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My wife and I recently purchased a condo in Jaco Costa Rica (put in escrow), We hired a local attorney who took a check from us to begin the process of ownership. He later sent us an e-mail stating we should cancel the check since he was having some difficulty with it (currency conversion banking or whatever). We had a meeting with him since we are on a long stay very near Jaco.
During the meeting he told us that he could only accept cash for all transactions. Is this normal?
We have plenty of funds but very limited access to them since we do not have a bank account in Costa Rica; we cannot because we are still awaiting our residency applications. I we cannot continue paying cash for all transactions and we told him that. He said not to worry since establishing a corporation for our escrow account would enable us to open a bank account. In the dear reader’s opinion, is he correct or is this a warning sign?
In 2011, before we were residents, we were only able to open a bank account in CR under the corporation name that we used for purchase of our condo. The account also permitted “SINPE” transfers to other CR bank accounts to pay bills and provided for direct payment of water and electric bills. The account can also be used for personal banking (cash withdrawals, etc) in CR.
You should be able to wire transfer a large sum to that bank account to cover significant purchases in CR. It may take a few days to clear. But we could only do so when physically present at our bank in the USA. You can also deposit smaller amounts using a USA bank check – it does not have the fees associated with wire transfers, but it can take several weeks to clear and the maximum deposit is limited by the bank.
You do need to make sure you understand all of the ramifications of owning a home via a corporation – potential CR corporate taxes (void now, but likely to be re-enacted), FACTA reporting in the USA, having a CR “Will” to transfer CR property upon death, and possible loss of USA capital gains tax on increase in value of your home (when sold).
[quote=”redbeard52″]
You do need to make sure you understand all of the ramifications of owning a home via a corporation – potential CR corporate taxes (void now, but likely to be re-enacted), FACTA reporting in the USA, having a CR “Will” to transfer CR property upon death, and possible loss of USA capital gains tax on increase in value of your home (when sold).
[/quote]Not even to mention IRS reporting requirements!! You need to find this out immediately !!
Last year, many CR banks started charging $40 to process foreign checks.
Even though they clear my account within 48 hours of being deposited in CR … the CR banks will not give the intended recipient access to the funds for 3 to 4 weeks …
Remember, CR’s debt is denominated in foreign currency. It needs this money to “float” their debt quite badly. So, they are going to keep it … and use it … as long as they possibly can.
You need to realize … [B] You’re not in Kansas anymore![/B]
Sorry but any attorney who says he will only take cash would scare the cra*p out of me.
I personally would consider that as a HUGE warning sign and would not do business with him.
I am hoping that for each payment that you have already made to him that you have a written receipt for that payment which specifies exactly what professional services he is doing or has already done for you, yes?
Scott
Funny but I prefer to pay cash for the attorneys I work with… as I do with many transactions outside everyday minor expenses… and yes… they always give me a receipt. Cash is a private transaction, no middle man, no other parties with their hands in my pocket siphoning off fees or a percentage of the transaction as you have with bank involvement or credit cards. No big brother involved in the exchange with the ability to ask questions.
Cash is a straight forward transaction between two parties that have not yet fallen for the idea that cash is somehow an indicator of some type of dirty business. Big brother and the banks would love to go to a cashless society. It creates a mechanism of complete control and unlimited profits. Just imagine a society where government is a able to monitor every dime you spend…. and worse… a banking system that is able to take a small percentage of every transaction for the “convenience” of not having to use cash.
It’s bad enough we already have governments that tax you when you earn money… then when you invest it…. and ultimately when you spend it. Giving the banking complex the same ability is not something I’m interested in doing.
[quote=”Imxploring”]Funny but I prefer to pay cash for the attorneys I work with… as I do with many transactions outside everyday minor expenses… and yes… they always give me a receipt. Cash is a private transaction, no middle man, no other parties with their hands in my pocket siphoning off fees or a percentage of the transaction as you have with bank involvement or credit cards. No big brother involved in the exchange with the ability to ask questions.
Cash is a straight forward transaction between two parties that have not yet fallen for the idea that cash is somehow an indicator of some type of dirty business. Big brother and the banks would love to go to a cashless society. It creates a mechanism of complete control and unlimited profits. Just imagine a society where government is a able to monitor every dime you spend…. and worse… a banking systems that is able to take a small percentage of every transaction for the “convenience” of not having to use cash.
It’s bad enough we already have governments that tax you when you earn money… then when you invest it…. and ultimately when you spend it. Giving the banking complex the same ability is not something I’m interested in doing.[/quote]
I would agree with you Imxploring 100% with the vast majority of transactions and as you know like you, I am NOT remotely in favor of a one world currency, a cashless society or a one world government.
But, after spending 16 years here with two of my best friends as real estate attorneys and hearing what goes on with other ‘less scrupulous’ legal professionals within the SOPP industry (Stealing Other Peoples’ Property) in Costa Rica, I want as much written evidence of payment and services provided as possible.
I agree. Having trust in those you deal with in any transaction is the biggest issue. I’ve been very fortunate to have connected with top notch folks here in CR when doing business. A large part of that has to do with the information and referrals I have received from this very site. And for that Scott I thank you!
Ultimately it is one’s own responsibility to establish a trusting relationship with those in your life…. as well as in business.
Hi People, I’m glad to be a part of this forum and group. I may have worded my question a bit awkwardly since the responses have been in reference to various topics not directly related to my central question: I am concerned about an attorney I have retained to complete my purchase of an expensive condo. At first he said he would take a check. Then I got an e-mail from him to the effect that I should destroy the check due to problems with his using the check. We had a meeting and he said he only does business using cash for payments. We are talking about circa $1,000 down and another $6,000 upon completion of the transaction. I asked the forum if this sounded like a viable way to run a business. I am fortunate to have maneuvered my self into the status of a multimillionaire. I got several posts about my responsibility of selecting who I TRUST to do business with. My retort that is that I do not nor have I ever based my business transactions on trust. In my humble opinion only a fool does that. Many of those fools are broke.
I might add that I am all too often asked by other professional services to pay in cash, e.g. a Los Suenos Doctor’s office. OK, how long can one pay in cash? It depends on how much they have brought into the country. The limitation is $10.000. If that runs out, there is virtually no way to get money from the US to YOURSELF in Costa Rica unless you have a bank account here, and you cannot have that until you have a residency permit. It is a bureaucratic catch 22. My days of spending cash for large transactions are over folks. People I know and love have my TRUST. Business people or professionals have neither my trust nor CASH.
Welcome. As to the trust issue. Once you become more familiar with CR and the legal system you will find that trust becomes a much bigger issue in doing business and in making every effort in avoiding the courts in resolving issues here. Being the outsider will require that you establish some trust in those you do business with here…. remember it’s their turf and you’re the visiting team. There are steps you can take to limit your risk in trusting those folks who’s services you will need to utilize.
I would guess there are just as many folks that hold an opposite opinion on your outlook in life and business of “knowing and loving” a person as the basis of establishing trust. Just look at the divorce rate as well as how many folks have been screwed by good friends and family in life and in business. People they knew and perhaps onced loved. Unfortunately I know many more of those folks than those that have been taken by professionals that were properly vetted.
In a real estate transaction you can also make sure the national registry has been properly updated with your information as owner before making payment to the attorney. It’s not that difficult.
BTW…. There is no limit on the amount ($10k) that you can bring into CR… it’s only required that you report amounts over $10k. I have brought in larger amounts without incident. The $10k number also comes into play on the cumulative amount you hold in CR bank accounts… once again… no problem… only needs to be reported with your tax return.
Good luck and welcome to Costa Rica.
bushmaster,
You impress me as a structured person that lives by a set of rules and you expect everyone else to live by the rules too.
I think Costa Rica is going to drive you nuts !
When someone sticks a gun in your face and robs you, the cops aren’t going to be all that upset. They’re likely not going to come to you. You’ll likely have to go to them to make a report.
When someone breaks into your condo and steals your stuff, that’s not going to upset them either. On the off chance that they catch the thief in the act, he’s not going to jail. He’s going to get the equivalent of a traffic ticket. Costa Rica can’t even keep their murderers and rapists in jail .. they’re certainly not to going to send a Tico to jail for stealing from a Gringo.
And if you decide to fire your maid and she doesn’t like it, she’s going to get her husband/boyfriend to slap her around a bit and then go the the police and tell them that you did it. You [B]WILL[/B] be arrested immediately and likely held in jail for a year before being found guilty, sentenced and deported [B]UNLESS[/B] you give her the big financial settlement that she demands, at which time, she will recant her story to the police. But, nothing will happen to her. It may be a mistake to let her know how much money that you have.
You’re going to watch the Tico in line in front of you pay a lower price than you for [B]EXACTLY[/B] the same item.
It’s all about trust under their legal system based on Napoleonic law rather than English common law. You see, any Notario in the country can change who owns your property at the National Registry without your knowledge or consent. If he says that you appeared before him and transferred the property, then [B]THAT[/B] is [B]EXACTLY[/B] what happened under their system. He can change the title of your property to his buddy’s name who will subsequently sell it to an innocent third party. This innocent third party will have greater rights than you do in court. They will likely retain the property and you will have to try to recover your loss from the crooked lawyer. Good luck with that !
CR isn’t the Wild West because, there, law was the 5 rounds in the cylinder and justice was the one in the chamber. In CR, they won’t even let you have a gun, They probably won’t let the security guard that you hire have one.
The move to CR doesn’t work for over half the folks who try it …
Please give serious thought to what you’re going to be able to live with before making this large financial step.
Yes, it is a beautiful country … but “paradise” comes at a price.
Hey Bill…. don’t scare him off… It’s not that bad! Although some of your points seemed to have a basis in true stories I too am familiar with! I do like the fact that you touched on the idea that under their system of law that trust is a much bigger issue than it might be in the US. As we both know, the legal system to resolve issues in CR is not for the faint of heart. And once again, you’re the foreigner. So don’t bet the ranch on a good outcome.
That being said I’ll once again stick to my earlier position that trust is a much more important commodity to be developed in CR as compared to the US. The idea that the legal system in CR is going to rescue you when you get into a bind in business is a dangerous position to take. I would much rather avoid that possibility by knowing who I’m dealing with and developing a circle of trusted associates that have a track record of honesty in dealing with the people I do business with. It’s served me very well for 11 years here and hope to continue that streak.
I know first hand Scott feels the same way and will only recommend people he is completely comfortable with. I’ve done business with a couple and have complete confidence in them.
Well …
I’m not really trying to scare him off … but I want him to be happy …
And we both know that it takes a certain personality to be happy in CR …
I’d rather him find out now that it’s likely to take hours to do at a bank what he does in seconds in the US …
Costa Rica is not a place to believe that your time (or opinion) is valuable … as it has no value at all to anyone else …
Whether that be the serviceman that you are waiting on who was supposed to be there 3 hours ago … or the cattle farmer who decided to move his herd down the middle of the only street to your house for 5 miles.
Some personalities would find this insulting and disrespectful and be quite unhappy … others would simply think … Ahhh … whatever … I’ll just have another drink.
Today, I am very much that second person … but I can remember an earlier time when I was much more driven, and always in a hurry, that CR would not have made me very happy.
I believe that statistics are made up of real people and the one thing that these people have in common is that they don’t think that statistics apply to them.
Take care,
Bill
No “sorry” necessary Scott, I agree completely. As originator of this discussion I hate to say it but I have gotten a few comments that “trust” is necessary in CR. I say B.S to those remarks. They beg into relating to cultural differences. In the USA, for instance, do immigrants, especially illegal ones defer to the “It is their country?” political stance. Of course not. They congregate in language related communities and make demands for change. So,, we should not follow their lead? Having said that, I think all those who recommend relying on cash up front because of the cultural differences are among the most naive people I have heard from. Business=agreement, trust is reserved for love and friendship.
Your response completely avoids a simple question. Please do not lecture me on “cultural differences” since I have lived in multiple cultures. Your response is vacuous, naive and avoids quintessentially easy question. It burdens the original interrogative with vastly unrelated topics.
“In the USA, for instance, do immigrants, especially illegal ones defer to the “It is their country?” political stance. Of course not. They congregate in language related communities and make demands for change. So, we should not follow their lead?”
That statement in a nutshell sums up where you’re headed.
Good luck on your Costa Rican adventure my friend…. the two year countdown begins!
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