DO I NEED TO START A COSTA RICA CORPORATION OR S.A.
BEFORE I BUY PROPERTY IN COSTA RICA?
One of the first things you will want your Costa Rica lawyer to do is set up a Costa Rica corporation for you. There are many reasons you will want to have a Costa Rica corporation or "sociedad anomina" (S.A.).
One of the main reasons is that it can protect you from losing your property in case you are sued.
Another reason is that it may make it easier to do things like open a bank account, get services like telephone lines, and so on.
And it may make selling your property easier in the future if you decide to sell it.
You may also choose an LLC or Limited Partnership, instead of an S.A. or "Sociedad Anonima". Ask your attorney about the differences.
One thing I can tell you is that while "Sociedad Anonima" means "anonymous corporation" they are not really anonymous. While your name may not be on it per se, you will still have to report any sale to the IRS. So "anonymous" is really a misnomer.
Almost everyone who buys property in Costa Rica buys it with an S.A.. This can make buying less of a hassle and less costly, and it can make resale easier and less expensive as well, in addition to giving you some protection against being sued.
Here is one link from a well respected expert about this:
Costa Rica Expertise - A Checklist To Stay Out of Real Estate Trouble
Sometimes you can find an "off the shelf" corporation to buy from an attorney in Costa Rica. This is a corporation that has already been set up, already gone through the process of being legally approved and accepted by the Costa Rica government, and is ready for anyone to register it into their name and use it to hold property, open a bank account, and so on. The last time I checked, these go for around $500 but don't quote me, it may have gone up or down.
You can shop around for a better price, but honestly I would recommend having your own attorney do it, even if he charges more than some others. Trust and competency are crucial in this endeavor and so if it costs a bit more to have your attorney do it, in the long run it is worth it to establish a relationship with him or her.
(If you don't have your own Costa Rica attorney yet, please read this article about how to choose a Costa Rica attorney, next!)
When you use your own attorney, who you know and trust, then you know it will have been done right, and he/she will hold the papers for you, make the proper entries into the books and all your records are in one place, your corporation taxes* get paid on time and so on.
*As of January of 2015 corporation taxes have been declared unconstitutional and so unless a new law is passed, corporations will not be taxed for 2015. However do check with your attorney to find out the latest developments on this!
This is just an introductory article to clue you in about the customary procedure of using a corporation to buy your real estate in Costa Rica. Please do further research on the web and find out more about having an S.A. in Costa Rica, and then find a good attorney and speak with him about it.
(See my Helpful Resources page for links to some Costa Rica forums where you can find more information about Corporations and LLC's.)
Please continue to learn about Costa Rica with this article:
HOW TO CHECK A PROPERTY TITLE IN COSTA RICA
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