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Imxploring:
“Costa Rica should be quite proud of being black listed and respecting the rights of folks to defend themselves from a US government gone on a crack binge! Because much like a crackhead… they’ll do anything to keep it going… no matter who they hurt or how many bad choices they make!”Sadly Imxploring, it’s probably only a matter of time until CR does comply with the OECD “rules” since this country is not a “tax haven”/offshore jurisdiction and, least on the surface, the government here has little to gain by not cooperating with OCED.
The flipside is that this, most likely, will have little effect even if they do comply. However, it is the thin edge of the wedge 🙂 Most recognized “tax havens” have already “given in” to the OECD over the last 10-15 years – and unless there are genuine crimes involved, eg drugs, money laudering, fraud, arms trafficking etc, this has not greatly impacted the offshore services industry in these countries. A fair number of these jurisdictions consider offshore services to be a relevant part of their economy and this is unlikely to change without a fight.
Panama, tho complying with OECD on the surface, is in a grey area. Pressure is still being placed on Panama by the OECD for further cooperation/disclosure. However, it’s asking a lot for Panama to just give up their offshore industry when this contributes to their economy – so expect them to hang out longer. Probably worth noting is that Panama does already have a MAT (Mutual Assistance Treaty) with the US.
The core criteria for qualification to legitimately use “tax havens” (tho there can be exceptions), is more a personal issue and depends on the domicile country. With the exception of Lybia, Saudi, one of the “stan” countries and the US, citizens of all other nations can simply export themselves “offshore” and are only liable for taxation/filings in their “offshore country” – assuming there is any taxation 🙂 Under that scenario, who cares if there is cooperation on tax matters? It is totally legal and no taxation is due on “global interests” – tho like all good things, when high tax regime countries are under pressure, they could resort to changing the goal posts and introduce laws which require filing/payment of taxation on a global basis. If there is a dollar to be gained, they will always try 🙂
Edited on Apr 06, 2009 09:31
Question: Why should all countries have a standard taxation system?
Why do you ask sane hard questions? 🙂 It’s too difficult to answer unless speaking for an OECD member government, but first benefit is that it creates employment in having tax offices staffed to shuffle paper.
For some nations it does not make sense to implement a “standard taxation system”. The cost can be much higher than any incoming tax revenue and can drain resources away from higher priorities. Other examples are where taxation is levied on import duties and at points of sale (in effect Sales Tax or VAT) – much more efficient!
BTW.. you may remember the introduction of VAT in the UK, early 70’s? Claims were made then that VAT would replace “standard taxation”. Almost 40 years later, the UK is still waiting for this simplified taxation system – obviously this just slipped the memory of the UK representative at the OCED.
It’s hard not to raise a smile when a group of non-elected countries form a club (OECD) and plan what is best for the rest of the world – then claim to be promoting something called “democracy” 🙂
Costa Rica is not exactly a “tax haven” in the true sense. The view taken by OECD is that any country with little or no tax regime or the inability/lack of transparency to cooperate with “civilized world” in the exchange of tax information is a “tax haven”.
When the CR immigration department is drowning in work and where basic utilities can be erratic, maybe there are higher priorities relating to basic infrastructure to resolve before fussing over OECD pontifications?
Who knows amccarty, but suspect the Costa Rica government will put a framework in place to say they are in compliance with the OECD club without reaching that boring old threat of “sanctions”. Costa Rica is not a country which relies on an offshore services industry to support it’s economy – unlike “real” offshore jurisdictions (tho most of them are already complying anyway).
The specific circumstances may make a difference, but sure leaves a bad taste!
Doubt there is anything the Realtor can practically do, – it’s not illegal, assuming there was no contract between the parties.
The other aspect is, even if there was legal merit – can you see a Costa Rica court handling this competently?? They are unable to handle serious land/home frauds.
Karma has ways 🙂
Edited on Aug 30, 2008 11:43
Clayton:
A few thoughts more related to protecting your asset – sadly this often needs more attention in Costa Rica than in most industrialized countries.
One suggestion which may be worth checking out with a reputable lawyer and accountant – why not have two corporations? One for holding the asset value of your hotel development and another to actually trade in the business as a hotelier.
The latter would be the responsible corporation in terms of income, due taxation and any daily liabilities in relation to running a business.
The asset-holding corporation would never trade and would exist solely to protect your asset value.
Two other points which may appears basic, but are relevant in Costa Rica. With Sociedad Anonima entities, the powers of both the President and Secretary are such that these positions normally empower full Powers of Attorney over the corporation. It is important that you are one of these officers and the other should be a person you have total confidence in. Having any lawyer and his/her staff as officers is not advisable – unless any of these parties are actually partners or involved in the business.
Second point is that the statutory books of an S.A. should be in the possession of the principals – possession can become meaningful. Of course, the books will have to be made available to lawyers/accountants for maintenance and meetings, but these documents are better in your hands.
Costa Rica is not an ‘offshore’ in the true sense and there is little confidentiality in a Sociedad Anonima, despite the name.
Good luck on your project!
“I would NOT recommend anyone in this country for professional wealth management.”
Hard to stop laughing Scott – and totally agree *lol*
In response to your post Dixon and only from personal experience. I’ve never had my passport stolen (or lost) and only know of two individuals who experienced passport problems – one was a genuine burglary and the other where the passport was mislaid.
That said, there is an increasing crime issue within Costa Rica and this appears to have started getting government attention and where plans are currently being produced to add to the judiciary and fund prosecutors more fully. In a scenario where the justice system can almost reach the level of being stagnant and taking years to handle a case, – this simply enables ‘perps’ to continue a life of crime until they are locked up. It may also be that offenses such as passport theft are committed by the same small element of offenders who are still walking the streets awaiting a trial date – tho who knows?
Considering the proportion of US folks visiting Costa Rica, it is probably inevitable there will be more of them on the victim end of offenses. It’s also fair to say that the offenders are not always of Costa Rican nationality. Of the few incidents I’m familiar with, mainly fraud-related, around 50% are committed by US citizens busy defrauding other US citizens. The remaining 50% involves primarily Costa Rican nationals who are well-familiar with the slow pace of justice here and use that to their benefit.
Despite the grass never being greener, Costa Rica is very rich in many ways and crime is still less than in neighboring countries, tho would still be nice to see the justice system dust down the backlog of paperwork and get up to speed.
Would agree with previous posts and add that any notary stamps/seals need to be checked/verified and not taken at face value.
Same as Scott – don’t know them deny.
Apart from “front end” websites, would strongly urge you to be aware of any stage of business or legal dealings in Costa Rica – that includes the “trusted lawyer” formalising any transaction. Anything from the mouth of a realtor carries no weight since my dog can be a realtor here and, overall, is probably more trustworthy.
That said, there are honorable people in both real estate and the legal profession, but sometimes it is very hard to establish one from the other – infestation has a habit of coming out of the woodwork over time and with amazing regularity.
Just be “aware” and have documentation for everything!
Good luck!
Anthony
