There is not much scope for doubt as to why Costa Rica is the foreign investor's haven - a non-Costa Rican enjoys the same rights when it comes to ownership of real estate property in Costa Rica as do the legit citizens of this country. Just any one who has the capacity to buy land has the legal right to ownership in Costa Rica, and this aspect is clearly reflected in the laws and well protected by the Constitution. Land ownership here does not call for citizenship or residency, or even mere presence in the country. The concept of using a corporation to own real estate property perhaps is Costa Rica's biggest indicator, to the whole of the investor fraternity spread across the world, of being a foreign investor friendly country.
While conducting the title transfer procedure, apart from the regular options of either purchasing the real estate property in the name of an individual or jointly with more than one person, there is a provision to complete the transfer of title procedure favoring a corporation. This decision should ideally be based upon the particular circumstances that govern a transfer of title and after due consideration and consultation with your attorney though.
There are several advantages of using a corporation in order to buy or sell real estate property in Costa Rica. The first of these advantages is the fact that, by transferring ownership to a corporation, the property can be protected from liabilities that may be incurred by the owner in future. The Costa Rican government honors the concept of a corporate and that the individuals behind the corporate are to be treated as separate entities. Any liabilities hence will not call for liquidation of assets held in the name of a corporation, rather than the individual itself. The other advantage is that title transfer in the name of a corporation is a legal way to avoid a transfer tax of 2.5% (of the value registered or the selling price, whichever is greater) that is otherwise levied if the property's title is in an individual's name. Hence, instead of selling a real estate property owned by an individual, all that one needs to do is sell the corporation that owns the land in order to avoid this fee.
Moreover, such a structure allows sellers and buyers to have flexibility and increased predictability on areas relating to estate planning; with the help of properly structured share ownership investor can avoid the possibility of a painful and lengthy long-distance procedure for his or her heirs. Even when it comes to efficient tax management, the more flexible rules on corporate expenses come in handy, as compared to the stricter ones that are applicable to personal ones. So also, representation becomes easier since the granting of special powers of attorney or any other type of authorization can be facilitated by way of shareholders meetings, which does not require the owners' physical presence in the country.
For advise and information on the best ways to transfer titles to a corporation and the pros and cons of doing so in your particular case, do feel free to get in touch with our consultants!