COSTA RICA REAL ESTATE MAGAZINE

Related to that is the ques tion of what exactly does a foreign national require to proceed with the purchase of property or a business in Costa Rica and what are the steps to take to complete that purchase safely and effi ciently? Each land purchase in some respects is unique and may require different care and re search. Sometimes two pieces of land can be contiguous and have similar visual and phy sical conditions, but the legal situation of each one could be different. A property transfer and regis tration can only be done by a Costa Rican Notary Public who for these purposes is conside red as a kind of public title offi cer. Precisely because of this status as a public official, the Notary is obliged to advise the parties in an impartial and appropria te manner and take care of the interests of all parties. Howe ver, in practice it is still impor tant to ensure that you hire a Notary who particularly looks out for your interests. It is also important to use a recognized, responsible, we ll-prepared Escrow Agent with a good track record to help guarantee the security of the transaction. Due to anti-laun dering regulations and other rules against the financing of criminal activities, the Escrow Agent is required by law to re quest information and whoe ver provides the funds will have to provide proof of the origin of the funds and their destination. In addition, a good Real Esta te Broker who is prepared and responsible is important. Not only to help find the proper ty, but also to have a prelimi nary idea about whether the land could be suitable to you and if the purchase is secure. Obviously, this must be confir med later by your legal advisor or the Notary. The Broker has an important role that could help rule out properties from the start without having to in vest a lot of time and money in them. Not to mention that the

tions are suitable? Is this the same situation if a commer cial property is being acqui red such as a hotel, B&B or a tour related business for example? In the past a partnership was the best option. Normally a “Corporation Company” or “Limited Liability Company”. (Both are limited liability). Nowadays, and due to the in crease in the costs of annually maintaining a company, it is better to evaluate each speci fic case. In the case of a small property and in the name of a single person or two spouses, it could be better and cheaper to buy it in a personal name. For large or multiple-owned businesses or properties, a partnership may be better. But the matter must be asses sed individually with the res pective legal advisor. What is the best way for a fo reign national to open a bank account in Costa Rica and is it necessary to do so right or away or is it easier to just use an Escrow Company to hand le the transfer of capital to pay for property purchases? In general, each Bank has the discretion to decide who it opens an account to and what they will ask for it. Obviously, there are minimum require ments such as presenting a valid identification, but the Bank will not accept opening the account if it does not feel sufficient confidence in the person and that the account will be well used. The foreigner residing in Costa Rica should have no problem opening the account in his/her name. As for foreigners without residen cy, it is usually easier if they open a company and request the account in the name of that company, demonstrating that the company has roots in Costa Rica, such as a business, a property, etc. In some cases and depending on the use that will be given to the ac count, the Bank may request tax returns and/or accounting projections.

Broker usually has a good list of properties for sale to begin with. Once the property has been selected, a preliminary nego tiation is carried out with the seller to establish the basic terms of the purchase (althou gh others could later be intro duced when the legal advisor intervenes) and then a promi se of purchase contract (also known here as “SPA” or “Sale and Purchase Agreement”) is granted which must be draf ted by the Attorney or Notary. The Purchase conditions are put in writing and the parties undertake to celebrate the sale if, after completing due diligence, it is found that the conditions required by the purchasing party are met. Typically, this contract inclu des a period during which the buyer’s legal advisors will per form due diligence and con firm those conditions. Addi tionally, it is determined which Escrow Agent will be used and the buyer is obligated to make an initial deposit that will ulti mately be applied to the price (if the purchase is made) or re turned to the buyer if during due diligence it is determined that the land does not meet the requirements and condi tions required by the purcha sing party. Finally, I would like to empha size that good due diligence is essential to ensure that the property is what works for you. Although at first glance it may seem that way, there are many cases in which due diligen ce ultimately reveals that the property is not good for what you are looking for. And it is also essential to keep track of when the due diligence period expires, since usually before it expires the selling party must be notified if there were pro blems with due diligence. If such notification is omitted, you could be forced to pur chase the property or lose the initial deposit in favor of the selling party. Is a corporation the best choice for ownership of a re sidential property purchase and what types of corpora

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