In order to work in Costa Rica, you must either be a citizen or have legal permanent residency. With any other residency type (rentista, pensionado, etc), you are allowed to own a business but you cannot work in that business. You must hire Costa Rican labor and your role is limited to management of the business. That is why many of our restaurants may have an expat owner but all they do is visit with customers, they don't work the kitchen or wait tables for example.
More popular now are people who "tele‐commute" internationally. Those who work fro a company in their home country (i.e. USA, Canada, Great Britain, Germany, etc) on or over the Internet. They are paid by their company, but physically reside in Costa Rica. This is legal. However, there are two mportant points:
?? The paycheck or deposit must come from outside Costa Rica and your work must be unrelated to Costa Rica. Medical transcription and computer programming are good examples.
?? You still must apply and be accepted as a legal resident. Under no circumstances can you come to Costa Rica to work and not be legal, regardless of where your paycheck comes from. For example, younger people could apply as "rentistas," then convert to Permanent Residency after 4‐5 years.
So to be clear, while you can own a business here and live off the income from that business, you cannot actually work in that company in any capacity other than owner and manager.
"Representante" is a form of residency most used by those who set up and manage businesses in Costa Rica and serve as a Director in that corporation. Here, you can receive a salary and do the work of the corporation, but there are heavy investment minimums, required annual financial statements, and you must employ Costa Rican labor in that business. It is considered a lot of responsibility to do this, AND immigration can randomly and arbitrarily enforce all the rules.
A Permanent Resident has all the rights of a Costa Rican, and can hold a job in any sector, own a company, and work within that company in any capacity. It takes time to establish permanent residency however.