Anonymous property
How to acquire a property through a corporationWhen tourists come to Costa Rica, a lot of them are simply amazed by the beautiful natural views and they decide to by a property with the intention to live there in the future with their family.
This phenomenon has increased considerably within the last years and it is concreted in the purchase of thousands of properties on the coasts of Costa Rica and the Central Valley.
However, tourists usually have a lot of difficulties when they decide to go back to their original homes and leave the property alone. An alternative to these persons is to buy a property using a corporation.
Today, is quite common that properties like houses, condos, offices, belong to corporations. Is because that, when a person acquires the total stock (shares) of the corporation, in practice he or she becomes the owner of the property. The only step to take is having the shares endorsed into his/her name, and change the Board of Directors of the corporation. This way of closing is widely used in Costa Rica, to sell or to buy Real Estate, with great advantages, especially for foreigners.
Advantages. Here are some reasons why many foreigners prefer to buy a property using this method:
1. First of all, it is extremely difficult for those who reside outside the country to buy a property from the legal point of view because of the complicated procedures they have to face and or in order to find a trustworthy person who can represent them. Their best option will be have any appointment with a Costa Rican Consulate in order to triangulate the procedure, but this is not quite easy always since not all Consulates have the Notary Public capacity.
2. Secondly, a lot of foreigners do not like to have their names published in public records, like the Public Registry. Buying the shares of a corporation will guarantee its condition of anonominity, because the property is registered in the name of the corporation and not the real buyer.
3. A legal method, usually used by a lot of investors, is to register the properties into a corporation name to avoid the consequences of possible lawsuits, judicial procedures, etc, against them, because, in almost all these kind of procedures, the goods registered into third party corporations are not affected.
4. Open a bank account in Costa Rica can be difficult for a foreigner. However, with the acquisition of a corporation, this procedure becomes very easy, since the banks will only request the change of the Board of Directors of the corporation plus other minor requirements.
5. The acquisition of cellular lines is also an advantage using a corporation as the applicant.
6. By these means, a lot of foreigners save a lot of time, money and avoid translating themselves each time a transaction is needed.
Because all these advantages, a lot of buyers, including Costa Ricans, buy properties through a corporation.
Recommendations. Despite the benefits of buying a property through a corporation, some forethought about other issues is required.
Either the client and the consulting lawyer, must perform a due diligence over the corporation in order to verify there are no procedures against it, no debts with public or private financial institutions, that the corporation is up to date with the property taxes and the Yearly Income Tax.
The lawyer said also, that it is needed to verify that the corporation does not own any other property or goods related to it, since this could carry out further judicial problems to the new shareholder.
Lastly, acquiring a property by this method means that the new shareholder must remember to make the Tax Revenue Declaration at the end of each fiscal year, point to be considered by any Costa Rican or foreigner buying properties in Costa Rica with this option.
Contact LandCo for any further questions,
Best regards!
Francisco Molinero Hernández
LandCo®
Real Estate Legal Services
Attorneys at Law
Costa Rica
Tel: +(506) 232-4000
Lexincorp Menu Ext. 207
Fax: +(506) 232-2589
E-mail:
fmh@landcolaw.comWebsite:
www.landcolaw.com
