonfire wood. A tree had fallen near it. The foreigner told the Costa Rican worker to cut up the fallen tree. Then throw the wood onto the pile. Then go do the rest of the work that was to be done. The foreigner then went off to do his own tasks.
An hour later the foreigner was interrupted from his tasks. The bonfire had gotten out of control. The Costa Rican worker, on his own account, had changed the work he was to do. Rather than do the work he was assigned to do he decided to ignite the bonfire and watch it burn. Watching a fire apparently seemed like a more enjoyable way for him to earn his day’s pay than doing his assigned labor.
So he set ablaze a bonfire in the middle of the dry season on a windy day. He never prepared any water hoses that were available. He didn’t even get any other tools that would help manage a fire. Many such tools were available. The foreigner didn’t even know the Costa Rican smoked cigarettes. The foreigner did not know he had the ability to ignite the fire.
Still the fire was burning out of control. The fire was putting the entire country at risk of being burned down. After a few hours of hustling, the foreigner and the Costa Rican worker finally got the fire under control. Later that afternoon they finally got the fire put out. So finally the entire country side was no longer at risk of being burned down.
A neighbor that had the back portion of their property burned in the ordeal was reasonable. They said they would plant vegetables there. So this story did not have a disastrous ending. Because the foreigner had given the Costa Rican a job, he was at risk. The Costa Rican did something other than his assigned job. Under Costa Rican law, had the neighbor not been so agreeable, the foreigner would have been responsible for all the damages that could have resulted. All the damages the fire could have caused to the public country side and the private property of others would have been the responsibility of the foreigner.
By giving the Costa Rican a job, the foreigner, unbeknownst to him, had put everything he owned at risk. A Costa Rican court of law probably would have forced him to pay all the damages. The Costa Rican worker did something other than the assigned work. That caused great risk to the employer.
The Costa Rican worker could not understand what concern his actions could cause. After all, poor Costa Rican peasant farmers burn their farm land in the dry season. They do it every year to prepare it for planting. The Costa Rican government won’t take the possessions and farm from poor Costa Rican farmers. If they cause damages they won’t lose anything. The poor Costa Rican farmers have nothing to lose by lighting big fires in the dry season. But a foreigner is put at risk of losing everything he or she owns should the worker light a fire on their property in the dry season.
Environmental protection laws prohibit clearing trees. Still the poor Costa Rican farmers clear the land when they want. Like the thieves they only say they are doing so to grow food so they can eat. Then they apparently are exempt form the environmental protection laws.
The idea of not doing the assigned job seemed acceptable to the Costa Rican worker. Just standing around and watch a fire seemed to him to be an acceptable way to obtain his day’s pay. Costa Rican workers really need a lot of supervision.
C. The Peter Principle
Once upon a time a Costa Rican worker was promoted to manager. The foreigner believed in promotion from within. He was developing a team of Costa Rican workers for the Costa Rican business he was setting up. The newly promoted manager had been the best of the workers during the training period. The business needed a line foreman. The foreign manager had many administrative duties to attend to. He could not be the line foreman beyond the training period.
When the foreign manager was present the line progressed like clockwork. The produced results were dependable and consistent. When the foreign manager was away doing other parts of his administrative job the line’s production was much lower. It also was a bit more inconsistent. The Costa Rican worker that was promoted to line foreman would sit down with his friends and stop working for long periods of time when the foreign manager was not there. The rest of the Costa Rican workers on the line, seeing this, would also sit down and stop working.
So when in Costa Rica, and probably many other parts of the world, remember the Peter Principle. The Peter Principle is an adage. It says that often people are promoted to their lowest level of incompetence. Then they no longer are able to continue progressing up the hierarchy with promotions. So be very aware of the Peter Principle. Giving a Costa Rican worker a promotion of any kind very likely is promoting them to a level that they are incompetent to properly perform.
It is likely that most Costa Rican workers don’t have the education, training, or ability to learn culture or work ethic well enough to handle any job beyond the basic entry level. For some Costa Ricans, just giving them an entry level job is promoting them to a level at which they are incompetent to perform.
D. Labor Laws
In the past there have been some very questionable labor practices in Costa Rica. To protect the workers from being exploited, many labor laws have been written. Labor laws can and do change from time to time. The specific details of laws could easily become obsolete. Presenting the general concept can provide useful information about hiring and employing in Costa Rica. If you are going to hire a Costa Rican you should investigate and understand the present labor laws. You should know what is required of an employer and employee. You should also know how the government is involved in that situation.
The first consideration is probably paperwork and taxes. If you hire contract labor for specific jobs you are the contractor’s customer. Then you are not required to do paperwork or pay taxes. So you may want to try to do everything with contractors. But if you need traditional employees, you will have to deal with the government. You will have to register the employment and pay a 10% income tax. The employee does not have to pay a portion of it. Also there is no employee filing because there is nothing to return.
In addition to paying the government, in order to hire a person, the person employed is also entitled to many extras. The additional costs of hiring a person in Costa Rica include, but may not be limited to, many things. There is: vacations “vacaciones,” an additional month’s pay to be paid in December; “alguinaldo,” overtime pay, “horas extras” and holiday pay, “feriados.” Also additional compensation may be required if the agreed-upon pay was not up to the minimum wage for the job “unidad de salario.” When terminating a vested laborer, there will be other extras. You are expected to pay an additional half month’s pay if they are not properly pre notified of their pending termination “proviso.” Also, they accrue a severance package, “cesantia.” Then depending on how the labor was contracted, there could be taxes, “impuestos.” There also could be other social benefits like workers’ compensation insurance, “poliza”. All these extra benefits do seriously raise the cost of employing labor in Costa Rica. Pensions are not obligatory. The employer or employee can choose to pay into the pension system. For that, a monthly payment would be paid to the social security office, “caja de seguros socials.” Usually only government workers receive such an “earned” benefit. Others usually prefer to manage their own money.
It is possible you can agree to a payment schedule and amount for the work. Then after time the worker can make complaints that the agreement did not include many of the benefits. Your agreement ahead of time may have had a pay scale high enough to cover these costs of employment. But the employee still can make their complaint that some benefits were left out and should be paid retroactively. In those cases the employer may have to pay extra beyond the agreement with the employee. An employee may ask to work a holiday so they can gain extra money. Then they can complain to the Ministry of Labor and Social Security that they did not get time and a half or double time for working that holiday. That sort of thing can also increase the costs of labor beyond what was projected.