Incorporating May be the Answer

A corporation (Sociedad Anónima) is a commonly used figure of Mercantile Law in Costa Rica. Corporations are often used to acquire goods such as properties and vehicles, because it is fairly easy to form one and there are several advantages to registering a good in a corporation as opposed to a "regular" person.

Some of the advantages are:

1. Responsibility

   
   
   It is recommended that each good be registered under a different corporation. This way the entity’s civil responsibility, should there an event that generates this responsibility (such as an accident), falls exclusively on the good(s) that belongs to the corporation This way, the owner of the corporation and his/her assets cannot be pursued.



2. Non-Payment of Transfer Taxes

   
   
   When you make a transaction with your property in a corporation (sale, transfer, donation), you only have to sign over the corporation’s shares to the new owner and register the naming of the new representative that the shares determine. This avoids the need to pay transfer taxes and legal stamps for inscription each time the property is economically moved to a different person or company.



3. Anonymity of Shareholders

   
   
   The new property represented by the corporation remains off the legal books that the corporation must have, and the property is not registered. This guarantees anonymity for the shareholders.



4. Passing down in life

   
   
   In the case of passing properties down, it is less expensive to sign over shares in life to the person you wish to have your property when you die, than it is for your relatives to open a probate proceeding (which is an expensive, lengthy process in which interested third parties could participate).

It is important to take into account that upon acquiring a property that is registered under a legal entity that you seek advice from a well-known or trusted attorney. He or she should make sure that the property has no previous debts that could place the property in question in danger. The notary or attorney will research the property’s previous movements in the Registro de Personas Jurídicas (Corporate Registry) and ask for financial statements and tax declarations from he or she who will sign over the shares.

It is true that the cost of setting up a corporation before acquiring a property is an additional expense. However, in the long run it becomes a more versatile and less onerous alternative for economic activities with the property, as it involves the additional attraction of not having to pay transfer taxes, as well as the immediate transfer of the property.

Courtesy of Costa Rica Traveler. Published with permission.

Hot Market Areas

Costa Rica’s real estate market is booming. A stable government, steady economy, great social benefits, pristine landscapes and a welcoming, friendly people all help make the country a popular destination for retirees and investors. Here is a guide to some of Costa Rica’s hottest real estate areas.

Guanacaste

A great climate, gorgeous beaches, and a growing infrastructure make this Costa Rica’s hottest market right now. Several international hotel chains (including Four Seasons, JW Marriot and Hyatt) all contribute to the area’s growth, which radiates from Tamarindo. Liberia, the provincial capital, is also growing due to increasing traffic at the international airport.

Northern Mountains

Monteverde’s cool climate and tourism opportunities draw some to this region. La Fortuna and nearby Lake Arenal are starting to attract more international buyers. The area around Ciudad Quesada has lots of large ranches available.

Central Valley

San José’s western suburbs of Escazú and Santa Ana are home to the many of the valley’s moneyed, and local services reflect this. Plenty of shopping, great restaurants, excellent international schools and big-city amenities contrast with the area’s laid-back feel. Heredia, north of San Jose, offers an excellent climate and proximity to great services. Grecia, to the west, is close to the airport. New commercial developments are popping up in this cool mountain community.

Central Pacific

From Jacó to the Quepos/Manuel Antonio area, this region has seen terrific growth in recent years. The long-awaited San José – Jacó highway, slated to begin in November, aims to cut travel time to just 45 minutes. Beautiful beaches, a strong foreign community and plenty of amenities make this region very popular.

Southern Pacific

Dominical and the Osa Peninsula

Virtually untouched and wild in beauty these areas are experiencing increasing land values, yet still are more affordable than many beach areas around the country. The government is planning on building an international airport in the region, and speculators are already buzzing that the area could be the next Guanacaste.

Limón

Growth has been slower on the Caribbean side. While the Puerto Viejo area has seen a small boom in recent years, most developers and agents figure that it will be five to ten years before land prices and demand compete with the rest of the country.

Courtesy of Costa Rica Traveler. Published with permission.