Costa Rica... Hot Project... Attention Investors!
Villas Roma del Mar Sociedad Anonima - Villas Roma del Mar Sociedad Anonima in Punterenas, Costa RicaHeadline:
ROMA DEL MAR is a developing community in Playa Naranjo, Puntarenas, Costa Rica. It is great living! Residential properties providing the foundation for carefree, coastal living featuring single family homes and 1/2 Acre+ lots with views to the Golfo de Nicoya.
Is the Roma Del Mar development completed? ? No. So far we are offering the very first home sales that we have in this development. we are currently building only the second house Is the home being sold by the developer or by the owner? We are representing the project and are selling the homes for the owner.
What is the travel time from San Jose to Roma Del Mar? From the international airport San Jose to Puntarenas approx. 1.40 hour ; then a trip on the ferry to Playa Naranjo (1.15 hour); from the ferry terminal in Playa Naranjo to the Roma del Mar project 10 minutes drive.
Are their any beaches close to property and if so how far? The model home is within the Roma del Mar community which has 5 beaches; it is approx. 200 mts. from the house to the beach (5 Minutes walk)
Is their a recurring charge for the property and if so what are they (total cost) aka property management fees, club fees, security fees? We will charge approx. $50 per month for security, maintenance, etc.; electricity/ telephone depending bill of the house.
How close are you to a store where you can buy food? 25 min. drive to the next little town where you can shop for groceries etc; we are currently organising a delivery service for general groceries and fruits and vegetables once a week.
Are there going to be other homes in the area?
We are currently constructing the second home, and will start soon with the third house (in a few months another 2 houses); furthermore there is our home which is 5 Minutes away and close to our house there is another house which is already sold; so you find a nice little international community (with many American; we are German)What else is in that area? Any local eateries? There are some restaurants and little hotels close by, but everything still low key as this area is not one of the big tourism places down here in C.R. – just come and check it out yourself.
Is there Internet access there? Is it dial-up or broadband?
ABOUT COSTA RICA
Columbus called it the "Rich Coast" upon his discovery in 1502. Rich in beauty, rich in ecology and rich in flora and fauna with thousands of species of plants, animals, birds and insects that live in magnificent and sometimes mysterious tropical forests. Costa Rica's wealth of natural resources is so abundant that it even exports oxygen, an essential nutrient for a better, healthier and cleaner way of life.
Some call Costa Rica the "Switzerland of the Americas", others call it "Paradise on Earth". You can call it what you like but one visit to Costa Rica and the memory of it will be etched in your mind forever.
About the size of West Virginia, Costa Rica encompasses about 51,000 square kilometers of enchanting rainforests, majestic mountains, and countless virgin beaches among rocky bluffs, enclosed by numerous peninsulas and bays of unsurpassed scenic beauty. Its natural heritage form one of the world's most outstanding biological reserve and national park systems.
THE PEOPLE
The expression "Pura Vida," literally translated as "Pure Life," best describes the Costa Rican way of life. Ticos, as the locals commonly call themselves, are their country's greatest asset and are renowned for their friendliness. They are warm hearted, gracious, educated, entrepreneurial and ready to accept you into their country, their lives, and their homes. In addition, foreigners are usually pleasantly surprised to discover how many of their neighbors are also from foreign soil.
THE LANGUAGE
The official language of Costa Rica is Spanish, but a great many Costa Ricans speak English. Additionally, as Costa Rica continues to attract visitors from the United States, Canada, Europe and Asia, other languages such as French, German, Italian, Chinese and Dutch are becoming more and more prevalent.
THE CLIMATE
Costa Rica boasts about as many microclimates as could be found in any country in the world. Like it cool, very cool? Try high up in the mountains above the Central Valley. Hot and dry on the beach? Try the Guanacaste Gold Coast. Want to live in the rain forest? Like remote? Check out the Osa Peninsula. Whatever your preference, Costa Rica has something for everyone.
Some areas such as Grecia and Atenas, forty-five minutes from San José, claim the best climate in the world. In fact, the whole of Costa Rica boasts spring-like climate at least ten months out of the year. Temperatures in the Central Valley and the mountains average 68º degrees Fahrenheit (20º degrees Celsius) and in the lower coastal areas , about 79º degrees Fahrenheit ( 26º degrees Celsius). In the northern province of Guanacaste they say half the year is like living in Hawaii and the other, like living in Palm Springs, California.
THE CURRENCY
The national currency of Costa Rica is the Colon. U.S. dollars can be easily exchanged throughout the country at any bank, national or private, and also at most hotels and money exchange companies. In addition, nearly all hotels plus some restaurants and shops will accept U.S. dollars as payment. Canadian dollars may be exchanged at branches of Banco Nacional and other monetary currencies should be converted in San José at either Banco Central de Costa Rica or at a currency exchange house. Be certain to check daily exchange rates at local banks, currency houses or in the local newspaper as it changes continually.
BANKING
The banking system in Costa Rica is very modern and offers all local and international services. This includes issuing credit and debit cards, loans and both personalized and computerized banking. Automatic Teller Machines (ATM's) are available throughout the country and will accept PLUS cards as well as local ATM cards. Visa credit card advances are easily obtained at most local banks.
COST OF LIVING
The cost of living is probably one of the most important issues concerning prospective full-time residents. Although the cost of living here is less than that of the United States, the difference is not dramatic. Housekeeping and gardening help is very affordable, as are other conveniences, which are often considered a luxury. On average, a monthly income between $1,500 to $2,500 with established accommodations will provide for quite a comfortable lifestyle.
TAXES
Out-of-country income is not taxed in Costa Rica, and if you are employed in this country, income tax is minimal. Basic property taxes are six-tenths of one percent of the property's stated value, which is nominal by North American standards.
HEALTH SERVICES
There are numerous quality hospitals operated by the National Social Security System located throughout the country. In addition, private healthcare is quite common and considered inexpensive. Privately operated hospitals offer highly educated physicians and personnel, excellent facilities and multidisciplinary Medical Corps catering to the needs of many foreign visitors who frequently take advantage of the better value and best professional medical care offered in Costa Rica. Cosmetic surgery plus dental and optical care are very affordable and are in particularly high demand.
EDUCATION
Costa Rica provides free education for its residents and boasts the highest literacy rate in Central America, rivaling even that of many larger and much wealthier industrialized nations. The right to primary education for both sexes was established in 1869 and has been declared obligatory. In addition to free public education, there are several high quality private institutions extending from the primary level up through the university. Although most of these institutions are located in and around San José, the rapid development of the Guanacaste Gold Coast area has begun to attract some of the private, higher quality schools to the region.
EMPLOYMENT
Employment opportunities are limited, as Costa Rica gives job priority to its residents and requires work visas for any foreign visitors who seek employment in this country.
RELIGION
Perhaps as much as 90% of the population practices Catholicism, the country's official religion. Other religious beliefs exist freely although and are protected by the Constitution as well.
GOVERNMENT
Costa Rica is a free and independent republic and its people have enjoyed a peaceful, democratic way of life since 1889. The military as a division of the Costa Rican government was abolished in 1948 and is now prohibited by the Costa Rican Constitution. The current leadership consists of three branches of government including the President, elected by popular vote for a period of four-years and exercising executive powers; the Congress, a single chambered legislature, whose members are also elected by popular vote for a four-year term; and the Supreme Court, acting as the judicial body of the nation. The Constitution guarantees and protects its people's right to life, freedom and basic civil liberties. The death sentence was abolished in 1882, which has provided an ideal environment for several prestigious international human rights organization who have established their headquarters here in Costa Rica.
The country enjoys a quiet co-existence with its neighbors aided in part by ex-president Dr. Oscar Arias, a Nobel Peace Prize winner, for his negotiating efforts throughout Central America. Perpetual Neutrality was proclaimed in Costa Rica in 1983.
CRIME
The biggest crime facing Costa Ricans is petty theft. Violent crime is nearly non-existent and virtually all crimes committed are in and around the larger cities.
COMMUNICATIONS
Costa Rica's communication network is among the very best in Central American. Postal, facsimile, telephone and cell phone services, as well as electronic mail (Internet), are readily available anywhere in the country.
TRANSPORTATION
Costa Rica now enjoys the convenience of three international airports. The largest and most frequently used, located about twenty-five minutes from San José, is the Juan Santamaria Airport. It is serviced by several major intercontinental airlines with direct flights between North and South America, Europe and Asia. The Tobias Bolaños International Airport in Pavas is much smaller and receives flights from the United States and Canada only. The new airport in Liberia, Daniel Oduber International, in the province of Guanacaste, began operations several years ago, receiving international flights from the United States, Canada and Europe, catering essentially to the tourist industry with mostly charter flights. A domestic network of internal airports also serves local travel needs with daily flights to popular tourist destinations and other parts of the country from any of the international airports. There are also several private airline companies that offer charter flights to anywhere in the country with a landing strip. Their equipment includes twin-engine aircraft, helicopters as well as other aircrafts.
BUS SERVICES
There exists an excellent network of ground transportation throughout the country serviced by private enterprises. Regularly scheduled trips between San José and all parts of the country are reliable and very economical. In addition, there are several bus companies that offer scheduled departures to Panama, Nicaragua and the rest of Central America at competitive rates. There are also several companies that offer micro-bus direct transportation to/from and between the airport and major tourist spots around the country for about $20 USD.
CAR RENTALS
There is an impressive choice of car rental companies to choose from in Costa Rica and this can be a fun way to see the country. It is a good idea to shop around for the best deals though. Costa Rica's highway system is very good and most areas are paved or have 2-WD passable dirt roads, as is the case in remote and rural areas. It is important to remember that some roads that may be drivable in the dry season can become impassable during the rainy reason and may require 4-WD. Renting a 4-WD though is not necessary if you plan on sticking to the major routes. There are a few tollbooths throughout the country, but the charge is minimal. Gas stations are plentiful and many are open 24 hours, although if you are heading into remote areas its a good idea to fill up when you can and there are no self-service gas stations in Costa Rica so sit back and enjoy the luxury. Other important tips to remember: pay the extra full coverage fee when renting a vehicle; if in doubt about road conditions - it's best not to try it; maps are not always up-to-date and may not reflect current existing road conditions. Do not be afraid to ask directions, the people in this country are extremely friendly and are always willing to steer you on the right track.
HOTELS
Costa Rica offers a wide variety of hotel, bed & breakfast, and other short and long-term accommodations catering to even those with the most discriminating needs. Whether you want to be in the city, at the beach or in the mountains the choices are endless. There are also many self-contained resorts offering a great range of amenities and activities from golf, tennis, fishing, diving, and surfing to casinos and day spa facilities. Whatever your preference, Costa Rica has it!
ACTIVITIES
The variety of recreational and cultural activities available in Costa Rica is unlimited. From sailing, beachcombing, snorkeling, diving, kayaking, water skiing, parasailing, fishing, and surfing at the beach to hiking and bird watching in the rainforests - the possibilities are infinite. If adventure is what you seek, you will find it here. You can raft down class III and IV white water rapids, swing through the trees with monkeys on a canopy tour, bungee jump over a raging river, experience world-class wind surfing on Lake Arenal or catch a spectacular volcanic firework display. Horseback tours to local waterfalls and hidden beaches are abundant throughout the country as well. Or if more relaxing is your style, spend a day golfing at any of the number of championship golf courses, pamper yourself at a local spa or just enjoy a dip in some of the volcanic hot springs.
If you're looking for a taste of the cultural experience, you can enjoy a theater show, visit historical sights and museums, catch a movie, or sample the wide variety of cuisines found in and around the capital, San José. For those who live outside the metropolitan area, climb in your car, hop on a bus, or catch a flight on SANSA or Travelair into the big city for a couple of days.
INVESTING IN COSTA RICA
Costa Rica is quickly becoming an international hot spot. As more and more people begin to discover the beauty and temptation of the "Pura Vida" lifestyle, the more they want to become a part of it.
"When choosing a country to invest in, we find Costa Rica is greatly attractive to investors and their families." says Ricardo Monge, director of the Costa Rican Investment and Trade Development Coalition (CINDE), a private, nonprofit organization. And the proof is in the numbers as several international companies have already chosen this country as a prime investment location.
U.S. based giant, Intel Corporation, recently invested $700 million into an assembly factory and testing plant, which began operations in 1998. Acer America opened a new customer service facility as a base to branch out to the rest of Latin America and Firestone is currently doubling the capacity of its tire factory for export to the United States and other Central America nations. In addition, Lucent Technologies has opened a corporate office in San José with plans for expansion. Other companies such as Baxter Healthcare, Conaire Corporation and Bali Company are just a few of the many new businesses to join this growing list.
"Costa Rica is at a historic turning point; if we do things right we will grow very rapidly," says Monge. "We are trying to apply logistics to gain private sector expansion in order to better our infrastructure. This is crucial to the development of our nation."
Costa Rica, the most politically stable country in Central America, has proven attractive to investors for its relatively open investment and trade policies. Laws governing private investments are the same for nationals and foreigners. In addition, there are virtually no controls on foreign exchange transactions conducted by commercial banks. The exchange rate is determined by the Banco Central of Costa Rica through open market operations, and has disposable funds guaranteed by the export-import Bank of the United States and other major international banking organizations.
Ranking number one as far as investments are concerned, tourism remains in a dynamic role as Costa Rica's number one industry. A remarkable improvement in tourism has been noted in the past five years - nearly a 58 percent increase. The visitor count last year of 792,287, as reported by the Costa Rican Tourist institute's (ICT) statistical department, consisted namely of U.S. citizens, followed by Canadians, Germans, Mexicans, Italians, Colombians, Guatemalans, British, Spanish, French and Chinese.
As a result, there has been a tremendous surge in development within Costa Rica's hotel sector mostly in the regions of Guanacaste and Puntarenas with a reported $711 million in investments to date. The total for tourism investment reported last year amounted to $759 million. Some of the major developments included the Allegro Resorts' Caribbean Village and the $33 million new Marriott Hotel in Jaco. At present there are numerous other hotel, resort and golf developments in the planning stages or under construction in the northwest Guanacaste region, where the ICT continues to promote development of the area.
To benefit the investment climate, the government supports free trade and international competition. Clearly, the most enticing factor for foreign investors has been the country's income tax laws, which allow complete exoneration of taxes on an average of 8 to 10 years, and 50 percent exoneration for 4 more years depending on the investment. There is virtually no screening of foreign investment in most areas .
The ICT recently signed a $10 million, 12-step program for tourism development. Last year, they launched a very aggressive international advertising campaign with the tag line "Costa Rica, No Artificial Ingredients," which focuses on the country's unsurpassed beauty, adventure and natural environment, of which one quarter is dedicated to national forests, parks and reserves, and which the country continues to protect. The ICT and a number of private organizations, such CINDE, have placed considerable emphasis on facilitating investments and streamlining government services. CINDE's U.S. office in New York aggressively promotes Costa Rica as an investment destination.
A big attraction for tourism-type investments is the current incentive law, which offers a 12-year income tax exemption on non-distributed profits, land tax exemption, and offers duty-free entry to yachts, sailboats and certain motor vehicles for use in tourist transportation. Additionally, Costa Rica has one of the strongest U.S. dollar reserves in Central America (nearly $1 billion). It also has advanced electric and technological industries and Free Zones continue to be one of the backbones of Costa Rica's export and investment promotion strategies, contributing significantly to local economic growth. Investment in the Free Zones totaled close to $500 million, mainly from U.S. businesses. Companies currently under the Free Zone Corporation have close to 100 percent exemption on raw materials for export on most products. Most of Costa Rica's export incentives have been undergoing reforms to serve the international tendencies, and are on a par with tourism development.
Costa Rica remains a member of the World Trade Organization and the Central America Common Market, and has investment treaties with Switzerland, Great Britain, France, Germany, the Netherlands and the Czech Republic. Another incentive for investors has been the free-trade agreement under the U.S. Caribbean Basin Initiative, which guarantees access to the U.S. markets for many products. Under its Free Market treaty with Mexico, over 8,000 products became tariff-free in 1995. It also has a free-trade agreement with Panama, and similar agreements are being negotiated with Colombia and Venezuela. Primary trade discussions have been held with Chile, the market they are currently strongly targeting. " Bringing in key players such as Intel gives Costa Rica a letter of recommendation. Soon, other electronic industry firms will follow." It is a prediction that already seems to be becoming a certainty.
So come to our little corner of paradise and let Roma del Mar help you make your dreams a reality!
Choosing a Corporate Structure to do Business and/or invest inReal Estate in Costa Rica
Many foreign individuals starting a business in Costa Rica or merely purchasing real estate for investment purposes decide to use a corporate entity as the owner of such. This decision is a very wise one, and it is what we highly recommend to our clients as the first choice to be followed.
Ownership through a corporation allows one to have flexibility and more predictability in areas ranging from estate planning (if share ownership is properly structured the investor can avoid his heirs a painful and lengthy long-distance probate procedure), tax management (as an example, rules on corporate expenses are more flexible than the ones on personal ones), and representation (shareholders meetings can facilitate granting special powers of attorney or other types of authorizations for many actions thus not requiring local presence in the country).
The first question often asked by our clients is whether to use (or form) a Costa Rican corporate entity or use one already existing and controlled by such individuals abroad. Our advice is, in most cases, the use of a local entity. Although foreign corporate entities can own land and engage in business activities in the country, registration procedures (both at the Public Register and with government entities) as well as negotiation of contracts with private parties can get complicated, delayed and/or find obstacles when they are involved.
In any event, if a foreign entity will be used, note should be taken that we normally recommend registering the foreign entity in the Costa Rican Commercial Register as a branch or at least to register specific powers of attorney for such also in the Costa Rican Commercial Register. Both cases require a special and formal procedure that may take several weeks.
As mentioned before, in the great majority of cases, the use of a local corporate entity is preferred. Although Costa Rican commercial law contemplates many types of corporate forms, only two of them offer the investor the comfort of having structures similar to the limited liability companies to which he or she may be used to in their countries of origin.
Such corporate forms are the “Sociedad de Responsabilidad Limitada” and the “Sociedad Anónima”. In both cases, shareholders are only responsible for their participation on the company’s social capital and their own personal assets are fully protected and out of reach from any potential creditor the company may have.
The “Sociedad de Responsabilidad Limitada”, also referred to as “S.R.L.”, “Limitada” or “Ltda”, is a simpler form than the “Sociedad Anónima” and in most cases fills-up the blanks on its legal treatment from the much broader regulation of the “Sociedad Anónima”. S.R.L.’s are usually used only if any of their special features are especially appealing to the investor.
The special features of the S.R.L. are mainly the following:
Shares cannot be transferred to non-shareholders without the previous express consent of the other shareholders, who have a right of first refusal to purchase them.
These companies require, for their administration, no more than one individual (Manager), thus this is an especially appealing structure for cases in which the investor does not want to use and register (making public) the names of additional individuals to form part of what in the S.A. would be called a Board of Directors, as explained below.
The “Sociedad Anónima”, also referred to as “S.A.”, is the most widely used corporate structure in Costa Rica. It is pretty flexible and its legal treatment is extensive. In general terms, it can have any type of social capital (usually a low amount is used without any negative consequence) divided in as many shares as the investor desires (normally structured in a way in which they can be divided in as much shareholders that can be previewed, since such shares are, by law, not divisible).
The S.A. has many features, of which the most important are:
Since the positions of President, Secretary and Treasurer are legally mandatory and must be occupied by three different individuals, it must have a Board of Directors of at least three members, as well as one Comptroller, who must not hold any powers of attorney on behalf of the company.
Shares are represented by physical documents and more than one of them can be included in a certificate. They can be transferred to any non-shareholder without the approval of the other shareholders. Transfer is made through a combination of a transfer contract, the endorsement of share certificate(s) and an entry in the company’s Shareholders Registry Book.
Its By-Laws can be changed at any time, as well as any powers of attorney existing for the company, by means of a Shareholders Meeting, which can be held with the presence of all the shareholders or with individuals appointed by a proxy issued by them.
It is possible to establish special features for the protection of minorities and their voting rights.
Their legal representatives (holding powers of attorney to act on behalf of the company) are liable for any actions taken against the interest of the company and/or its shareholders.
They must have three corporate books (shareholders meetings, shareholders registry book and board of directors meeting book) and three accounting books. These books must be authorized by the local tax authorities and are a requirement for implementing any change in the company’s By-Laws or in its power of attorney structure since no shareholders meeting can be held without being recorded in the specific book authorized for such purposes.
Companies in Costa Rica must additionally register before the Tax Authorities. In the event the company is not involved in business activities in the country for the specific fiscal year (for example, when it is solely used for holding assets), formal tax registration is not required (only book authorization) although a fiscal year end declaration is always needed (though it will state that no economical activity existed during the period) in order to avoid the application of penalties.
The normal fiscal year for companies declaring taxes in Costa Rica goes from October 1 to September 30 of each year; filings can usually be made until the end of December. A different fiscal year can be authorized for companies that are fully owned or related to foreign entities that have a different term in their countries of registration.
It is important to conclude that the choice of corporate structure must ideally be made at the time the investment or business project is being created. This decision will have a major impact and specific consequences on the implementation of said project and if taken wisely, it will be one of the foundations for its success.
Planning to Invest in Costa Rica
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, enquire 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.
Legalizing your Immigration status in the country
A step that due to recent polices you should not wait too long to take
Many foreign citizens living in Costa Rica with an irregular immigration status may have felt a real and immediate threat in the last few months: a considerable increase in actions by the Immigration Authorities against individuals staying illegally in the country has been detected, which, although mainly targeted to the large number of Nicaraguan irregular immigrants historically present in Costa Rica, has certainly affected Americans, Canadians and Europeans as well.
The above-mentioned measures are a follow-up to a policy established during the administration of ex-President Rodriguez for the massive deportation of illegal aliens. To that effect, the Immigration Authorities acquired buses to transport illegal immigrants (mainly Nicaraguan) to their country of origin and trained specific officers for the duty of investigating and deporting them. Nevertheless, once this policy was ready for operation, the process was stopped by a decree authorizing an immigration amnesty for Central American citizens.
By the end of the amnesty period the deportation process reinitiated. Immigration officers and policemen have gone to several areas of the country where a large number of illegal aliens live and many of them have been deported and taken to their countries of origin. Immigration Authorities also randomly visit companies that employ foreigners and other places frequented by them in order to detect and deport individuals with an irregular status. It must be clear that although these measures mainly affect Nicaraguans, they definitely apply and cover all foreign citizens staying illegally in Costa Rica, either because they entered the country illegally or because their tourist visas or residency permits have expired.
Under those premises, it is surprising how many foreigners living as investors or working as expatriates for multinational companies in Costa Rica do not legalize their immigration status and that of their dependents. In many cases, we consider that this happens mainly due to a lack of appropriate knowledge of the regulations and policies in force. In most cases, as stated above, these individuals face the uncertainty of an irregular situation which; if they would have been better informed, could have allowed them to become legitimate residents of the country: As we have also made clear, this situation may even result in being deported from the country, as well as spending the night in jail and/or not being permitted to re-enter after leaving for a few days.
A considerable number of the individuals forming the above mentioned groups assume that the country’s immigration “entanglement” will not permit them to obtain their residency because the procedures are very complicated and offer uncertain outcomes and that the requirements are impossible to be met. In such situations, it is important to make them aware of the existence of a fairly broad menu of possibilities of being covered by the law and that although the different regimes, procedures and requirements seem not to be aligned following a clear path, understanding them, together with qualified counsel, can make obtaining residency in Costa Rica a reachable goal.
Based on the above, we consider important to briefly refer to the different immigration regimes that might be applicable for the previously mentioned profiles.
General Requirements
When initiating residency procedures, it is important for the applicants to produce a series of documents which must meet several key formalities that will facilitate the progress of the applications; among them:
Birth Certificate, to be issued by the appropriate authorities at the place of birth.
Certificate of Clean Criminal Record, to be issued by the corresponding authority of the country where the applicant has lived during the last six months before his arrival to Costa Rica.
Marriage Certificate, to be issued by the country of registration of the marriage (if applicant’s spouse is to be included under the regime).
Physical presence in Costa Rica for fingerprinting (which generates a background check).
All documents originating abroad require authentication by the Costa Rican Consulate nearest to their place of issue and in the event they are not in Spanish, they must be officially translated in Costa Rica.
Resident Annuitant and Resident Pensioner Policies
These two policies allow a fast and positive outcome for residency applications based on (i) receiving a monthly income of no less than one thousand United States Dollars for at least five years, in a permanent, irrevocable and constant manner (in the case of the resident annuitant status) or (ii) receiving a life pension of no less than six hundred United States Dollars (in the case of the resident pensioner status), pension that we recommend to come from a government entity.
In both cases, the applicant’s spouse and children under eighteen years old can be covered in the regime.
Company Recognition Status
This policy permits companies established in the country and with an accounting net worth currently higher than approximately one hundred forty five thousand United States Dollars to be granted, after filing a series of corporate and legal documents, a specific authorization in the form of a recognition from the Immigration Authorities, permitting to obtain residencies for its foreign employees. Currently there is no limitation as to the number of non Costa Rican employees that could be covered by this regime by the company.
This residency will be linked directly to working for the applicant company (this residency allows staying in the country as long as the beneficiary works for said company only). This status allows coverage of the main applicant’s spouse and children under eighteen years old, who may study but not work while in the country.
Entrepreneur's Residency
This policy is applicable to financially sound people who wish to establish a business venture in Costa Rica. The business plan must be determined beforehand, and presented to the immigration authorities as part of the application.
The applicant must be able to prove that he or she will not be a burden to the country and that his or her enterprise (of which such individual shall be the holder of a full power of attorney) will produce enough revenue to support the applicant while residing in Costa Rica.
The applicant must incorporate his business according to Costa Rican law, and must prove that all necessary permits and authorizations for the business have been at least requested, if not already granted. The existence of actual business premises must be documented, and the financial feasibility or soundness of the business venture proven.
The residency status produced in this case does not permit the beneficiary to be hired as an employee, and he or she may only work as an administrator to his own business.
Temporary Work Permit
This regime allows the applicant to obtain the residency based on the existence of a labor contract.
The applicant must be able to prove that, he has been hired by a local company, attaching a copy of the labor contract and an application by the company.
Financially Sound Immigrant Residency
This status is applicable to financially sound foreign citizens who want to reside permanently in Costa Rica, but prefer to determine how their incomewill be generated only after they are established in the country.
The Immigration Council has ample discretion regarding this kind of application. Policies and procedures of this entity may change from time to time and its determination of what is a financially sound individual is subjective. Due to such fact, it is difficult for us to offer certainty as to the outcome of this kind of application, although adequate planning and analysis allows for a high rate of success.
As with other similar policies, it is imperative that the applicant proves that he or she will not be a burden to the country. Among the most accepted, the following constitute strong proof of income: real estate ownership in the country or abroad, revenue from rental of houses or business premises, bonds or securities and bank accounts with balances of at least US$100.000, and any other sources of income that could be duly documented.
An assessment of each case’s particular situation will permit to better support a decision on one of the above indicated options. The applicant’s awareness of the existing choices and his understanding of the broad range of existing alternatives certainly justify the regularization of a precarious immigration situation.We are currently using internet through dial-up telephone, which is slow; but we heard, that Direct TV will offer high-speed internet through their satellite TV services by end of this yearRevised: 02/17/06.
Single Family Homes for Sale (All-Inclusive)
with breathtaking views to the Golfo de Nicoya.
Ü 3 bedrooms - 3 bathrooms
Ü 2 car carport
Ü Size of the house: 315 m² - 3390 square foot under roof
Ü Size of the lot: 2000 m² (½ acre) titled land
200 m easy access to the beach
Ü Jacuzzi with natural- stone- waterfall into large pool
Ü large patio
Ü Kitchen with natural granite countertop & kitchen furniture in Guanacaste wood with bar
Kitchen has American size fridge with icemaker (double door), dishwasher, extractor, microwave, washing machine;
Ü all bedrooms with A/C and all rooms with fans
Ü Master bathroom comes with Jacuzzi, large shower & bidet.
Ü 29’’ TV – Telephone line – US security system installed
Ü Comes with all furniture you need – just bring your toothbrush!
Ü Full teak doors and furniture
Ü Windows and sliding glass doors in aluminium
(tinted glass; all with screens)
Ü landscaped garden
Ü The real tile roof enhances the Mediterranean style of the house
Ü The house is within the “Roma del Mar” project, a guarded community, offering several services such as maintenance, pool and garden service, rental service, house keeping, etc.
Ü Roma del Mar has a Marina and 5 beaches!
ROMA DEL MAR is a developing community in Playa Naranjo, Puntarenas, Costa Rica. It is great living! Residential properties providing the foundation for carefree, coastal living featuring single family homes and 1/2 Acre+ lots with views to the Golfo de Nicoya.
Is the Roma Del Mar development completed? ? No. So far we are offering the very first home sales that we have in this development. we are currently building only the second house Is the home being sold by the developer or by the owner? We are representing the project and are selling the homes for the owner.
What is the travel time from San Jose to Roma Del Mar? From the international airport San Jose to Puntarenas approx. 1.40 hour ; then a trip on the ferry to Playa Naranjo (1.15 hour); from the ferry terminal in Playa Naranjo to the Roma del Mar project 10 minutes drive.
Are their any beaches close to property and if so how far? The model home is within the Roma del Mar community which has 5 beaches; it is approx. 200 mts. from the house to the beach (5 Minutes walk)
Is their a recurring charge for the property and if so what are they (total cost) aka property management fees, club fees, security fees? We will charge approx. $50 per month for security, maintenance, etc.; electricity/ telephone depending bill of the house.
How close are you to a store where you can buy food? 25 min. drive to the next little town where you can shop for groceries etc; we are currently organising a delivery service for general groceries and fruits and vegetables once a week.
Are there going to be other homes in the area?
We are currently constructing the second home, and will start soon with the third house (in a few months another 2 houses); furthermore there is our home which is 5 Minutes away and close to our house there is another house which is already sold; so you find a nice little international community (with many American; we are German)What else is in that area? Any local eateries? There are some restaurants and little hotels close by, but everything still low key as this area is not one of the big tourism places down here in C.R. – just come and check it out yourself.
Is there Internet access there? Is it dial-up or broadband?
ABOUT COSTA RICA
Columbus called it the "Rich Coast" upon his discovery in 1502. Rich in beauty, rich in ecology and rich in flora and fauna with thousands of species of plants, animals, birds and insects that live in magnificent and sometimes mysterious tropical forests. Costa Rica's wealth of natural resources is so abundant that it even exports oxygen, an essential nutrient for a better, healthier and cleaner way of life.
Some call Costa Rica the "Switzerland of the Americas", others call it "Paradise on Earth". You can call it what you like but one visit to Costa Rica and the memory of it will be etched in your mind forever.
About the size of West Virginia, Costa Rica encompasses about 51,000 square kilometers of enchanting rainforests, majestic mountains, and countless virgin beaches among rocky bluffs, enclosed by numerous peninsulas and bays of unsurpassed scenic beauty. Its natural heritage form one of the world's most outstanding biological reserve and national park systems.
THE PEOPLE
The expression "Pura Vida," literally translated as "Pure Life," best describes the Costa Rican way of life. Ticos, as the locals commonly call themselves, are their country's greatest asset and are renowned for their friendliness. They are warm hearted, gracious, educated, entrepreneurial and ready to accept you into their country, their lives, and their homes. In addition, foreigners are usually pleasantly surprised to discover how many of their neighbors are also from foreign soil.
THE LANGUAGE
The official language of Costa Rica is Spanish, but a great many Costa Ricans speak English. Additionally, as Costa Rica continues to attract visitors from the United States, Canada, Europe and Asia, other languages such as French, German, Italian, Chinese and Dutch are becoming more and more prevalent.
THE CLIMATE
Costa Rica boasts about as many microclimates as could be found in any country in the world. Like it cool, very cool? Try high up in the mountains above the Central Valley. Hot and dry on the beach? Try the Guanacaste Gold Coast. Want to live in the rain forest? Like remote? Check out the Osa Peninsula. Whatever your preference, Costa Rica has something for everyone.
Some areas such as Grecia and Atenas, forty-five minutes from San José, claim the best climate in the world. In fact, the whole of Costa Rica boasts spring-like climate at least ten months out of the year. Temperatures in the Central Valley and the mountains average 68º degrees Fahrenheit (20º degrees Celsius) and in the lower coastal areas , about 79º degrees Fahrenheit ( 26º degrees Celsius). In the northern province of Guanacaste they say half the year is like living in Hawaii and the other, like living in Palm Springs, California.
THE CURRENCY
The national currency of Costa Rica is the Colon. U.S. dollars can be easily exchanged throughout the country at any bank, national or private, and also at most hotels and money exchange companies. In addition, nearly all hotels plus some restaurants and shops will accept U.S. dollars as payment. Canadian dollars may be exchanged at branches of Banco Nacional and other monetary currencies should be converted in San José at either Banco Central de Costa Rica or at a currency exchange house. Be certain to check daily exchange rates at local banks, currency houses or in the local newspaper as it changes continually.
BANKING
The banking system in Costa Rica is very modern and offers all local and international services. This includes issuing credit and debit cards, loans and both personalized and computerized banking. Automatic Teller Machines (ATM's) are available throughout the country and will accept PLUS cards as well as local ATM cards. Visa credit card advances are easily obtained at most local banks.
COST OF LIVING
The cost of living is probably one of the most important issues concerning prospective full-time residents. Although the cost of living here is less than that of the United States, the difference is not dramatic. Housekeeping and gardening help is very affordable, as are other conveniences, which are often considered a luxury. On average, a monthly income between $1,500 to $2,500 with established accommodations will provide for quite a comfortable lifestyle.
TAXES
Out-of-country income is not taxed in Costa Rica, and if you are employed in this country, income tax is minimal. Basic property taxes are six-tenths of one percent of the property's stated value, which is nominal by North American standards.
HEALTH SERVICES
There are numerous quality hospitals operated by the National Social Security System located throughout the country. In addition, private healthcare is quite common and considered inexpensive. Privately operated hospitals offer highly educated physicians and personnel, excellent facilities and multidisciplinary Medical Corps catering to the needs of many foreign visitors who frequently take advantage of the better value and best professional medical care offered in Costa Rica. Cosmetic surgery plus dental and optical care are very affordable and are in particularly high demand.
EDUCATION
Costa Rica provides free education for its residents and boasts the highest literacy rate in Central America, rivaling even that of many larger and much wealthier industrialized nations. The right to primary education for both sexes was established in 1869 and has been declared obligatory. In addition to free public education, there are several high quality private institutions extending from the primary level up through the university. Although most of these institutions are located in and around San José, the rapid development of the Guanacaste Gold Coast area has begun to attract some of the private, higher quality schools to the region.
EMPLOYMENT
Employment opportunities are limited, as Costa Rica gives job priority to its residents and requires work visas for any foreign visitors who seek employment in this country.
RELIGION
Perhaps as much as 90% of the population practices Catholicism, the country's official religion. Other religious beliefs exist freely although and are protected by the Constitution as well.
GOVERNMENT
Costa Rica is a free and independent republic and its people have enjoyed a peaceful, democratic way of life since 1889. The military as a division of the Costa Rican government was abolished in 1948 and is now prohibited by the Costa Rican Constitution. The current leadership consists of three branches of government including the President, elected by popular vote for a period of four-years and exercising executive powers; the Congress, a single chambered legislature, whose members are also elected by popular vote for a four-year term; and the Supreme Court, acting as the judicial body of the nation. The Constitution guarantees and protects its people's right to life, freedom and basic civil liberties. The death sentence was abolished in 1882, which has provided an ideal environment for several prestigious international human rights organization who have established their headquarters here in Costa Rica.
The country enjoys a quiet co-existence with its neighbors aided in part by ex-president Dr. Oscar Arias, a Nobel Peace Prize winner, for his negotiating efforts throughout Central America. Perpetual Neutrality was proclaimed in Costa Rica in 1983.
CRIME
The biggest crime facing Costa Ricans is petty theft. Violent crime is nearly non-existent and virtually all crimes committed are in and around the larger cities.
COMMUNICATIONS
Costa Rica's communication network is among the very best in Central American. Postal, facsimile, telephone and cell phone services, as well as electronic mail (Internet), are readily available anywhere in the country.
TRANSPORTATION
Costa Rica now enjoys the convenience of three international airports. The largest and most frequently used, located about twenty-five minutes from San José, is the Juan Santamaria Airport. It is serviced by several major intercontinental airlines with direct flights between North and South America, Europe and Asia. The Tobias Bolaños International Airport in Pavas is much smaller and receives flights from the United States and Canada only. The new airport in Liberia, Daniel Oduber International, in the province of Guanacaste, began operations several years ago, receiving international flights from the United States, Canada and Europe, catering essentially to the tourist industry with mostly charter flights. A domestic network of internal airports also serves local travel needs with daily flights to popular tourist destinations and other parts of the country from any of the international airports. There are also several private airline companies that offer charter flights to anywhere in the country with a landing strip. Their equipment includes twin-engine aircraft, helicopters as well as other aircrafts.
BUS SERVICES
There exists an excellent network of ground transportation throughout the country serviced by private enterprises. Regularly scheduled trips between San José and all parts of the country are reliable and very economical. In addition, there are several bus companies that offer scheduled departures to Panama, Nicaragua and the rest of Central America at competitive rates. There are also several companies that offer micro-bus direct transportation to/from and between the airport and major tourist spots around the country for about $20 USD.
CAR RENTALS
There is an impressive choice of car rental companies to choose from in Costa Rica and this can be a fun way to see the country. It is a good idea to shop around for the best deals though. Costa Rica's highway system is very good and most areas are paved or have 2-WD passable dirt roads, as is the case in remote and rural areas. It is important to remember that some roads that may be drivable in the dry season can become impassable during the rainy reason and may require 4-WD. Renting a 4-WD though is not necessary if you plan on sticking to the major routes. There are a few tollbooths throughout the country, but the charge is minimal. Gas stations are plentiful and many are open 24 hours, although if you are heading into remote areas its a good idea to fill up when you can and there are no self-service gas stations in Costa Rica so sit back and enjoy the luxury. Other important tips to remember: pay the extra full coverage fee when renting a vehicle; if in doubt about road conditions - it's best not to try it; maps are not always up-to-date and may not reflect current existing road conditions. Do not be afraid to ask directions, the people in this country are extremely friendly and are always willing to steer you on the right track.
HOTELS
Costa Rica offers a wide variety of hotel, bed & breakfast, and other short and long-term accommodations catering to even those with the most discriminating needs. Whether you want to be in the city, at the beach or in the mountains the choices are endless. There are also many self-contained resorts offering a great range of amenities and activities from golf, tennis, fishing, diving, and surfing to casinos and day spa facilities. Whatever your preference, Costa Rica has it!
ACTIVITIES
The variety of recreational and cultural activities available in Costa Rica is unlimited. From sailing, beachcombing, snorkeling, diving, kayaking, water skiing, parasailing, fishing, and surfing at the beach to hiking and bird watching in the rainforests - the possibilities are infinite. If adventure is what you seek, you will find it here. You can raft down class III and IV white water rapids, swing through the trees with monkeys on a canopy tour, bungee jump over a raging river, experience world-class wind surfing on Lake Arenal or catch a spectacular volcanic firework display. Horseback tours to local waterfalls and hidden beaches are abundant throughout the country as well. Or if more relaxing is your style, spend a day golfing at any of the number of championship golf courses, pamper yourself at a local spa or just enjoy a dip in some of the volcanic hot springs.
If you're looking for a taste of the cultural experience, you can enjoy a theater show, visit historical sights and museums, catch a movie, or sample the wide variety of cuisines found in and around the capital, San José. For those who live outside the metropolitan area, climb in your car, hop on a bus, or catch a flight on SANSA or Travelair into the big city for a couple of days.
INVESTING IN COSTA RICA
Costa Rica is quickly becoming an international hot spot. As more and more people begin to discover the beauty and temptation of the "Pura Vida" lifestyle, the more they want to become a part of it.
"When choosing a country to invest in, we find Costa Rica is greatly attractive to investors and their families." says Ricardo Monge, director of the Costa Rican Investment and Trade Development Coalition (CINDE), a private, nonprofit organization. And the proof is in the numbers as several international companies have already chosen this country as a prime investment location.
U.S. based giant, Intel Corporation, recently invested $700 million into an assembly factory and testing plant, which began operations in 1998. Acer America opened a new customer service facility as a base to branch out to the rest of Latin America and Firestone is currently doubling the capacity of its tire factory for export to the United States and other Central America nations. In addition, Lucent Technologies has opened a corporate office in San José with plans for expansion. Other companies such as Baxter Healthcare, Conaire Corporation and Bali Company are just a few of the many new businesses to join this growing list.
"Costa Rica is at a historic turning point; if we do things right we will grow very rapidly," says Monge. "We are trying to apply logistics to gain private sector expansion in order to better our infrastructure. This is crucial to the development of our nation."
Costa Rica, the most politically stable country in Central America, has proven attractive to investors for its relatively open investment and trade policies. Laws governing private investments are the same for nationals and foreigners. In addition, there are virtually no controls on foreign exchange transactions conducted by commercial banks. The exchange rate is determined by the Banco Central of Costa Rica through open market operations, and has disposable funds guaranteed by the export-import Bank of the United States and other major international banking organizations.
Ranking number one as far as investments are concerned, tourism remains in a dynamic role as Costa Rica's number one industry. A remarkable improvement in tourism has been noted in the past five years - nearly a 58 percent increase. The visitor count last year of 792,287, as reported by the Costa Rican Tourist institute's (ICT) statistical department, consisted namely of U.S. citizens, followed by Canadians, Germans, Mexicans, Italians, Colombians, Guatemalans, British, Spanish, French and Chinese.
As a result, there has been a tremendous surge in development within Costa Rica's hotel sector mostly in the regions of Guanacaste and Puntarenas with a reported $711 million in investments to date. The total for tourism investment reported last year amounted to $759 million. Some of the major developments included the Allegro Resorts' Caribbean Village and the $33 million new Marriott Hotel in Jaco. At present there are numerous other hotel, resort and golf developments in the planning stages or under construction in the northwest Guanacaste region, where the ICT continues to promote development of the area.
To benefit the investment climate, the government supports free trade and international competition. Clearly, the most enticing factor for foreign investors has been the country's income tax laws, which allow complete exoneration of taxes on an average of 8 to 10 years, and 50 percent exoneration for 4 more years depending on the investment. There is virtually no screening of foreign investment in most areas .
The ICT recently signed a $10 million, 12-step program for tourism development. Last year, they launched a very aggressive international advertising campaign with the tag line "Costa Rica, No Artificial Ingredients," which focuses on the country's unsurpassed beauty, adventure and natural environment, of which one quarter is dedicated to national forests, parks and reserves, and which the country continues to protect. The ICT and a number of private organizations, such CINDE, have placed considerable emphasis on facilitating investments and streamlining government services. CINDE's U.S. office in New York aggressively promotes Costa Rica as an investment destination.
A big attraction for tourism-type investments is the current incentive law, which offers a 12-year income tax exemption on non-distributed profits, land tax exemption, and offers duty-free entry to yachts, sailboats and certain motor vehicles for use in tourist transportation. Additionally, Costa Rica has one of the strongest U.S. dollar reserves in Central America (nearly $1 billion). It also has advanced electric and technological industries and Free Zones continue to be one of the backbones of Costa Rica's export and investment promotion strategies, contributing significantly to local economic growth. Investment in the Free Zones totaled close to $500 million, mainly from U.S. businesses. Companies currently under the Free Zone Corporation have close to 100 percent exemption on raw materials for export on most products. Most of Costa Rica's export incentives have been undergoing reforms to serve the international tendencies, and are on a par with tourism development.
Costa Rica remains a member of the World Trade Organization and the Central America Common Market, and has investment treaties with Switzerland, Great Britain, France, Germany, the Netherlands and the Czech Republic. Another incentive for investors has been the free-trade agreement under the U.S. Caribbean Basin Initiative, which guarantees access to the U.S. markets for many products. Under its Free Market treaty with Mexico, over 8,000 products became tariff-free in 1995. It also has a free-trade agreement with Panama, and similar agreements are being negotiated with Colombia and Venezuela. Primary trade discussions have been held with Chile, the market they are currently strongly targeting. " Bringing in key players such as Intel gives Costa Rica a letter of recommendation. Soon, other electronic industry firms will follow." It is a prediction that already seems to be becoming a certainty.
So come to our little corner of paradise and let Roma del Mar help you make your dreams a reality!
Choosing a Corporate Structure to do Business and/or invest inReal Estate in Costa Rica
Many foreign individuals starting a business in Costa Rica or merely purchasing real estate for investment purposes decide to use a corporate entity as the owner of such. This decision is a very wise one, and it is what we highly recommend to our clients as the first choice to be followed.
Ownership through a corporation allows one to have flexibility and more predictability in areas ranging from estate planning (if share ownership is properly structured the investor can avoid his heirs a painful and lengthy long-distance probate procedure), tax management (as an example, rules on corporate expenses are more flexible than the ones on personal ones), and representation (shareholders meetings can facilitate granting special powers of attorney or other types of authorizations for many actions thus not requiring local presence in the country).
The first question often asked by our clients is whether to use (or form) a Costa Rican corporate entity or use one already existing and controlled by such individuals abroad. Our advice is, in most cases, the use of a local entity. Although foreign corporate entities can own land and engage in business activities in the country, registration procedures (both at the Public Register and with government entities) as well as negotiation of contracts with private parties can get complicated, delayed and/or find obstacles when they are involved.
In any event, if a foreign entity will be used, note should be taken that we normally recommend registering the foreign entity in the Costa Rican Commercial Register as a branch or at least to register specific powers of attorney for such also in the Costa Rican Commercial Register. Both cases require a special and formal procedure that may take several weeks.
As mentioned before, in the great majority of cases, the use of a local corporate entity is preferred. Although Costa Rican commercial law contemplates many types of corporate forms, only two of them offer the investor the comfort of having structures similar to the limited liability companies to which he or she may be used to in their countries of origin.
Such corporate forms are the “Sociedad de Responsabilidad Limitada” and the “Sociedad Anónima”. In both cases, shareholders are only responsible for their participation on the company’s social capital and their own personal assets are fully protected and out of reach from any potential creditor the company may have.
The “Sociedad de Responsabilidad Limitada”, also referred to as “S.R.L.”, “Limitada” or “Ltda”, is a simpler form than the “Sociedad Anónima” and in most cases fills-up the blanks on its legal treatment from the much broader regulation of the “Sociedad Anónima”. S.R.L.’s are usually used only if any of their special features are especially appealing to the investor.
The special features of the S.R.L. are mainly the following:
Shares cannot be transferred to non-shareholders without the previous express consent of the other shareholders, who have a right of first refusal to purchase them.
These companies require, for their administration, no more than one individual (Manager), thus this is an especially appealing structure for cases in which the investor does not want to use and register (making public) the names of additional individuals to form part of what in the S.A. would be called a Board of Directors, as explained below.
The “Sociedad Anónima”, also referred to as “S.A.”, is the most widely used corporate structure in Costa Rica. It is pretty flexible and its legal treatment is extensive. In general terms, it can have any type of social capital (usually a low amount is used without any negative consequence) divided in as many shares as the investor desires (normally structured in a way in which they can be divided in as much shareholders that can be previewed, since such shares are, by law, not divisible).
The S.A. has many features, of which the most important are:
Since the positions of President, Secretary and Treasurer are legally mandatory and must be occupied by three different individuals, it must have a Board of Directors of at least three members, as well as one Comptroller, who must not hold any powers of attorney on behalf of the company.
Shares are represented by physical documents and more than one of them can be included in a certificate. They can be transferred to any non-shareholder without the approval of the other shareholders. Transfer is made through a combination of a transfer contract, the endorsement of share certificate(s) and an entry in the company’s Shareholders Registry Book.
Its By-Laws can be changed at any time, as well as any powers of attorney existing for the company, by means of a Shareholders Meeting, which can be held with the presence of all the shareholders or with individuals appointed by a proxy issued by them.
It is possible to establish special features for the protection of minorities and their voting rights.
Their legal representatives (holding powers of attorney to act on behalf of the company) are liable for any actions taken against the interest of the company and/or its shareholders.
They must have three corporate books (shareholders meetings, shareholders registry book and board of directors meeting book) and three accounting books. These books must be authorized by the local tax authorities and are a requirement for implementing any change in the company’s By-Laws or in its power of attorney structure since no shareholders meeting can be held without being recorded in the specific book authorized for such purposes.
Companies in Costa Rica must additionally register before the Tax Authorities. In the event the company is not involved in business activities in the country for the specific fiscal year (for example, when it is solely used for holding assets), formal tax registration is not required (only book authorization) although a fiscal year end declaration is always needed (though it will state that no economical activity existed during the period) in order to avoid the application of penalties.
The normal fiscal year for companies declaring taxes in Costa Rica goes from October 1 to September 30 of each year; filings can usually be made until the end of December. A different fiscal year can be authorized for companies that are fully owned or related to foreign entities that have a different term in their countries of registration.
It is important to conclude that the choice of corporate structure must ideally be made at the time the investment or business project is being created. This decision will have a major impact and specific consequences on the implementation of said project and if taken wisely, it will be one of the foundations for its success.
Planning to Invest in Costa Rica
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, enquire 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.
Legalizing your Immigration status in the country
A step that due to recent polices you should not wait too long to take
Many foreign citizens living in Costa Rica with an irregular immigration status may have felt a real and immediate threat in the last few months: a considerable increase in actions by the Immigration Authorities against individuals staying illegally in the country has been detected, which, although mainly targeted to the large number of Nicaraguan irregular immigrants historically present in Costa Rica, has certainly affected Americans, Canadians and Europeans as well.
The above-mentioned measures are a follow-up to a policy established during the administration of ex-President Rodriguez for the massive deportation of illegal aliens. To that effect, the Immigration Authorities acquired buses to transport illegal immigrants (mainly Nicaraguan) to their country of origin and trained specific officers for the duty of investigating and deporting them. Nevertheless, once this policy was ready for operation, the process was stopped by a decree authorizing an immigration amnesty for Central American citizens.
By the end of the amnesty period the deportation process reinitiated. Immigration officers and policemen have gone to several areas of the country where a large number of illegal aliens live and many of them have been deported and taken to their countries of origin. Immigration Authorities also randomly visit companies that employ foreigners and other places frequented by them in order to detect and deport individuals with an irregular status. It must be clear that although these measures mainly affect Nicaraguans, they definitely apply and cover all foreign citizens staying illegally in Costa Rica, either because they entered the country illegally or because their tourist visas or residency permits have expired.
Under those premises, it is surprising how many foreigners living as investors or working as expatriates for multinational companies in Costa Rica do not legalize their immigration status and that of their dependents. In many cases, we consider that this happens mainly due to a lack of appropriate knowledge of the regulations and policies in force. In most cases, as stated above, these individuals face the uncertainty of an irregular situation which; if they would have been better informed, could have allowed them to become legitimate residents of the country: As we have also made clear, this situation may even result in being deported from the country, as well as spending the night in jail and/or not being permitted to re-enter after leaving for a few days.
A considerable number of the individuals forming the above mentioned groups assume that the country’s immigration “entanglement” will not permit them to obtain their residency because the procedures are very complicated and offer uncertain outcomes and that the requirements are impossible to be met. In such situations, it is important to make them aware of the existence of a fairly broad menu of possibilities of being covered by the law and that although the different regimes, procedures and requirements seem not to be aligned following a clear path, understanding them, together with qualified counsel, can make obtaining residency in Costa Rica a reachable goal.
Based on the above, we consider important to briefly refer to the different immigration regimes that might be applicable for the previously mentioned profiles.
General Requirements
When initiating residency procedures, it is important for the applicants to produce a series of documents which must meet several key formalities that will facilitate the progress of the applications; among them:
Birth Certificate, to be issued by the appropriate authorities at the place of birth.
Certificate of Clean Criminal Record, to be issued by the corresponding authority of the country where the applicant has lived during the last six months before his arrival to Costa Rica.
Marriage Certificate, to be issued by the country of registration of the marriage (if applicant’s spouse is to be included under the regime).
Physical presence in Costa Rica for fingerprinting (which generates a background check).
All documents originating abroad require authentication by the Costa Rican Consulate nearest to their place of issue and in the event they are not in Spanish, they must be officially translated in Costa Rica.
Resident Annuitant and Resident Pensioner Policies
These two policies allow a fast and positive outcome for residency applications based on (i) receiving a monthly income of no less than one thousand United States Dollars for at least five years, in a permanent, irrevocable and constant manner (in the case of the resident annuitant status) or (ii) receiving a life pension of no less than six hundred United States Dollars (in the case of the resident pensioner status), pension that we recommend to come from a government entity.
In both cases, the applicant’s spouse and children under eighteen years old can be covered in the regime.
Company Recognition Status
This policy permits companies established in the country and with an accounting net worth currently higher than approximately one hundred forty five thousand United States Dollars to be granted, after filing a series of corporate and legal documents, a specific authorization in the form of a recognition from the Immigration Authorities, permitting to obtain residencies for its foreign employees. Currently there is no limitation as to the number of non Costa Rican employees that could be covered by this regime by the company.
This residency will be linked directly to working for the applicant company (this residency allows staying in the country as long as the beneficiary works for said company only). This status allows coverage of the main applicant’s spouse and children under eighteen years old, who may study but not work while in the country.
Entrepreneur's Residency
This policy is applicable to financially sound people who wish to establish a business venture in Costa Rica. The business plan must be determined beforehand, and presented to the immigration authorities as part of the application.
The applicant must be able to prove that he or she will not be a burden to the country and that his or her enterprise (of which such individual shall be the holder of a full power of attorney) will produce enough revenue to support the applicant while residing in Costa Rica.
The applicant must incorporate his business according to Costa Rican law, and must prove that all necessary permits and authorizations for the business have been at least requested, if not already granted. The existence of actual business premises must be documented, and the financial feasibility or soundness of the business venture proven.
The residency status produced in this case does not permit the beneficiary to be hired as an employee, and he or she may only work as an administrator to his own business.
Temporary Work Permit
This regime allows the applicant to obtain the residency based on the existence of a labor contract.
The applicant must be able to prove that, he has been hired by a local company, attaching a copy of the labor contract and an application by the company.
Financially Sound Immigrant Residency
This status is applicable to financially sound foreign citizens who want to reside permanently in Costa Rica, but prefer to determine how their incomewill be generated only after they are established in the country.
The Immigration Council has ample discretion regarding this kind of application. Policies and procedures of this entity may change from time to time and its determination of what is a financially sound individual is subjective. Due to such fact, it is difficult for us to offer certainty as to the outcome of this kind of application, although adequate planning and analysis allows for a high rate of success.
As with other similar policies, it is imperative that the applicant proves that he or she will not be a burden to the country. Among the most accepted, the following constitute strong proof of income: real estate ownership in the country or abroad, revenue from rental of houses or business premises, bonds or securities and bank accounts with balances of at least US$100.000, and any other sources of income that could be duly documented.
An assessment of each case’s particular situation will permit to better support a decision on one of the above indicated options. The applicant’s awareness of the existing choices and his understanding of the broad range of existing alternatives certainly justify the regularization of a precarious immigration situation.We are currently using internet through dial-up telephone, which is slow; but we heard, that Direct TV will offer high-speed internet through their satellite TV services by end of this yearRevised: 02/17/06.
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