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We are moving to Costa Rica in December. We will start our residency papers in the next couple of months. Today I bought a used Galloper. The vehicle is currently insured and it is registered through December. As Non-Residents can we own, register, and insure a vehicle in Costa Rica? I seem to remember reading that we can’t. If we can’t, can we own, register, and insure it through our Costa Rican Corp? I searched old posts for these answers and didn’t find them… Thanks for your help.
Sincerely,
JerryJerry,
As everyone knows, most of all Ticos themselves, Costa Rica is buried in bureaucratic red tape. As a result, for practical reasons government institutions generally grant the same rights to people who apply for different statuses as they do to those who have already gained them. As such, the INS, immigration, police, ICE, etc. will treat applicants for residency in the same fashion as full blown residents. You should have no problem.
The other good news is that the car you bought is ideal. Gallopers are ubiquitous there. The only question is if the Gallopers sold there differ in any way from the one you bought here, introducing the possibility of problems or extra expense with maintenance and/or parts.
My question is, after all you’ve read and participated in this forum, why you didn’t choose to buy the vehicle once you got there? The reasons are obvious – the hassle and expense of transport, importation, and possible differences in models.
I suppose that, even with this knowledge, people may still feel more comfortable acquiring such an important asset where they fully understand the language and the laws.
Good luck to you! I wish I were as close to moving back there!
Edited on Mar 24, 2007 05:09
Jerry, GringoTico is almost certainly correct that you can purchase and register this car as a non-resident. However, if by some chance he is wrong, then you certainly can purchase and own it in the name of your corporation.
The only remaining question is what other assets are held by the corporation? Were it mine to do, I would try not to own more than one asset in any corporation. If you adhere to that logic, then sale of that asset is simple and tax-free. You just sell all the shares of the corporation to the new owner.
What’s more, if your car and home are held in different corporations, should you become liable for damages arising from a car accident, your home would be protected. It would not be an asset of the corporation that owns the car.
Good advice
My car is owned in the name of one corporation and it is the one and only asset in that corporate name.
I have other assets that are held in different corporate entities for asset protection purposes.
The more corporations you have, the more reports there are every year but a good accountants should be able to do that for you easily.
Scott Oliver – Founder
WeLoveCostaRica.comWe are going to be down in May and will be looking for a Galloper to purchase. Probably will not get it insured since I have heard insurance is very expensive there.
Interesting, Scott. I just asked my accountant about annual reports and he recommended against filing them for corporations which have no economic activity, as ours do not. He said that when the corporations are sold there may be a reporting requirement and maybe an interest penalty to be paid but that it would be insignificant.
Supplemental auto insurance here is only expensive if you buy the collision, comprehensive and theft coverages. Yes, those are pricey, but the extended liability coverages are cheap.
GringoTico,
I should have been clearer. I bought a 1995 Galloper Turbo Diesel that is registered, insured, and resides in Costa Rica. I would have waited and bought something when we arrive in December but we have three small children and I want to have a vehicle ready when we land. I will also be down a couple of times between now and then and will have something to drive. This opportunity came up with a friend who after living in Costa Rica has returned to the US and needed to sell their car. We have a place to keep it for the next few months.
I have been advised to follow the one asset per corporation plan and will heed everyone’s advice on that topic.
I am in the car business here in the States and look forward to learning about the costs, taxes, and process of importing vehicles into Costa Rica. For now, I am very happy flying under the radar with our used Galloper…
GringoTico from reading your posts over this past year, I wish you luck in getting back to Costa Rica as soon as possible…
Sincerely,
Jerry
Jerry
I live in the US and also own a home in CR. I bought a 97 Galloper and the liability insurance is $60 for 6 months.
JonJerry,
My apologies for assuming the worst. Given your experience in the car business in the U.S., I would definitely encourage you to look into the same business in CR. I know a bunch of Ticos who have made a lot of money importing cars. Of course, they have connections in Customs, and they have intimate knowledge of the process and costs involved. There’s no reason why you couldn’t also develop these contacts with a little leg work and persistence. You obviously already know where to get your inventory from.
I can find no fault with putting major assets in separate corporations. I do the same in the U.S., and it’s the cheapest insurance around. Of course, the bigger the asset, the more important the separation. It is, however, a very Gringo way of doing things, given the litigious nature of our society. Happily, Ticos are not at all quick to bring legal suits. As always, the more you have, the more you need to protect it.
Glad to hear your Galloper is diesel as well! The next thing you should check out are propane conversions. I rode in a cab there last summer that could switch between the two, and propane is cheap (many Ticos have propane stoves).
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