Costa Rica Real Estate and Visa

Non-Resident Corporations in Costa Rica

admin — Wed, 01 Jun 2011 02:01:45 +0000

It is perfectly viable to constitute corporations, organizations of limited responsibility for non-resident foreigners of Costa Rica. Our Political Constitution and the civil and commercial laws grant the same rights and obligations as non-residents or nationals.In this way it is possible to constitute a corporation via a power of attorney letter without it being necessary to visit Costa Rica.
Whether it be for personal matters or whether you want to create a corporation in Costa Rica, our legal firm recommends to our clients that with this power, the cost of a plane ticket, housing, etc. can be avoided.
In this way our legal and administrative department will take charge over all the processes that are involved in the creation of a corporation in Costa Rica, such as constitution of the company, registration in the Tax Administration, obtainment of patents, opening of checking accounts, etc.
Not infrequently, our assistence has even included real estate services for the obtainment of a commercial space, warehouse or office for the company.
So being a resident or non-resident of Costa Rica, you should keep in mind that our legislation protects and offers equal rights to conduct commercial activities in Costa Rica, by means of the use of a company. Remember that it is legally possible to constitute a company in Costa Rica without visiting us.

Civil Responsibility in Collisions in Costa Rica

admin — Wed, 01 Jun 2011 01:55:22 +0000

The Importance of Transferring Automobiles
In Article 7 of the Transit Law, we find that in all transit-related acts, the registered owner will be the responsible civil party of consequences derived from the use, manipulation, possession or holding of the vehicle, even when he is not the driver of the vehicle and the responsible of the act will not be identified by the transit process; unless the registered owner can demonstrate having sold the automobile, not being effective the bill of sale that is usually used from day to day.
So we can note here, that by loaning the vehicle the owner assumes the risk, the owner of the autmobile assumes civil responsibility, (understanding as “owner” he who appears as the owner in the Public Registry) thereby if as the result of a collision, there is damage, this damage can be charged to the owner of the vehicle and can impose a lien against his property, whether it be a salary, his house, other automobiles, etc. From the point of view of criminal law, he can’t be prosecuted, however civilly, it can cause him serious economic damage.

Financing services for Costa Rican Real Estate

admin — Sun, 23 Aug 2009 03:55:26 +0000

Real estate financing has become a new trend at the Costa Rican Real Estate sales circles. This term financing did not exist before. Just in matter of 10 years the tide has turned and more people are coming to buy the parcel of lands of the beaches of Costa Rica. Even the financial institutions that are US based are making loans on Costa Rica’s Real Estate and some other countries. The purpose of this article is to discuss the loans available for non-residents and ex-pat residents of Costa Rica. Here in this article financing programs will only by touched but will be educating the regular Real Estate buyers.Private mortgage brokers or Banking institutions are playing a major part in lending the finances for Real Estate in Costa Rica. Loans are available for many purposes, from private residences to rental property, from vacation homes for investment purposes to refinance monies to pay off personal debts. Every lending institution has its own terms for lending the finances. They all may have different terms applicable for interest rate, closing cost, term, rate speed and other numerous time tables and fees.
Let’s have a look at some of the financing plans that are provided to the resident buyers. These are as follows:
US dollars are only accepted for the private mortgages that are provided to the residents and non-residents. For personal residence, financing can be made up to 85% of the purchase price and for rental properties the percentage is 70%. The above rates are applicable for residents of Costa Rica only. For the non-residents, this rate is 70% for the personal residence whereas 60% for the second homes or rental properties. Duration of the loan term can go up to 30 years for residents of Costa Rica and 25 years for non-residents. The rates of interests are reviewed quarterly and are adjusted in accordance with the prime rate that is LIBOR index or New York prime rate.
If you planning to purchase an already existing home then you will be eligible for the following options:
1. 8.75% adjustable with a front end fee of 3.50% of the loan amount.
2. 9.00% fixed with a front end fee of 3.50% of the loan.
The fixed mortgage rate can change after the complete of their term based on the prime rate that is LIBOR index or New York prime rate whereas, the rate for adjustable mortgages can be modified quarterly based on LIBOR or New York prime rate. The rate will increase by 0.25% if your borrowing is more than $200,000.
IRA funds are another way of purchasing real estate that can be invested directly in land or home. You will have to adhere to the rules and regulations made by the US internal Revenue Service. Else, your financing procedure may be considered as illegal. The IRS approved companies are considered as administrator or the trustee of your finances so it has to be in accordance to the rules. Therefore, making it is a point that you only work with a company that has the permission to administer self-directed IRA accounts.
Developer financing programs are designed to achieve more than one objective and thus they are designed in a different manner. This gives more flexibility to the client as there will be no rejection from the developer and developer itself acts as a bank.
The Escrow services and good trust services are available for financial investment in the Costa Rican real estate property. A potential buyer should understand the need for a good accountant. A good accountant will always come up with the solutions for your financing issues such as verifying bank deposits, making financial statements etc. Costa Rica is seeing more buyers and the financing have become easier in the past 10 years. Hopefully in coming time it will go even better than now and you will be able to invest in the most famous Costa Rican Real Estate.

Essential to Find and Hire a lawyer at Costa Rica

admin — Sun, 05 Jul 2009 03:44:53 +0000

Attorney is of the utmost importance when anyone comes to Costa Rica to stay and live. If you plan to do a business, buy some real estate units or get a cell phone connection, the documents you require for such works can only be provided by an attorney. It can even take more than one attorney to provide services to you for work like selling or buying real estate and getting your residency. The reason behind getting an attorney is that it will be able to translate legal documents also it can explain the way law work here. In a Latin country Napoleonic legal system prevails. One thing is for sure is that you will need attorney for almost everything. You will need it for the things which you never thought would need an attorney in your home country. Without attorney you will not be able to make your way through the legal system here.
If you want to hire an attorney, than you must be a fluent Spanish speaker. But if you are not a bilingual, then choose an attorney who could speak both Spanish and English or your native language. Communication is the most important part as you will have to discuss things like formalities, documents and so much more with your attorney.
Sometimes, you might have to keep a regular check on the attorney. It is important as to make sure that he/she does the things that he/she has told you that he will take care of in time. Attorney here is not necessary to work always with same ethics like they do in your native land. A regular check is inevitable else, you may find yourself into problems. Another thing is, never assume what he claims he is doing that. You should always ask for the work that he/she tells has been done. Due to the general rule, the paperwork moves slow here, so your attorney should not be contributing to delays.
Choosing an attorney for you require a little effort from your side. While choosing an attorney for your work, you should always make sure that whenever you try to access him he is available most of the times. You need to take of care some points when you choose an attorney for you. Keep the attorney’s office and residence number, so that in case of emergency he could be accessed by you easily. If you try to reach your attorney but failing in that this shows the carelessness of your attorney. This is also a sign of his unprofessionalism. This also means that it’s high time to find some one else as an attorney for you. Attorneys might have specialized in some specific niche. It will be good to choose an attorney who specializes in the area where you want your legal work to be done.
While finding a good attorney you may ask your relatives, retirees, friends and other knowledgeable person. They can be of great help when you yourself don’t have any idea about a good attorney as even if they also don’t know, they can always recommend you the name of someone who has knowledge of attorneys. There are a huge lot of available candidates for choosing your attorney from. You may also contact your embassy and inquire about the recommended attorney. You may gain knowledge about his reputation, integrity and his ways of working. As there are a huge lot of attorneys, no wonder you will encounter many attorneys which will be dishonest and incapable. So rather than wasting your time and money at someone who doesn’t have knowledge or is incapable, it will be better for you to look around and choose the appropriate attorney after knowing about his reputation. Attorney will become an integral part of your life making it important for you to build a good working relationship. Some of you might have this pre-conceived notion that more the expensive, better will be its quality. You will find attorneys charging from you $50 to $200 per hour, but do not choose an attorney on the basis of his fees as expensive not always mean quality.
At Costa Rica it is very usual to hire attorneys for your legal work. The Costa Rican version of Bar Association will answer your queries about the legal fees. You can always seek the help of this organization for the matter of legal fees. They will tell you about the minimum legal fees for the transactions based on cost. Taking an example of the immigration services, their fees per person is typically $1000 and what attorney charges is the percentage of that. Bar Association provides you these costs. Your attorney can act on your behalf when you are unavailable or out of country due to any reason. You can do some paperwork which will give your attorney the power of attorney to do your legal affairs when you are not available.
There are two types of attorneys.
First is, General Power of attorney and second is the Special Power attorney.
General Power of attorney enables him to deal with all your personal or legal needs whereas Special Power of attorney is specially done for a particular act like purchasing property units or signing a mortgage document. It is advisable that you should do this thing only when you have complete faith and trust as you are giving him/her the power to act on your behalf thus requiring absolute trust. The attorney should be very trustworthy when dealing with such situations.

Costa Rican Social Security Administration and Companies

admin — Wed, 10 Jun 2009 22:45:55 +0000

More than a few times we have been asked question related to the social security charges that a company operating in Costa Rica must pay. There are minimal or basic charges that can be resumed as: social security and insurance for work hazards.
Here I have a small list of the social security charges that an employer must cover:

Reduction for Sickness and Maternity 9.25%Invalidity,
Old Age and Death 4.75%
FOP, Obligatory Pension Fund 0.25%
INA 1.5%
Work Training Fund 3%
Complementary Pension Fund 0.5%
INS 1%
People’s Bank 0.5%
Family Assistance 5%
IMAS 0.5%
For a percentage total of 26% of the accrued salary.

Every employer in Costa Rica must be registered as such in the CCSS and present itself and pay monthly. It also must report every change of status of the worker whether it be incapacity, termination, etc.

Real Estate Investment Opportunities in Costa Rica

admin — Tue, 26 May 2009 22:09:00 +0000

Investing in real estate has become more than a financial feat for most investors in Costa Rica. It also evolved to provide personal gratification for investors who have always desired to own a property where they can live in nature’s serenity.
This of course, depends on what investors perceive to be a sound investment. Realtors reason that investing in real estate properties in Costa Rica provides more benefits than investing even in developed countries such as the United States where the prices of properties indefinitely fluctuate.
The real estate property market in Costa Rica has shown to manifest a far better scenario. In the last decade, it is almost unheard of that property prices go down. It has been observed that prices rise steadily at an annual rate of ten percent in the least. An unchanged market price is worse to befall on the market during hard times. In the Pacific coastline areas alone, prices of properties have ascended to about three times its price in the last five to eight years.
Making a long-term property investment requires careful study your options. The initial step entails identifying what you want to invest in, may it be a private home, or a commercial property. Also identify your desired rate for your investment returns. If you want a more speedy return on your investment, putting up a more dynamic establishment such as resorts and rentals will be more appropriate. Details such as these must be set from the proposal of your property purchase, down to the planning of your investment.
Commercial investments in Costa Rica must be administered with proper management expertise. A number of foreign investors in Costa Rica built partnerships with firms from the United States, Europe and Canada in developing profitable ventures, and employing efficient management to look after their businesses. Proper management is important as foreigners do not enjoy local financing options. Banks in Costa Rica remain conventional in restricting loan offers to foreign investors. The trend for foreign investors is to purchase a property through a present mortgage, the payments for which they assume at agreed rates.
However, foreigners who are legal residents of Costa Rica are qualified to apply for loans on properties given that they are able to provide the necessary financial and personal identification documents. At present, local banks subject loans with high interest rates when compared to the benchmarks of US financing. This is exactly why realtors and agents strongly recommend doing all investment transactions with the presence and guidance of a legal counsel at all times.

Purchasing Properties along the Coasts of Costa Rica

admin — Tue, 26 May 2009 22:07:23 +0000

Costa Rica beach properties
For most foreign investors, the most promising properties in Costa Rica are those along the coastline. These properties have feasible investment features as residential or/and commercial estates. The tropical milieu of beachfront properties that line the country’s Pacific side has drawn foreigners who long to get away from the noise of the city.
Before making any purchase, it is important for investors to know that Coastal properties in Costa Rica are administered by the local government following a different set of policies from that observed in the purchase of non-beachfront areas. This set is considerably more intricate and stern as the government is concerned about maintaining the upkeep of its seas and maritime habitat.
Costa Rica’s coastal areas are divided accordingly. The zone along the initial two hundred meters from the seaboard to the high tide point is what they refer to as the Maritime Zone. The area within the first fifty meters of this zone is for public use. The government maintains a strict supervision of this area. The succeeding are composed of about a one hundred fifty meter stretch of land is called the Concession property. This area is open for public leasing, even for foreign investors.
All transactions regarding concession areas must be made in the municipal office that corresponds to the location of the area of interest. The municipality offices govern the zoning and building policies of coastal areas, in cooperation with government agencies such as the national Tourist Board and the Ministry of Public Works and Transportation.
Most of the coastal areas in Costa Rica are affected by the Maritime and Concession divisions. It is estimated that about ninety five percent of the total beachfront properties are governed by this law. The five percent is owned by old Costa Rican families, whose ownership date back to the country’s Hispanic occupation period. These properties are supported by legal titles that real estate policies cannot meddle with. And in case of purchase of any of these privileged areas, prices are definitely soaring.
The purchase of coastal areas by foreigners is at some level being kept in check. For example, foreign investors that are non-residents of Costa Rica are limited to own up to forty nine percent of beachfront areas. The remaining is intended for the tenure of Costa Rican citizens, permanent residents and local corporations.

Price Trend of Properties in Costa Rica

admin — Tue, 26 May 2009 22:05:24 +0000

Realtors explain that the prices of real estate properties in Costa Rica have remained a standstill in the last years. Early in the 1990s, Costa Rica has suffered from economic recession, which has seriously affected its property market. The country’s real property market picked up in the turn of the century with the help of foreign investors who finally noticed its potential in developing luxury real estate and commercial properties.
The current price trend of Costa Rica’s real estate properties call for aggressive investors to step up in the competition and take advantage of the opportunity to purchase properties at competitive prices. In the late 1990s, the market for commercial properties in Costa Rica began to improve, as attested by long-term local realtors and brokers.
The investment potential of Costa Rica is even more boosted by the government’s active promotion of its tourism. The annual influx of visitors to enjoy the country’s beaches and scenic landmarks also significantly contributed in the recovery of its economy. The country’s tourism sector developed a renewed marketing strategy to gain the support of private investors. They began endorsing more hotels and resorts with the construction of a contemporary international airport north of Guanacaste in Liberia. This proved to accommodate more travellers everyday, including those bound for Costa Rica. True enough, the airline traffic following the commencement of the new airport’s operations was considerably increased. After a private survey, it was found out that the bulk of boosted aircraft market, both for commercial and chartered flights, had prior reservations with high-class hotels and resorts in Costa Rica. These turnouts were composed mostly of tourists mostly from North America and Europe. Also notable is the increased number of foreigners who have relocated in Costa Rica with eager contributions to its property and business investments.
The reemergence of foreign investors in Costa Rica pushed for the heightened prices of residential and commercial properties in the country. Compared to the market price of first-class properties during the late 1990s when Costa Rica’s economy picked up from its downfall, the existing price competition has amplified dramatically in less than ten years. The values of numerous properties have multiplied up to three times its purchase value. Beach front property prices have escalated, from the $160,000 worth of one acre of coast line property that is priced up to &800,000. The increase in price is also based on the location of the property. Houses and condominiums that are along or near the beach are now usually priced at $35,000 as the base. Coastal properties in Playa Grande can be purchased at $45,000 in the 1990s. Today, areas in this region are at the price range not lower than $140,000.
The properties in along the Pacific coastline, in the region of Central Valley are admittedly the most saleable among Costa Rica’s assets. This area encompasses an estimate of five percent of Costa Rica’s total land mass. Central Valley is the hub of the country’s populace with Escazu, Heredia, San Jose and Alajuela as its popular urban zones. Investments in this area are consequently expected to have the fastest turnover since most businesses are concentrated in Central Valley.
The real estate property market has evidently been dominated by the international community. This is also one of the major reasons why property prices in Costa Rica hardly go down.
However, many realtors insist that there are a lot of reasonable deals that could still be cut even on all in the rage properties, especially during public auctions conducted by the government. It only takes a keen eye and ears to be updated of these events as announced in local publications.
There remain areas in Costa Rica that have yet to be prevailed by foreign and private investments. While these are usually along remote areas, specifically those found north of the Osa Peninsula towards the south of Costa Rica, these properties offer a charming view and a amicable landscape for cabins, houses and resorts. Realtors explain that the prices of properties become cheaper as you move away from the city, in this case, away from the country’s metropolitan center in Central Valley.
Investing in the southern regions of Costa Rica offers unqiue benefits. Properties in this region enjoy free basic utilities such as electricity and water. Clean and potable water runs through the Osa Peninsula from the numerous springs surrounding the land area. Nevertheless, the prices of properties in this southern region are threatened by a rapid increase with many investors pronouncing their interest.

Investment Benefits in Costa Rica

admin — Tue, 26 May 2009 22:02:56 +0000

Costa Rica offers the same property rights to its citizens and to foreigners.
The Costa Rican government welcomes foreign investors by minimizing its restrictions on land and property ownership.
Purchase transactions in acquiring a property in Costa Rica are virtually hassle-free. Payment schemes are well-designed and defined. This was made imperative by the government and realtors to further attract foreign clients to their property market.
Costa Rica exudes a peaceful environment, making it idyllic for long term investments on real estate.
Costa Rica shows a competent economy that is enough to draw foreign investors in venturing into other trades. The government imposes an open investment policy to cater to a wider variety of businesses.
Costa Rica maintains an unruffled political climate. It is recognized as one of the most stable countries in Latin America.

Credit Crisis & Costa Rica Real Estate Market

admin — Tue, 26 May 2009 02:05:07 +0000

At present, it’s not a secret anymore that the global credit crisis seems to greatly affect the emerging Costa Rica real estate market with numerous development programs being put on hold. There are numbers of large Costa Rican hotel projects, including Hyatt, Regent, Punta Cacique, Mandarin Oriental, and Saint Regis, that are financed by American banks. Unfortunately, the construction programs of many of these large projects are hanged in the balance at present, depending on bank stability and market recuperation. The overall construction of the lavish and high end $800 million Cacique Hotel was to be completed in the beginning of the next year, but the Hotel project, including a spa, two boutique hotels, a tennis facility that has been designed by Steffi Graf and Andre Agassi, a wide array of high profile home sites, is unlikely to be launched until the beginning of the 2010.

For your kind information, the incomplete Cacique Hotel is located at the Northern Pacific Coast and the hotel has been spearheaded by Steve Case, a renowned founder of AOL. It’s also a huge blow for Graf and Agassi who recently entered into the real estate industry and are now finding it hard to get their things done in time. In the beginning of this year, they pulled out of one among the Idaho’s luxury hotel resorts that is undergoing economical crisis. Jorge Cornick, an active member of Cacique project, states, “In the existing environment, it is worth not to continue construction”. “However, we will surely continue the project soon after the current market rears back to its initial position”, he added. Similar is the case with the Regent Hotel project in Guanacaste and St Regis Hotel in central coast. They are also finding it hard to precede their projects because of financial concerns.

According to Blaine Kirchert, Regent Hotel Developer, “We are taking a break for a while, waiting the time when it’ll be quite safer to deal with economy”. It was Lehman Brothers, a recently collapsed U.S. bank, which was financing the St Regis project. Gabriela Tijerino, Grupo Genesis marketing manager, said, “we decide to not continue the St. Regis project due to 2 major reasons, the huge increment in construction expenses, and an uncertain situation of the global real estate market”. Mandarin Oriental Hotel also seems to experience the same difficulty of financial concern. Actually, this project was also being financed by not other than Lehman Brothers that has been filed for bankruptcy a couple of months earlier. Because of instability and financial worries, the overall project seems to be postponed or even completely cancelled. Moreover, there are also anxieties about who will be using these projects after the construction process is done. They are mostly Americans who usually choose to visit Costa Rica to enjoy holidays and vacations. And because of credit crisis, the fear of not being booked as many trips as necessary is turning out to become a serious matter of concern.