Can foreigners buy property in Costa Rica?
Yes, anyone legally in the country, whether here on a tourist visa or some other method, is entitled under the Constitution of Costa Rica to equal protection under the laws. This includes the purchase and ownership of real property.
How safe is it to buy property in Costa Rica?
In theory, it is safer than in many advanced countries like the US due to the rigorously maintained National Registry, in which any citizen can look up all the pertinent legal details for any property or corporation. However, the system is only as safe as the people who run and use it. You have to be careful with whom you do business. There are real estate scams you need to steer clear of from day one. But it’s tough to figure it all out quickly, and sometimes time is of the essence. The solution? Get a great legal team in place before you buy. This helps prevent running into serious problems later. An ounce of prevention. . . .
What is the procedure for buying property in Costa Rica?
It’s the same as it is in Europe or the US. You identify the property you wish to purchase and make an offer in writing to the owner, called an Offer to Purchase, or “OTP.” If they accept, you have your attorneys prepare a signed Sales and Purchase Agreement, or “SPA,” which memorializes and details the terms of the OTP. While it is not uncommon for both buyers and sellers to each have an attorney, there are many sales which take place with only one attorney involved, which is a good reason to select an attorney you trust to ensure your interests are fully protected. It’s typical that at the time of the SPA your deposit goes into escrow and is refundable if the property does not meet the terms and conditions as required in the SPA. The due diligence is then carried out, and if all is as it should be, your deposit then becomes nonrefundable, meaning from that point going forward, you are committed to buying the property or you will lose your money. On the day of the closing, your attorneys meet with the sellers’ attorneys, everyone signs on the dotted line, and the closing is executed. The remaining amount due for the property is paid, and the title transfers to the new owner. Your purchase is immediately recorded by your attorney in the National Registry, offering you very strong legal protection. If there is any financing, the mortgage is included in the closing papers. Once the Registry finalizes the transfer, which typically takes several months, the closing process is complete. You can thereafter check on the legal status of your property from any computer with Internet access, anywhere, any time.
After deciding if I am going to use a corporation to hold an asset, how many officers and shareholders are required to incorporate?
The minimum number of officers and shareholders depends on the corporate structure you select. The minimum number of officers is four for a Sociedad Anónima (S.A.), and the minimum number of officers is two for a Sociedad de Responsabilidad Limitada (S.R.L.). Both types require a minimum of two shareholders when the corporation is being created.
What are your firm’s legal rates?
We are very competitive with other similar firms. Specific rates depend on the work to be done. Many jobs are billed by charging a small percentage of the total sum involved in the transaction, as is required by local law. This would apply to real estate and other property closings, probates, etc. We are happy to negotiate reasonable rates on a case-by-case basis. On ongoing cases, or an investigation problem, we would charge per hour. Please contact us for details.
Can foreigners buy, own and operate businesses in Costa Rica?
Yes to all three. The only tricky part comes in “operating” the business because you do need specific residency status to actually hold a job. Having a job is defined as earning a daily wage at some professional activity in which you draw a weekly, bi-weekly or monthly paycheck. On the other hand, as the owner of, say, a hotel, even on a tourist visa, you are legally allowed to operate it in the sense of making all the decisions that are an owner’s prerogative, including designing the decor, hiring and firing the staff, creating the marketing campaign, and so on—and also keep the profits at the end of the year. If all that’s not “working,” we don’t know what is!
Is it important to get my residency right away in Costa Rica if I plan to live there at least part of the year?
If you do intend to live here for more than six months per year, then you should plan to acquire legal residency. If you do not, you will still be able to leave the country every three months and remain a “perpetual tourist,” but no one knows when that loophole might close. Also, you need your residency papers if you want to work here. We can help you with that!
How is making a will done in Costa Rica?
The Costa Rican common practice is to have a will executed before a Costa Rican Notary. It must be issued in Spanish but may be translated into a foreign language using an officially accredited translator. The two most commonly recommended types of wills are the open will and the closed will.
The person (also known as the testator) prepares the will before a notary public and three witnesses. It includes the name of the executor of the will, the person who will manage the assets until they are given to the heirs. It is written on a public deed and indicates how to distribute total or specific goods. The original document will be sent to the National Archives (Archivo Nacional).
This is handwritten and indicates the assets to be inherited and who the heirs are. A closed will is signed in the presence of a notary public and put in a sealed envelope. The envelope is closed by applying a wax seal to ensure that it will be opened only by a judge because this kind of will stays with the person it belongs to and is not stored in the National Archives.
Can a probate be carried out without going to court?
According to the Costa Rican Notarial code, Notaries are public officers who can carry out a probate within their competence. This process is called a Notary Probate. However, it is only possible if the following conditions are met: all heirs are in agreement and there are no minors involved as heirs.
What happens if I don’t leave a will?
The Costa Rican Civil Code indicates who the heirs will be if there is no will. The identification of heirs goes in accordance with the following lines of succession: spouse, children and parents, siblings, nephews and nieces. If there is no living relative, the Government becomes the last heir in the line. When that happens, a board of heirs will be created, presided over by a judge who will help them distribute the assets as the law requires, making decisions and protecting the interests of all.
What are the specifics of how assets are distributed among relatives when there is no will?
The spouse of the testator receives 50% of the assets earned/gained after the marriage took place. The other half will be received equally by the children or parents of the testator.
What happens if the person dies without a will and without direct relatives (spouse, parents, and/or children)?
The chain of succession, according to Costa Rican Law, then extends to indirect relatives such as siblings, nieces and nephews.
Is it necessary to have a lawyer to purchase Real Estate in Costa Rica?
Yes. You will need both a notary and a lawyer. Some contracts affecting real estate assets must be formalized by a Costa Rican Attorney/Notary with a current commission. This is a must in order for a property’s title to be publicly recorded. A Notary in a transaction is by law a “public officer” which is interpreted as a “neutral third party” in business transactions. They are obliged to protect both parties’ stated and unstated legal interests.
Are all lawyers also notaries? Are all notaries also lawyers?
All notaries are lawyers, but not all lawyers are notaries. The current situation in Costa Rica is that someone must first become a lawyer, and then if they want to also be a notary they must take some required courses and graduate again in order to become a notary.