Forum Replies Created
-
Posts
-
I had a very similar thing happen with my passport the last time I was in Costa Rica. I dropped it while putting my shoes back on after going through security. Someone found it and turned it in.
Meanwhile I noticed it was missing while waiting to board the plane. Panic set in and every pocket of my clothes and (many pocketed) computer bag was checked. I had also used the restroom and went THERE to check. . . Finally we decided I needed to go inform security. I figured I would enjoy being stuck in the San Jose airport much more than the Miami airport without a passport. . . On the way to security one of the airline employees boarding the plane recognized me (from the found passport) and directed me to the security desk that had my passport.
What COULD have been a disaster if a dishonest person had found my passport just turned into a moment of panic then rejoicing!
Some points from my friend in CR. That expensive camera or laptop computer you carry may represent a year’s (or at least many months) income for many Costa Rican’s. Like flashy jewelery it can be a very large temptation so leaving them laying about is not a good idea. Another thing they pointed out is that family is VERY important in CR. Family is so important that if someone steals to feed their family they do not feel it is a crime since their first responsibility is to their family. That is probably a factor in areas that have both high poverty rates and high crimes against property.
Other than the communication gap I feel as safe or safer in Costa Rica than in an American city. Rural America is a different story but we still have crime here as well. I think that anywhere you go in the world the problems are similar they just present themselves in different ways.
Besides what Scott said about being a full time resident some of the US states also consider you a resident unless proven otherwise. They do not necessarily follow the federal tax rules and you may be libel for taxes in your state of US residence. Like the US government you are considered a citizen of that state until you are a proven citizen somewhere else. IF you still are a US citizen then you must also be a resident of one of the states. . . Since every state has different tax laws (some do not have income tax) you need to look into that as well as federal taxes.
I regularly exchange dollars for Colones at a local CR bank while visiting and they often give me 10,000 Colones notes (about or exactly $20 today) and I have never had trouble using them. When you consider that a tank of gas may cost you nearly twice that much they are not that large a note. Think of them like a $20 US bill. The 1,000 (1 mil) Colone note is the most common in use.
I usually give US 100’s to the bank and have never had any trouble with them. In the few places that we have used US currency it has been nothing larger than twenties.
The only bad experience I have had exchanging dollars to Colones was through my local US bank. I thought it would be convenient to make the exchange prior to leaving the US. So I ordered some Colones through my bank. They used a Canadian company and the notes I received were all old very worn 1 mil notes and many were defaced. These were all notes that most central banks would send to be destroyed. So on top of paying a high exchange rate PLUS a currier charge, I got old nasty bills.
Since then I have just made it a point to keep a few Colones when I come home. Yes they devalue somewhat (actually gained since last year) but it is very convenient to not have to make the exchange at the airport and have a few for those first few stops.
Note that in the US there has been a problem with people getting bogus $100 notes FROM THEIR BANK! To make it worse the government policy is whoever has it last gets stuck with it. . . So be sure those hundreds you bring from home are legit!
One thing to keep in mind is that the U.S. (the individual states and many other countries) consider you a citizen and ALL your financial affairs no matter where in the world those financial dealing occur. If you are libel for U.S. taxes then it does not matter where the profit or loss occurred. If you paid taxes on certain transactions elsewhere then the IRS takes that into consideration.
There ARE sizable tax exemptions if you move out of the U.S. and live abroad full time (330 full days a year).
Unless you give up your US citizenship the IRS considers everything in your tax related financial life, no matter where in the world, their business. For corporations this is easy, but for individuals you have to become and prove you are a citizen of somewhere else.
Edited on Oct 30, 2007 14:29
Becky, I am sorry I forgot that it was not YOUR house between when I read the article and made the post.
I’m glad the subjects of your article are satisfied with the work going on now. There should be a follow up when the work is completed and then 5 years later when hidden defects would start being obvious.
The problem many people have with inspecting work they are having done is that they do not know enough about construction. I’ve been involved in construction a significant part of my life and have designed and built a number of sizable structures mostly with my own hands. Everything from site studies and plans to forming and finishing concrete to electric and plumbing. Every time I visit Costa Rica I study the construction going on and have been trying to figure out what are good methods of construction and what are just the run of the mill cheap local methods. They do some things in Costa Rica that are unbelievable from a Gringo point of view. Some work due to the different climate, but I wonder about others.
With what I know I would still be leery of trying to inspect and comment on the local construction methods. The SYSTEM in Costa Rica is to have the Engineer that approved the plans inspect the work. Good detailed plans are part of a good contract. However, many people seem to be working around the system. Even when the Engineer inspects the work you need to be educated enough to ask him the pointed questions and understand the answers. When there is no Engineer and the Builder is playing the part then your REALLY need to know your stuff and keep a close eye on what is going on.
I am going to be building in Costa Rica in the future and even though building and making things is the joy of my life this particular task scares me.
Reading plans and specifications is similar to reading a contract. Some is graphical, some is in text. Are there any loopholes? Are ALL the materials clearly defined? Can the builder substitute materials? DO the plans show proper details so that the finish items (trim, mouldings, gutters, hardware) meet your expectations. Who and how are changes approved and at what cost? Do the plans include landscaping as part of the price? Is final site and interior cleanup part of the contract?
In this case it will all be in Spanish and NOT common conversational Spanish but technical Spanish with local technical jargon (much of which is in no standard translation book). Contracts written by lawyers can be reasonably tight but in this case much of what they do is refer to the plans as approved. So the plans are very important. THEN, seeing that the plans are followed.
The local system with an Engineer doing the inspections is a good one. However, you need to be sure HE is diligent as well AND that you understand enough of what is going on.
I have a big problem with the “solution” in Becky Clower’s article. It should seem fairly obvious that this is not just a case that the builder was ripping off the client but that the builder DID NOT KNOW WHAT HE WAS DOING! Just because the builder agreed to it right THIS time doesn’t mean he knows how or has the finances to do so.
I have seen this in the US as well. It happened to my parents who I thought knew better. They trusted the local building inspections people to protect them from bad builders. The result was that they ended up a home that has a swamp of a “finished” basement, plumbing drains that run uphill and would require demolishing the house to fix, shingles and siding that were falling off in a few years. . . the list goes on and on.
In my parents case the builder was a young man that had worked for his family contracting business and had gone out on his own. He talked a big story but knew nothing. He had no craftsmanship nor management skills. He could not properly instruct or control his workers. We suspected a lot of the money paid him may have been going to a drug habit. . . Like Becky Clower they figured this out well into the construction process and thought they had to deal with the builder to finish the job. They put more good money after bad and paid a LOT more than if they had cut their losses and gone with a new contractor. The finished result is what they have now. Now in their 80’s and living on social security they are faced with a house that is going to have enormous maintenance and repair costs.
They should have fired the contractor and sued for the entire amount of the job as well as making sure that he could not work as a contractor. YES, they would have not gotten complete satisfaction. YES, they would have had to pay much more. There was NO happy way out. But 20 years later they would be snug in a comfortable home that would not need expensive repairs that they cannot afford NOW.
To prevent things like this you have to do what has been recommended by others about investigating the builder and having a tight contract. THEN you have to personally inspect the work as it progresses. That contract needs to have check points and provisions for corrections. Even our esteemed Scott O. got stuck with a house facing the wrong direction! While many folks worry about final finish the most important work (especially in WET, earthquake prone Costa Rica) is the foundations and drains. Underfloor pipes and conduits are nearly impossible to fix. Inadequate footings result in settling and cracking well after the construction is complete. Water proofing is almost impossible or VERY expensive to fix later (as noted in a recent article here). AND the Tico cement finishers are VERY good at covering up the kind of mess that is shown in Becky Clower’s article. Once finished you cannot tell if the wall is solid or full of structural gaps until it starts to fail long after the contractor is gone.
In most places in Costa Rica you do not call a concrete company to deliver X number of yards of concrete, of a specified quality, properly mixed in a truck to be delivered at a given time. It is mixed by hand or with small on-site mixers in small batches. This is grueling work that once started needs to continue to completion for each section. The larger the job the larger the on-site mixer. Many small builders in CR do not have mixers and must rent or borrow them OR do without. . .
And by all means NEVER take the lowest bidder unless there is some outstanding reason that person can do the job for a less (Lives the closest, operates the local materials supply or saw mill. . ). Low bids are often NAIVE bids.
Another problem in Costa Rica is the short building (dry) season in much of the country. IF you and your builder are not completely ready to work at the first break in the weather and are prepared to STAY ON THE JOB then you may need to wait another year to start. Just look around at the furious rate that new construction goes on in Costa Rica in January and February. Buildings that get under roof in the dry season may get finished within the year. Those that don’t may have to wait until the next dry season and hope that water does not damage what was built and that the builder is still available. So all that critical below ground and under floor work mentioned above is being done under a time crunch. So it must be done quickly, accurately and efficiently. To do good work fast requires experienced skilled workers AND close supervision.
I hope Becky Clower gets the house of her dreams but I have serious doubts.
What is sad about this is that there are thousands of web developers looking for work. It is also sad that what is actually fairly simple work is not getting done. I build websites for all types of things and the most difficult thing to get is good photos and the second most difficult is to get paid (much less 50% in advance. . ). In Costa Rica any decent place will photograph beautifully and should be easy to build a web site around.
Getting a quick and dirty website with good structure up and running can be done in a few hours. Pretty design and bells and whistles are a different thing but can come later. I’ve registered URL’s, built a site and had it up and running within 4 hours. Propagation of the URL globally then takes another 24 hours (at the longest). Fast turnarounds are important, time IS money, especially on the Internet.
Now the marketing plans are a different thing. . . however, if you are selling from a web site then ads placed in a few places including on search engines would be a start. Ads pointing to the website from major US and Canadian newspapers would be next. You might also want to advertise in Germany, France, England. . . depending on the class of the property and how much you can spend. Small text ads simply pointing to the web page are cheap.
AND, A web not so secret, secret, YouTube videos are indexed within hours of posting. They cost nothing to post other than creating the video, are seen by millions globally, and can be pointed at your web site. They can be real video or a slide show.
Maybe I should give up my US business early and move to CR and develop realestate websites. . . However, this goes against my recent beliefs that CR is being oversold and will soon be overpopulated with people that want it to be like a US beach town. . Change is coming much too fast everywhere.
YES, From what I understand the exit tax is considerably higher for Ticos and legal Residents. I do not know the amount.
There have been some complaints about this by Ticos but no action that I know of.
I suspect that after their discussion the Immigration officers decided that there was no right way to sort out the mistake in their or you lifetime and let it pass. Be sure to identify yourself as a resident next time you pay the exit tax.
Working in a Costa Rica based business is verboten but you can as noted manage your own affairs including investments. And there are exceptions for jobs that a Tico does not have the skills for. Some may think selling realestate is managing an investment and it MIGHT be if you own the property. But selling property for others would be against the law.
Where things get tweeky is questions like managing an off-shore business such as a web site from Costa Rica. It is probably legal but this is a country where if arrested you must prove your innocence without the government proving your guilty.
I have seen various gringos and other non-Ticos in various jobs in Costa Rica. That included waitresses at a resort. HOW can that be legal? The job requirement was for multi-lingual workers with Spanish as a second language. The resort had an American, a German and an Italian working there (The owner was from yet another place). While I prefer the cultural immersion some folks do not and this was a tourist destination.
The above DID have other Tico employees. And this is the point. In Costa Rica you can get away with almost anything unless some Tico you rubbed the wrong way denounces you for it (reports you to the local authorities). Folks that hire Ticos and generally are good to the local community probably can get away with working in their own business as long as it looks like there are Ticos there to do the work. Others often have Tico partners and if they are work it is only to “manage their investment”.
As always, nothing is as simple as it seems in Paradise.
Their residency was based on a business investment (not retirement fund), and that is what they were told (That the time had to be in ONE block). Until they were ready for a permanent move they had been staying in CR for 3 months in the U.S. winter and 3 months in the U.S. summer for a total of six months. Sometimes they were there more. During the milder spring and fall weather they operate a construction business here in the U.S. which is funding their CR operations.
The most I know is that they were told this by the immigration officials and their lawyer said this was correct. . . I suspect the original “deal” was one of those negotiated amounts less than the flat $200,000. The Ticos changed the deal after 6 years. Since then they have given up on permanent residency and now they operate on the 90 day OR LESS rule. So the result is they are in CR less than in the past. They have been forced to be perpetual tourists.
Meanwhile they continue to invest in their reforestation and tourist business. The investment in both cash and labor has been significant. They have made improvements in their property working closely with MINUE (MINI?), employed Ticos on long term basis and have generally acted in the good of the environment, the country and the people. They were quite upset and depressed for a time after the news. But they continue on.
They know eventually it will work out due to the increasing investment and that they want to live in CR permanently. But for the time being their time in CR is on a 90 day deadline even when they would like to stay longer.
My point is the laws/rules do and HAVE changed. Personalities in the government change and apparently they do not always support actions of their predecessors. My friends assumed their deal was locked in as long as they met their part of the deal. They did more than they were required yet the CR government changed the deal and made it more restrictive.
I have been seriously looking into moving to CR for about 5 years and have friends there that live there half the year and work and live half the year in the US. I am no expert but I have done a lot of study on the subject.
1) Spanish is the primary language and you need to learn it well. You can get along as a tourist without it but not as a resident.
2) There are lots of beautiful affordable places out of the valley and away from the beaches. The valley is way to busy and polluted for this country boy (the entire valley smells of diesel fumes). Those that live there do not notice.
If you want inexpensive affordable REAL Coast Rica living get out of the valley and beaches.
The down side is that you may be 2 to 3 hours from a hospital or an hour or more from many goods. If you like fancy bars and restaurants there is not much outside the city and tourist areas.
3) There is SOME resentment of outsiders buying up CR (even in the sticks) and it is a favorite pastime to bait and goad the gringo until they go away leaving their property improvements up for grabs. It pays to learn the language and make Tico friends. I think SOME of this is brought on by the Gringos (classic ugly Americans) but I have seen it happen to wonderful honest friendly people. All it takes is ONE disgruntled Tico making it their business to denounce the Gringo to the authorities on every move they make to make life miserable. It happens, be aware of it.
4) Get a good local immigration attorney (get references). You may also need another for business and a local accountant (also sometimes your lawyer) to take care of the bills fees and keeping things legal (employment taxes. . ).
5) The rules for residency have changed, are changing and may change again. There are new laws but nobody knows how or if and when where they will be applied. My friends were told they could have residency based on living there half the year in as many parts of the year as necessary. THEN a few years later they were told that the 6 months would have to be in one continuous block of time. Study the situation with your lawyer.
6) The more you live like the Ticos the more you will be accepted and the less expensive your life style.
Costa Rica is a wonderful country stuck somewhere in the 1950’s trying to move into the 21st century. It IS DIFFERENT and you need to spend considerable time there to understand it. Ticos are generally friendly but they are also used to living in close spaces and publicly are quite noisy. It is THEIR country and they like to remind outsiders of it.
NATIVE vs GUEST:
There is a big difference between being a native of a country and being a quest of a country. As a native you have different rights AND can get away with different things. The native also blends in and can disappear among the multitudes. As a guest (Residency is a guest status in CR) you may be asked to leave at any time if you break the laws. As a guest (a gringo, or other foreigner) you stand out like a sore thumb and it is much more difficult to just blend in and not be found. As a relatively RICH guest you are expected to pay your way among a relatively poor populace.
NOT TAKING PART, OPTING OUT:
When you don’t take part in your government you also do not vote and thus do not logically have the right to complain about your government. Those that do not take part in government or society usually live outside of both. To drop out you generally to not have a job or trackable income. Otherwise you must pay taxes and are supporting the government. You may not have a driver’s license (a privilege not a right) or a passport. Both limiting how and where you travel and thus limiting your freedom, not increasing it. In most cases those that do not take part are very poor and have little to gain or lose by taking part. There are the exceptional few that are rich and chose not to take part. They are on permanent vacation and can afford it. However, just the act of spending money pays taxes (30% of gasoline, 50% of phone, GST. . .)
PHILOSOPHICALLY:
It sounds nice to just drop out of the world. But there is a big difference between rebelling and “dropping out”. In our modern world it is easy to become a non-person. Just let your driver’s license expire, lose your SS-card and passport. Then live with friends or relatives for a time so you do not have a permanent address or bills in your name. Then you will find it difficult to get a job and if your situation changes you can easily become one of the many homeless . . . the ultimate dropouts. Try to get OUT of that situation in our modern world. . . No ID, no address, no bills? That means no driver’s license, no job, no apartment or shelter. It is a vicious cycle and very difficult to get out of. You can easily become a non-person, a drop out.
In many primitive places of the world a large segment of the population do not take part in their governments. They also live “off the gird”, have no mail service or other government services and work in a cashless barter economy. They have no say in their governments nor do their governments care if they exist, survive or not. In most cases these are the poorest of people. They may live simple lives but they may also live short lives with no medical care and no support system other than family. Yes, they are completely free and do not need to worry about politics (until the highway comes through, the government builds a dam that floods their home or a war breaks out). They also do not have the freedom to travel to other countries (legally). How many of us growing up in more developed countries want this kind of “freedom” and are willing to drop out that far?
The many Ticos that claim to not pay taxes probably work for someone part time that pays taxes out of their incomes. The others that are subsistence farmers may pay less or none. But their lives reflect that situation. If they own a truck, car or tractor they have paid SOME taxes.
THE REALITY:
Yes, there is a big difference in the reality of dropping out and the philosophically dropping out. The U.S. is not a perfect country, none is. But it is a wonderful country. It has wonderful highways and fairly good public services. You purchase almost anything, anywhere, anytime. Most of the US is much safer than the world on average. I just cannot afford to retire in the U.S. after a life of being self employed and trying not to take part any more than I had to. . . (yes, I know something about being a “drop out”). So I look at Costa Rica. There, on a little Social Security and a small income I will be a “Rich Gringo” (not really but in comparison to the average Tico, maybe). I will also be able to afford health care that I cannot afford here. So why should I begrudge my new country of choice a few taxes? It will be my duty and honor as a guest.
NOTE: “Retirement” to me will mean working until the day I die (or am mentally unable to work), but living within reduced means. This is something Costa Rica offers in my case that the US does not. AND it will be an adventure. . .
First keep good books. The money coming back in is just like any other investment. If you lose money you have a loss, if you gain you have a profit which MAY be taxable. If you spend more on improvements than you get in your sales price then you may have a loss. The amount that went OUT can come back in the same way. Just be sure you can account for it.
As a US citizen you are libel for taxes on earnings anywhere in the world forever, AMEN.
Unless you renounce your US citizenship and permanently leave the country this is the rule AND if you owe back taxes they would still be due.
There is one advantage to living outside the us (full time) and that is a tax exemption on income up to $80,000. However, too may trips home or too much time in the US and you can lose that exemption.
All telecommunications including internet and cell phones in Costa Rica are provided by the government monopolies. In some high population density areas there are private (technically illegal, unlicensed) providers of some services. But for most of the country the government utilities are IT. It either works or it doesn’t.
In general the cell system in Costa Rica is very good and covers a higher percentage of the country than the US private enterprise system does in the US. But if it doesn’t work then all you can do is wait. There MIGHT be a new tower in your future. Otherwise the long wait for a ground line may be a shorter wait IF it is available.
Calling your local US phone company usually does no good. We had several tell us that our cell phones would work in Costa Rica. . . MAYBE in Puerto Rico (most people do not know the difference) and Mexico where US companies dominate, but not in Costa Rica.
If communications is important to them they may need a satellite system. But these are expensive and the nearest service tech may be in San Jose. If communications are important to YOU, then you may need to visit more often. For the cost of the satellite system you could visit about 3 or 4 times a year. Such is life in Central America.
There are specifications and there are specifications. In construction the specifications are the drawings. If words are used they can often be misinterpreted. The problem is that in our modern world drawings have become more and more symbolic and communicate less than they should to be good specifications.
Look for DETAILS. If you want something and your architect specifies a certain construction method say for moldings, roof insulation, drain system, be SURE there are detailed drawings. If YOU the non-expert cannot understand the drawings then they are not clear enough to avoid conflicts of what is expected.
I suggest that anyone building a home or having one built get a copy of “Architectural Graphics Standards”. It is not an inexpensive book but it can save you hundreds of times its cost. Look at the cross section detail drawings. Ask your architect to provide similar drawings of important details of your project. They will be different than in AGS because the construction methods will be different than in North America. But the point is to communicate exactly what you and the architect expect with fewer words in a way that cannot be misread, misconstrued, mistranslated or argued with.
Really good drawings will cost you a little more than the “usual” symbolic ones. They will SAVE you much more than they cost.
I was in the machine construction business for many years. We made drawings in the “old style” before over simplified symbolic drawings became the rage. Where they needed notes we had long clear notes in English (not symbolic shorthand), where we needed a shaded and cross sectioned detail we provided it. Where there were bolts and screws we drew them (not just a little center line). We received nothing but praise from the customer and the makers of the parts. We had very few “mistakes” in manufacturing. Everyone appreciates clear instructions. It is no different in construction. Don’t accept “the usual”. If it isn’t clear to you it may not make sense to the laborer doing the work either.
You need both. Good written specifications (especially to indicate material quality) AND drawings so there can be no arguing about the use of those materials.
