Month: March 2022

Owning Property in your Personal Name or Costa Rican Corporation

You have finally made the decision to buy your dream property in Costa Rica! But one question remains… Should you own the property in your personal name or a Costa Rican corporation? Below are the pros and cons of both to help make the right decision for you. I highly recommend you also talk to your trusted Costa Rica legal team as they will guide you in the right direction.

Owning Costa Rica Property in Your Personal Name

Great news! Foreigners are permitted to own property outright in Costa Rica. They have the same rights as Costa Rican citizens when it comes to real estate. There are only two exceptions.

  • Foreigners cannot own 100% of property in a maritime zone or concession land.
  • Foreigners cannot own INDER property (which is land donated to poor farmers).

Pros of owning Property in your personal name

  • Cheaper. You will pay fewer taxes because you will not have to pay the corporate tax. No resident agent fees. No shareholder registration fees.
  • Less headache. The rules and regulations are always changing for owning a corporation.

Cons of owning Property in your personal name

  • If you sell your property, you will have to be at the closing.
  • You cannot own concession/maritime property.
  • Local banking is more restrictive.
  • You cannot put a phone plan under your name.

Owning under your name is the perfect option for those looking to move to Costa Rica and start working on their residency process right away.

Owning property in Costa Rica image

Owning Property Through a Costa Rican Corporation

First, let’s go over some details about Costa Rican Corporations.

The two most commonly used types of corporations are the Sociedad de Responsabilidad Limitada (S.R.L. or Ltda) or the Sociedad Anonima (S.A.). Both the S.R.L. and the S.A. are limited liability corporations. This means that owners are only responsible for the corporation’s debts with their own personal assets up to a certain limit. A S.R.L does not require a board of directors a S.A does.

Whether you are forming a S.R.L. or a S.A. corporation in Costa Rica, the process is fairly simple. A corporation may be formed by as few as two individuals with legal capacity. By law, the corporation will have to file a formal incorporation deed with a Costa Rican Notary Public. The incorporation deed will also need to be filed for registration at the Commercial Section of the Public Registry. All information contained in it becomes available for public access and future changes to the by-laws must be recorded at the Registry.      

Sunset over Pacific in Costa Rica

Pros of Owning Through a Costa Rica Corporation

  • Corporate ownership offers a layer of liability protection.
  • Estate planning and probate is a much easier process when your property is under a corporation.
  • A corporation can offer more flexibility. You can grant Power of Attorney (POA) to take care of issues on your behalf. For example: Signing closing documents, applying for utilities, complying with legal requirements when out of the country.

Cons of Owning Through a Costa Rica Corporation

  • Expensive. You must pay to open a corporation. Each year you must pay a corporate tax and pay a fee for shareholder registration.
  • The rules and regulations are always changing, you must stay up to date with all the new information.

Owning under a corporation is a great option for those who plan to rent out their property and those who are not ready to move to Costa Rica full time.

When making this big decision it’s a good idea to sit down with an attorney you trust as mentioned before and consider your options. This is a personal decision and you want to pick what will work best for you. If you have any questions, please reach out and I would be happy to assist you.

Further information on How to Buy Costa Rica Property.

La Paz School Scholarship Program For Less Fortunate Children

La Paz is an extraordinary school. One that thinks outside the standard school curriculum. The mission “is to cultivate informed and mindful citizens of the world”. La Paz shares this wonderful education with the local community by having a scholarship program for less fortunate children.

La Paz School

First, let’s start with the basics. La Paz Tempisque is located in the town of Comunidad, behind the Papagayo Do It Center. The school hopes to accommodate 300 to 500 students, ages 3 to 18, from the following communities; Liberia, Papagayo, Coco / Hermosa, Filadelfia, Comunidad, Guardia, and Santa Cruz. The demographic of the students is a mixture of Costa Rican  citizens, residents, and ex-patriots from all over the world.

So what makes this school special? Well, how many schools do you know of that have a chicken coop, an apiary, mandala gardens, or fruit trees? Not too many! Alongside the standard subjects of math, language, and science, children experiment with hands-on life skills and emotional philosophies. La Paz’s core curriculum is based on international baccalaureate, US and Costa Rican standards and benchmarks.

Now for the best part, the scholarship program! The La Paz Scholarship Program is donor-funded. Community leaders that participate within the school seek out underprivileged children in the local communities and offer them the opportunity to learn at La Paz. Oftentimes, a donor is partnered with the student they support to create a bond and give the student a sense that someone is watching out for them. The goal of the scholarship program is to help these less fortunate children become future leaders and raise up the underprivileged communities they came from.

La Paz is having their 12th annual 5K race on June 11th, 2022 in Playa Hermosa, Guanacaste. The goal each year is to raise money for the scholarship program! Over 88 less fortunate children have been able to receive an education at La Paz through this program. The goal this year is to raise $60,000, which will cover tuition for 6 students.

I knew I had to help out and be a part of this spectacular program! I became a diamond sponsor for the race in June. If you have a business, this is a great way to show your support and participate in the local community! Make sure to come to Playa Hermosa on June 11th to check out this incredible event. The kids even have their own little race on the beach!

How else can you help? La Paz is always accepting donations! No donation is too small. If you are interested in donating, please reach out to me at jaaechef@gmail.com. I will gladly send you all the information you need as well as put you in touch with Astrid, who is a helper mom at the school. For those who want to move to Costa Rica and send their kids to school here, I highly suggest La Paz. Come and take a tour of the school and see what it’s all about! You wont regret it.

 

What To Look For In A Property Management Company

A great property management company can make owning in Costa Rica a dream! But a bad one? Well… it can be a nightmare. Below are important traits to keep in mind when hiring a property management company.

Communication

We have always heard, “Communication is key”. In property management, it’s essential. Without proper communication, owners are completely in the dark with what is going on with their property. A great property manager should always have all communication channels open and be willing to respond in a timely fashion. Not only should property managers make it imperative to communicate effectively with owners but with renters, landscapers, housekeeping, and all those involved with the property.

Detail Oriented

The small things do matter. Keeping a close eye on the property and paying attention to all the small details makes a big difference. Checking on a repair after it was done or inspecting the property after it was cleaned are signs of a detail oriented property manager. As well as staying ahead of new ownership laws or new rental regulations. You don’t want a property manager taking care of your finances if he/she doesn’t care about the details!

Knows the Property

Your property manager should know your property better than you do. Understanding the property well will help the property management company make the right decisions when it comes to maintenance and upkeep. If your property manager doesn’t know your property in depth, how will they be able to check if the renter has left it in good condition or if the gardener appropriately landscaped?

Strong Marketing Techniques

If you hope to make a decent income from your property, your property management company needs to have strong marketing techniques. Without great marketing, property managers will struggle to find renters. If a property management company is willing to invest in itself, then that’s a good sign for you to invest in them.

Professionalism

A property management company should never allow their personal biases to affect their judgment. There are no excuses for behaving tactlessly or rudely towards owners, renters, or others involved with the property.

Local Presence

Always look for a local property management company that has been in business for a good amount if time. A local company will understand the rental market and be knowledgeable about various goods/services in your area. More importantly, a local property manager has an easier time checking in on your property. They can catch any issues before they become a serious problem.

Billing Transparency

Understanding what you are paying for is critical. You want your property manager to be clear and concise about each bill and charge you receive. Are you receiving monthly statements? Do the statements have a breakdown of costs and expenses? Do you know what percentage they take from rentals? Knowing exactly what you are paying for will lead to a better relationship and no misunderstandings.

Sleeping at night will be easy, knowing your property is in the right hands. By keeping the qualities above in mind, you will be able to find the right property manager for you. Still have questions or are interested in some recommendations? Please reach out and I would be more than happy to assist you!