Buying Costa Rica Real Estate in a Corporation

Visitors to Costa Rica are enchanted by its natural beauty, and many decide
to buy land and move here with their families.

A sharp increase in foreigners buying property has been seen along the coastal zones and in the Central Valley.

Things can get complicated when some decide to sell their real estate and return
to their countries of origin.

One option is to acquire Costa Rica real estate by buying out the shares in a
company owning that property. Houses, condominiums and offices can all be owned
by companies. Anyone interested in buying out the shares becomes the virtual overall
owner of the property.

The only step to be taken after buying the shares is to change the names on the
board of directors and the registered ownership of the shares. This is a commonly
used recourse in Costa Rica for buying and selling property and has big advantages
for foreigners.

Advantages

Francisco Molinero, notary and attorney for LandCo, a legal service company specializing
in conveyance and real estate law, gives the following reasons why foreigners
prefer to buy property this way:

1. Buying real estate from outside the country can be extremely difficult
legally because of all the procedures, steps and legal jargon, and the challenge
of finding someone in-country to help complete the deal. Consulates with a notary
department can help mediate the process but not all consular offices have this
service.

2. Many foreigners buying property do not wish their names to figure as owners
in the Property Register database. Buying shares in a Costa Rica company ensures
anonymity since the property is registered under the company name.

3. Many local and foreign entrepreneurs use this legal option to protect themselves
against any possible embargo processes, as most of these cannot access companies.

4. Opening a bank account in Costa Rica can be very trying for foreigners.
However, by acquiring a company, the whole procedure is made much easier; the
only bank requirements being the company’s change of title-ownership undersigned
by a public notary and other minor paperwork.

5. It is much easier to obtain cellular phone lines.

6. Time and money is saved, with no need to come down to Costa Rica every
time some procedure demands the physical presence of the purchaser.

Recommendations

Despite the advantages of buying real estate in the name of a corporation, there
are other considerations to take into account. Molinari warns that, “Both
the client and attorney must do their research to ensure that the company has
no pending law suits, be they penal, civil, labor or any other kind; that it has
no outstanding debts with state institutions, banks or private entities, and that
the property is up to date with all municipal and income tax payments for that
company”.

It is also important to ascertain that the company has no other assets
or stock other than those the buyer wants to obtain to avoid the new owner ending
up with legal problems pertaining to the extra assets.

Finally, buying property in this way does not exonerate the owner from submitting an annual income tax return, be they Costa Rica nationals or foreigners.

Please note that the rules and regulations regarding ownership of real estate in a corporation can be complicated and things may have changed since this article was written so make sure you consult with a qualified legal professional to help you with this process.

Our thanks to Simmel Ortegarrieta our friends at La Nacion – Costa
Rica’s largest Spanish circulation newspaper for their permission to use
this article…

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Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.