Pam Houser
Posted: Monday, December 8, 2008 7:34 pm

Whales Tale - Dominical/Uvita

Has Costa Rica’s “Pura Vida” snagged you too?

In April 2007 my husband and I visited Costa Rica with some friends, just looking for an adventurous break from the hamster wheel. Halfway into our escape we collectively decided we needed to purchase some property in paradise as soon as possible. We were captivated by the simple lifestyle, beauty, nature, friendly people, warm climate, safe surroundings, peace and tranquility, lower cost of living, and the proximity to the U.S. in this up and coming new world. After talking with several expats we were quickly consumed with the idea of transitioning our lives there for a real lifestyle change, and wondered how fast we could make it happen.

Most of us in our mid-40s, tiring of the fast pace and keeping up with the cost of living in “gringo landia,” (as locals say) we began to envision our retirement in the Central or Southern Pacific Zone. It became the topic of incessant conversation. We enthusiastically began to ask for leads from our new expat friends on properties in this region and found the perfect hideaway two blocks off the beach in the edge of the rainforest jungle of Parque Nacional Manuel Antonio. It was the perfect new rental home—a naturalist’s paradise, with capuchin monkeys, three-toed sloths, an amazing array of exotic birds, a friendly croc in the lagoon between the property and the beach...and world-class game fishing just offshore. We knew we’d have no trouble keeping it occupied year-round.

We were overcome with excitement that we had willed this to happen so quickly and that we had found affordable new construction in one of the most visited areas in Costa Rica. We contacted the owner, who also represented the homeowners association and owned the home through CONCESSION, and we began our due diligence.

“CONCESSION? Okay, so what exactly does that mean?”

Well, for us, it meant we didn’t want to take the risk.

“RISK? Is there a RISK?”

“Well, the property comes with an L.L.C. You’ll need to own it as a company.”

“LIMITED LIABILITY COMPANY?”

“Yes. You won’t need to form your own L.L.C. because you’ll be purchasing one with the property.”

“What about the title? Can we get clear title on a CONCESSION property?”

“Sure, you can get clear title, but.......”

Needless to say this is where the adventure really began! Here are a few helpful tidbits, professional contacts, and other information I’ve encountered in my research to help facilitate an easier investment venture for you. If you have helpful information on investing in Costa Rica, please post it here on www.easylivingfrontrange.com.


Planning to Invest in Costa Rica
By Henry Land, Land & Associaties
The Costa Rica Guide

ABC’s to Incorporating, Buying Property and Becoming a Resident. Many of our foreign clients have similar concerns when we first discuss their investment plans in Costa Rica. Almost everyone we have met wants to know about incorporating, buying property and obtaining residency.

We believe these three issues are the main components of what we would call the "typical investment package"; which, just by following some basic steps would make your Costa Rican venture a very successful one.

Incorporating in Costa Rica
The typical limited liability company (“Sociedad Anónima” or “S.A”.) must be incorporated by at least two people before a Costa Rican Notary Public. After such incorporation, the shares may be transferred and it is legally feasible to have a corporation in which one person is the owner of all shares.

The incorporators must choose a name (which must not be similar to any existing corporate name); appoint a Board of Directors (which, by law, must have a minimum of three members, President, Treasurer and Secretary) and a Comptroller. Each one of these positions must be occupied by a different person; however, the initial incorporators may occupy them.

Other crucial issues to be decided are the capital of the corporation (the higher the capital, the more registration taxes are to be paid); the number of shares composing such capital (a share cannot be divided according to Costa Rican Law -fractions of shares are not acceptable-; thus, it is advisable to have a number of shares that would permit future distributions of the participation in the company) and the representation of the newly formed company (there must be at least one representative of the company with powers of attorney to act on its behalf; however, at the time of incorporation, or later on, the powers of the company's representatives may be limited, for example, to specific actions or amounts).

Costa Rica has what we like to call a "hybrid" corporate system. The incorporation deed, as well as all changes to the company's By-Laws, are recorded in the Public Registry, where any person has access to them. However, all transfers of the company's shares are recorded in the Shareholders Registry Book, which is kept by the corporation and is only available to company's shareholders and officials; all other parties can only review it with a Court order.

When you are buying real estate, it is advisable to do it on a corporation's name. In this case, transfers could be made easier and the structure may be more flexible for other transactions and for organizational matters.

Buying Real Estate
Most properties in Costa Rica are registered in a computer system called "Folio Real". This system is centralized at the offices of the Public Registry in San José. Before buying land (or even before seriously considering an offer to buy land) a title search in Folio Real should be performed.

Such a title search will show all data on the property, including area, ownership, boundaries, location, mortgages and other liens. A few properties have not been incorporated to the "Folio Real" system yet. They are still registered in special books kept in the Public Register. Such properties may also be accurately title searched in the Public Registry.

When considering buying land, the first question to be asked is if you are being offered ownership rights (derecho de propiedad) or occupation rights (“derechos de ocupación”). In the case of occupation, you would be dealing with land that has not been registered, cannot be title-searched and must go through a long process in order to be registered. Ownership rights, in the contrary, are registered and are equal to the concept of owning land in the United States or Canada.

Another situation one may encounter regarding land, especially in beaches, is the concession. In this case, the government gives a private party the right to use the land for a specific period of time. In general terms, the concession may be considered as a lease. The concessions' registration system is different than the one for regular land, and has particular requirements regarding zoning, terms, occupation, etc.

In conclusion, before buying, before offering or even before seriously considering a piece of land, inquire about its status and perform a title search: these simple steps could save you a lot of money and effort, and will definitely make your Costa Rican investment worthwhile.
Residency

Investing in a country as beautiful as Costa Rica is the final pretext many people are looking for to leave everything behind and start a new and different life. Understandably, one of the most popular concerns is to become a resident.

Costa Rican Immigration Laws allow foreign citizens to
become residents in specific cases that range from having a family relationship with a local citizen (marrying a Costa Rican, having Costa Rican children) to demonstrating the government that the applicant will not be a burden for the country, mainly showing sound resources to be established in Costa Rica and, in some cases, to create a business here. Our mainly recommended regimes are the resident pensioner and the resident annuitant status. They are both administered by the I.C.T. (Costa Rican Tourism Board).

The resident pensioner status is used for foreign citizens who have retired from government service or from selected private entities and receive from them a permanent life retirement income of no less than US$600.00 per month. Such amount must be transferred periodically to Costa Rica, and its reception and conversion into colones (Costa Rican currency) at designated institutions has to be demonstrated.

The resident annuitant regime is applicable to all foreign nationals, regardless of age, receiving a fixed monthly income of no less than US$1,000.00. The funds of the deposit can come locally or from abroad and their conversion into colones (Costa Rican currency) at designated institutions has to be demonstrated.
Investing in Costa Rica can be one of your life's best decisions. There are many things to discover and experience. Being wise enough to plan your investment will make this venture real and sound. (Henry Land)


Pam’s Beginner Resource Guide for Investing in Costa Rica
Note: The information contained herein is not offered as a personal or professional recommendation and should be recognized solely as an easy source for beginning your investigation into real estate investment opportunities, professional services and information pertaining to Costa Rica’s political climate, economy, future growth & development plans, regional destinations, tourism offerings and daily news.

Real Estate Contacts & Investment Opportunities:

1) For sale by owner & developer
www.forsalebyownercostarica.com

2) Realtors:

► Paradise Brokers: Costa Rica
► www.paradisebrokers.com

► Latitude 9 Realty/Development/Investments
► www.latitude9.com

► Coldwell Banker Costa Rica
► www.cbcostarica.com

► Xclusive Realty
► www.xclusiverealty.com

► Costa Rica Tropical Properties, Inc.
► www.costaricalandsales.com

► Sotheby’s International Realty
► www.sothebysrealtycr.com

► Century 21 Regional Office for Central America
► www.century21enlinea.com


Professional Services:

1) For Title Search and Title Insurance
Stewart Title Costa Rica
From U.S. (713) 589-6474 / 429-5323
San Jose Tel: 506-258-5600
In Costa Rica: 800-STEWART
www.stewartcr.com

2) On using IRA/401k Rollover Monies/Self-directed IRA
Uranga & Associates
480 Washington Avenue North
Suite 201
Ketchum, Idaho 83340
800-564-8625
www.urangafinancial.com

Guidant Financial Group
13122 NE 20th Street, Suite 100
Bellevue, WA 98005
888-472-4455
www.guidantfinancial.com

3) Real Estate Investment Law, Corporate Law,
Escrow Services, Title Services, Tax
Gonzalez & Uribe, Attorneys at Law
San Jose Tel: 506-231-7060
www.gonur.com

Bufete Hernandez Mussio & Associates
Law Firm & Real Estate Financing
San Jose Tel: 506-2519-4647
U.S. & Canada: 1-877-545-6462
www.crtitle.com

4) Property Inspections
Landmark Construcción & Consultoría S.A.
Escazú, San José
Main (506) 288-6768
Fax (506) 288-6708
Tilarán, Guanacaste
Main (506) 695-3255
Fax (506) 695-3250
Mobile: (506) 895-8484
Web site: www.landmarksa.com


Helpful reading:

► Central America Today:
A Trade and Investment Magazine
www.Centralamericatoday.com
► Paseo En Costa Rica: www.paseocostarica.com
► The Tico Times: www.ticotimes.net
► www.InfoCostaRica.com
► Buying Real Estate in Costa Rica: www.gonur.com
► www.amcostarica.com

Helpful conversions:

1 acre – 4,047 square meters = .405 hectares
1 hectare = 10,000 square meters
1 hectare = 2.5 acres
1 meter = 3.28 feet
1 square meter = 10.76 square feet
1 square foot = .093 square meters

To convert:
Acres to Hectares – multiply by .4047
Acres to Square Feet – multiply by 43,560
Inches to Centimeters – multiply by 2.54
Kilograms to pounds – multiply by 2.20
Kilometers to miles – multiply by .6214
Liters to quarts – multiply by .9081
Meters to feet – multiply by 3.28
Meters to yards – multiply by 1.09