Costa Rica Real Estate Guide

After long, intensive research, the fourth edition of the “Costa Rica Investment and Real Estate Guide” is now available in print and also as an e-book.

All relevant data on the economy, finance and banking, public services, health and education as well as new legal regulations in free trade zones have been updated and are listed in detail in the guide.
The extensive chapter “Contact addresses” is for the first time complete with e-mail and website links.

In addition, the standard work explains the current effects in the telecommunications and insurance sectors following the opening of the monopolies in Costa Rica.
Background information on the change of government in 2014 as well as an analysis of current economic developments make this book an ideal companion for all those who want to emigrate to Costa Rica, already live in Costa Rica or/and want to invest or start a business here.

Live comfortably and invest profitably between the Caribbean and the Pacific.

A handbook with comprehensive information on the quality of life, buying real estate and business opportunities in Costa Rica.

This handbook is aimed at people who want to live in Costa Rica, are looking for a suitable property to live in or want to set up a company in this tax haven.

Specifically, for the first time in German, you will find the current immigration, import and customs regulations, a detailed economic country profile that deals with the current political situation, and of course everything you need to know about the country, its people and living conditions. The investment and real estate guide with many valuable practical tips is a loyal and indispensable companion for both project planning and on-site implementation.

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From the contents, part 1: Country and people

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From the contents, Part 2: General living conditions

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From the contents, part 3: Real estate market

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From the contents, Part 4: Business and investment conditions

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From the content, part 5: Founding a company in Costa Rica

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From the contents, part 6: Contact addresses

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From the contents, part 7: Conversion tables

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From the contents, part 8: Spanish economic terms

• Spanish business terms from A-Z

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Reading samples

Excerpt from part 4: Reading sample

Terms and conditions of business and investment

1. the investment conditions in Costa Rica in international comparison:

Overall, Costa Rica offers a healthy investment climate due to its political and economic stability as well as its well-educated workforce. In the World Economic Forum’s Growth Competitiveness Index, Costa Rica was ranked 50th out of 104 countries in 2004, putting it in third place in Latin America after Chile and Mexico. There is a need for action to improve institutional performance, increase the efficiency of public administration and modernize state infrastructure. Corruption in Costa Rica is low by Latin American standards (only Chile has better figures), despite the corruption scandals involving former presidents that came to light at the end of 2004. Costa Rica also ranks among the top countries in Latin America in terms of legal certainty and other indicators. The regulation of property acquisition and property rights are appropriately defined. The depth of the financial system is in line with the regional average. The supervisory system is effective and already largely compliant with Basel.

For many Germans, Latin America, and Costa Rica in particular, is still a long way off for a financial commitment. Many of these countries are still popularly regarded as “banana republics” and are symbols of political and economic chaos. “But those days are long gone”!

The Mercosur countries and important markets such as Mexico are now characterized by democratic structures, as is Costa Rica, which deserve confidence in lasting political and economic stability. German investors may object that corruption in Latin American countries is still unbearably high. However, anyone who accepts such arguments should perhaps seek their luck in Eastern Europe and will find that corruption is not a foreign concept there either. Although Russia, the Czech Republic and Hungary, for example, are geographically closer to Germany, Latin American countries offer more interesting markets with much more scope for economic activity than Eastern Europe.

Half a billion people live in Latin America today. They generate a gross domestic product that significantly exceeds that of China, India, Indonesia and Russia combined. In recent years, these countries have experienced a real rush of investors (USA 43%), triggered by the waves of privatization and free trade agreements that have affected numerous commercial and industrial companies in this region. Many governments also sold the state-owned mines and waterworks and opened up free competition in the electricity and telecommunications sectors. In Costa Rica, the privatization of the telecommunications, electricity and insurance sectors can be expected in the foreseeable future.

The fact that the Germans have been losing ground in Latin America since 1997 and underestimating the market is now benefiting international and above all US investors.

Inflation rates…

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Excerpt from Part 3: Chapter 1, Real Estate Market

Acquisition of land and property

The purchase of a property should always be preceded by careful research into the relevant title. Only those aspects of a title deed (such as mortgages or usufructuary rights) that are registered at the time of purchase are subsequently effective for the buyer. For this reason, title insurance is not necessary. Real estate consultants who are members of the Camara Costarricense de Corredores de Bienes Raíces (CCCBR) also offer you additional security and are liable to prosecution if they do not adhere to the usual market prices, fees and charges, although the mortgage (brokerage commission) can increase to 13%, although this is rarely enforced in practice.

Tip: You should be particularly careful when buying real estate or building houses away from conurbations. Many foreigners purchase agricultural land without realizing that it is not intended for the construction of single-family homes. If an entry in the Registro Nacional reads “NATURALEZA PARA USO AGRICOLA”, immediately refrain from making a purchase unless you wish to farm exclusively. Properties labeled “NATURALEZA TERRENO PARA CONSTRUIR” also have a market value several times higher than agricultural land.

Transfer of ownership

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Excerpt from Part 5: Chapter 3, The Sociedad Anónima

Characteristics and formation procedureArticles of association

The Código de Comercio stipulates that a public limited company must be founded by at least two shareholders, each of whom must subscribe to at least one share certificate. The two company founders can also be foreigners. The articles of association (escritura) of a public limited company must be signed by the founders and certified by an official notary.

In addition, the articles of association must contain the following information:

• Date and place of incorporation
• Names, citizenship, profession, marital status and place of residence of the founding members
• Type of company to be founded
• Corporate purpose
• Duration of the merger and extension options
• Amount of the subscribed share capital and form of subscription
• capital to be paid in by the shareholders in cash, real estate or in another form
• Registered office of the company
• Powers of the shareholders
• Names of the managing directors
• Attribution of profits and losses
• Dissolution of the company and liquidation proceedings

Under Costa Rican law, the articles of incorporation must also contain the amount of paid-in capital, the number, nominal value and categories of shares and the payment procedure for the capital shares. The nominal value in Costa Rican currency specified in the Articles of Association must be stated on the shares. The issue of ordinary shares with no par value and bearer shares is prohibited by law. Registered shares are entered in a private register of the company and can be transferred at any time by assignment. A restriction on the transfer options can be agreed in the articles of association, e.g. “with the prior consent of the Management Board”.

Entry in the commercial register

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Extract from Part 2: Banks, payment transactions and foreign exchange regulations

Opening a current account as a legal entity (example Banco de Costa Rica):

The following documents are required:

• Original and copy of the Cédula Jurídica
• Original and copy of the certificate of incorporation (articles of association) and certified commercial register entry from the Registro Nacional.
• Original and copy of the managing partner (PersoneríaJurídica), which must not be older than one month.
• List of legal entities (partners, managing directors, etc.).
• Specimen signatures of the authorized signatories.
• A notarized letter from the board of directors should be available if the incorporation agreement does not expressly prohibit the opening of current accounts abroad (outside C.R.); this letter should authorize the company representative to open the account.
• Original and photocopy of the bank deposit made: Minimum deposit in Colones: CRC 50,000, minimum deposit in US$ 500.00
• Notarized document from the Ministerio de Hacienda “DirecciónGeneral de Tributación” (Tax Administration).

Only persons with proven power of attorney (Personería Jurídica) are authorized to sign on accounts. In addition, some special provisions apply to organizations, housing developments, trade unions and cooperatives.

The numerous private banks work somewhat more efficiently. However, these are also bound by government regulations that must be complied with. In practice, however, you should also have an account with a state bank. The associated convenience, e.g. for domestic payment transfers and a nationwide branch network, should not be underestimated.

Bank interest

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Excerpt from Part 3: Tourism projects

Investment in tourism

Costa Rica has been marketed as a tourist destination since 1930, but has only experienced a real boom in recent years. Costa Rica is now one of the world’s leading nature and eco-tourism destinations with an annual growth rate of 6.6% in this sector. The government program initiated in 2005 (Programa de Certificación para la Sostenibilidad Turística (CSJ)) is also a positive sign. The ICT (Instituto costarricense de Turísmo) is marketing the country more and more successfully every year in Europe as a land of natural beauty, beaches, volcanoes, climate, people, culture, ecology and peace.

Foreign exchange earnings in this sector amounted to at least US$ 1.589 billion in 2005 and the demand for hotel beds is growing by 4.5% per year. 85,000 jobs are directly linked to tourism and 400,000 indirectly. Four Seasons, Intercontinental, Marriott, Holiday Inn, Best Western, Barceló, Sol Meliá, to name just a few, have long since established themselves in Costa Rica, 181 new tourism projects are in the planning phase and 1,063 are registered with the ICT (Instituto Costarricense de Turísmo). 63.6% of tourists stay in Costa Rica for an average of 4-12 days. (as of 2004)

• On average, between US$ 500,000 and US$ 3 million is invested in medium-sized hotel projects (excluding large luxury hotels and marinas).
• The number of foreign visitors has almost doubled since 1998 compared to 2005.
• The Plan Nacional de Turismo (2002-2012) anticipates 2.5 million tourists per year by 2012 and an additional 49,000 hotel rooms required (32,000 as of 2005).
• Revenues in the tourism sector already account for 8% of total gross domestic product (Producto Interno Bruto GDP).

Which recommendations bring tourists to Costa Rica

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