What is Costa Rica Like?

Life in Costa Rica


1. How is Health Care in Costa Rica?
2. Am I moving to the jungle?
3. How Often do People Die of Poisonous Snake Bites?
4. Can Foreigners Own Real Estate/What is the Likelihood of the Government Nationalizing Foreign Property Here?
5. Can I have a Bank Account in Costa Rica? In dollars?
6. What is the climate of Guanacaste like?
7. What is the economy like?
8. How are the phone systems in Costa Rica?
9. What is restaurant etiquette like?
10. Can I bring pets into the country?
11. What is television like?
12. What is the status of the coast line in Costa Rica?

Purchasing Real Estate in Costa Rica


1. What are the Steps of Purchasing Real Estate in Costa Rica?
2. So what about special circumstances?

What is Costa Rica like?

Volcano Arenal

The top revenue generator in the Costa Rican economy is tourism. In 1999 more than a million visitors entered Costa Rica. Costa Rica is the birthplace of the term eco-tourism. Tourists come to Costa Rica to surf, bird watch, fish for big game fish such as sailfish or blue or black marlin, snorkel around coral reefs, track up the slopes of active volcanoes, go white water rafting, watch nesting turtles, go on jungle canopy tours, go horseback riding through trails in national parks or go four-wheeling on secluded dirt roads.

Costa Rica has always had a forward looking government. In 1955 Costa Rica took the far-sighted measure of protecting its natural assets when a 1.2 mile ban around every volcanic crater was declared a national park. Today Costa Rica’s national conservation area system (NISAC) covers over 125 areas - national parks, reserves, and refuges - comprising roughly 27% of the national territory. The entrance fee for all national parks is $6.00 for foreign visitors. A high consciousness for eco-tourism has resulted in carefully planned small scale lodges, private nature preserves, and biological research stations. Costa Rica is a relatively small country allowing visitors to visit beach, jungle and mountains all in one day. Guanacaste province offers the best in beach facilities as well as extensive parks and reserves. Visitor can head north from Tamarindo to witness Volcan Arenal spinning fire, experience the cloud forest or take a boat trip along the Sarapiqui then veer east to Tortugueros (amazon-style) waterways or fish at Barra Del Colorado. To escape the crowds, visitors or emigres can go south to where Costa Rica’s highest mountains loom. In the densest rain forest many animal and plant species flourish. Dominical, the Osa Peninsula and adjacent Gulfo Dulce provide endless wild life, rain forest, and water sports. Since Costa Rica abolished its army in 1949, it has been known as the mediator and pacifier in Central American conflicts. International recognition of this came in 1987 when President Oscar Arias, Costa Rica’s new President elected in 2006, was presented with a Nobel Peace prize.

The central valley still holds some 60% of the estimated total population of over 3.5 million with 36% living in San Jose’s metropolitan area. Many of the inhabitants of Guanacaste are Mestizo decedents of Chorotega Indians who have outgoing characteristics. Ticos are friendly, courteous, and often discreet with a sense of their distinctness from the rest of Latin America. Tolerance and fierce national pride are their overriding features. Because Costa Rica is blessed with a range of altitudes between two oceans it has almost all types of tropical habitat within it’s borders with the added advantage that many can be visited within a single day. From the coast with their mixture of sandy beaches, coral reefs mangrove forests, and dry tropical forests, the land rises through rain forest and cleared agricultural land to cloud forest, cloaked in mist for much of the day. The diversity of Costa Rica’s habitats is reflected in the wealth and range of its wildlife. Around 9,000 plant species (just under 5% of the total world plant list), have been found here and 1,200 are orchids. Insect life abounds. Tropical mammals such as sloths and monkeys are common and 800 species of birds live in Costa Rica. More than 50 species of hummingbird have been recorded in Costa Rica. Many other countries in the region and in the world have lost or degraded important areas for wildlife through commercial exploitation, logging or simply the pressure of a growing human population. 10% of Costa Rica’s total land is now set aside as national parks and 25% are protected areas of some sort. No fewer than 450 environmental organizations keep their watchful eyes on both the public and private sectors in Costa Rica while the government itself teaches the merits of sustainable development: investing in long term non-destructive projects that benefit the population. Environmental watchdogs raise the alarm when companies are found to contaminate rivers or when a hotel’s waste treatment is inadequate. Costa Rica’s best coffee is said to be from the central valley. Ticos claim that of the world’s 1,200 varieties of coffee bean, they make coffee that tastes as good as it smells. Costa Rica offers an enticing range of tropical fruit, vegetables and ultra fresh seafood. Costa Rica’s fertile valleys, pastures and oceans nurture a cornucopia of produce and seafood. Typical Tico vegetables include plantains, yucca, tubers, palm hearts, and chayote, a pear shaped vegetable whose flavor resembles squash.

1. How is Health Care in Costa Rica?

Although Costa Rica is relatively small and located in Central America, the health care system here is quite good. Health insurance for foreigners can be purchased through the INS (National Insurance Institute), which is the only option available since insurance is a state-granted monopoly here. It covers much of the same things that a policy would in another country, although the policies are generally much cheaper.

Prescription medications in Costa Rica are not subject to US law, and thus generics and brand names are much cheaper than in the states. In addition, antibiotics and many other more benign medications can be sold by a pharmacist without a prescription. If a prescription is needed, the consultation will be much cheaper.

Many foreigners also ask about the level of sophistication of medicine here. In San Jose, medical research occurs and many doctors study in the states as part of their training. Almost all of them speak some degree of English as well. Many foreigners take advantage of the fact that cosmetic surgery here is much more affordable and have procedures in San Jose. Foreigners generally have complex surgeries at CIMA, the private hospital located in Escazu.

Along the coast of Guanacaste there are also smaller hospitals. The two located closest to Tamarindo are located in Liberia and Nicoya. Local nationals generally travel to one or the other to deliver their babies. Both hospitals can handle emergencies, but foreigners generally choose to be transferred to San Jose. Life flights can be called in from ambulances in the area and can leave from the Tamarindo airport.

For smaller medical issues, there are local doctors and pharmacies spread out around the area. Ambulance stations can also be found just outside of Tamarindo, in Huacas, and in Brasilito.

2. Am I moving to the jungle?

Many foreigners ask about the incidence of infectious disease in Costa Rica. Although it is not unheard of, Malaria is extremely rare in this country because the country can afford to combat it. Even poorer parts of Costa Rica are still much more well off than the poorer parts of countries north of here such as Nicaragua and Honduras.

Dengue Fever, another mosquito-born illness, does occur here although it is relatively rare. Here in Guanacaste, there is less dengue because of the drier climate. Generally, mosquitoes breed faster in wetter climates. They also need stagnant water to breed, and this part of Costa Rica, and particularly the beach towns, take great care to be sure that there is as little standing water around as possible. Preventative measures can be taken such as wearing bug spray and staying in doors around dusk, when mosquitoes tend to be most active. If one does contract dengue, a fever and soreness generally ensue, with the only remedy being rest, Tylenol, and lots of fluids. Dengue is very rarely deadly, although those that contract it a second time will experience more severe effects.

3.How Often do People Die of Poisonous Snake Bites?

This question generally comes from those that have never visited Guanacaste and imagine it as a teeming jungle. Although the rain and cloud forests can be reached by car within a few hours, Guanacaste is an arid region and even the wooded areas are not nearly as dense as in other areas. We do not encounter deadly snakes or spiders in daily life here. Areas near the beach here are like areas near the beach anywhere. One will occasionally see a dead snake on the road and possibly very rarely see a live one, but like other civilized areas, for good or bad, the snakes have mostly been wiped out. In any populated area, you may occasionally encounter a venomous snake, but they are not of the aggressive variety and are not likely to bite you. Of course, do not get to close to any wild animals and stay on well-traveled paths to avoid any problems.

4. Can Foreigners Own Real Estate/What is the Likelihood of the Government Nationalizing Foreign Property Here?

These questions are usually grounded in horror stories from other Latin American countries. The government of Costa Rica is very interested in promoting foreign investment in this country, and this trend will only continue with the election of Oscar Arias, the former president and Nobel Peace Prize winner. Although the country has always encouraged foreign investment, Arias intends to liberalize many of the state-granted monopolies and considers tourism as a major factor in the country’s long term viability.

The government of Costa Rica has been a stable democracy since the 1950s, when the military was abolished. The people here enjoy a much higher standard of living on average than in other Latin American countries and have no reason to want to slay the golden goose that foreign investment has been. Costa Rica has also ratified CAFTA, the Central American Free Trade Agreement. This will open the country up further to foreign big business.

5. Can I have a Bank Account in Costa Rica? In dollars?

Foreigners can open bank accounts in Costa Rica in either a personal name or in the name of a corporation. These accounts can be in US Dollars, Costa Rican Colones, or Euros. It is generally advisable to have them in either foreign currency since the colon continues to lose value win comparison to both other currencies. To open a bank account, typically a proof of some sort of interest in the country is necessary along with a passport. This proof could be something as simple as the electricity bill for the place you are staying. A letter from an attorney on your behalf can also aid in obtaining a bank account. Your passport number serves as your identifying number in the same way a social security number would work in the states.

You can get check books, debit and credit cards, and wire to and from your bank account here. Personal checks from the states generally take 45 days to credit, so sending cashier’s checks or wiring money is generally more advisable. Some nice things about bank accounts here are that they are very internet friendly. You can pay your water, electricity and phone bill over the internet, and you can do direct deposits via internet to anyone that has an account with the same bank. In Tamarindo, most banking is done with Banco Nacional, since it has been here for a number of years, but Bank of San Jose, Banco Banex and Bank of Costa Rica have recently opened here as well.

6. What is the climate of Guanacaste like?

Located about 10 degrees north of the equator, the climate of Costa Rica is tropical. There are only two seasons: wet and dry. The dry season or verano (summer) is from December through April. The days are warm and sunny, with clear nights. The rainy season or invierno (winter) is from mid-May to November.

In Guanacaste, the rainy season is generally less dramatic. Many days start off sunny and then change into mild showers during the afternoon with the clouds drifting out to sea. This makes some for some of the most beautiful sunsets on the planet. The foliage during rainy season is very lush and grows rapidly. All of the pastures turn green.

During dry season, the weather is warmer and it almost never rains. The temperature hovers in the 90s during the day and drops to the low 80s at night. Visitors are pretty much guaranteed of having excellent weather for beach activities.

7. What is the economy like?

Since 1993 tourism has been Costa Rica’s leading earner of foreign currency, followed closely by textiles, bananas and coffee. However, with the Mammoth New Intel Plant build in 1996, microships have outtake tourism as the number one earner. Inflation averages around 13% and foreigners who keep bank accounts in Costa Rica are wise to denominate their accounts in dollars. Dollars are as commonly used in commercial establishment as are Colones the national currency.

There are more school teachers than policemen and the army was abolished in 1948.

The government contributes money to the church and religious education is part of the public school curriculum. Formal education is highly valued in this society, with a literacy rate of 93%. Life expectancy for a woman is 77 years and for a man 72.

8. How are the phone systems in Costa Rica?

International cards may be made from public telephones by calling collect, using your international calling card, or using Costa Rica’s new chip cards.

Purchasing a telephone line can be troublesome depending on where you live. If lines are available in your area, it will take several months for ICE to connect the service. Cell phone availability is at the time of this writing is quite good. New lines can be acquired with a power of attorney. If you purchase the phone and bring it to your lawyer, he or she can typically take care of getting it connected within a week. Cell phone coverage call be a bit lacking at times, but the phones work well in most metropolitan areas. Service should get better under Oscar Arias’s government also.

9. What is restaurant etiquette like?

Waiters – A 10% service charge is always included in the bill at restaurants, hotels and clubs. If you wish to leave an extra tip, it is acceptable to do so. It is fairly common practice for Ticos to not bring the bill until asked to do so. In addition, meals are often delivered in parts. Be patient.

10. Can I bring pets into the country?

You can bring your pets into the country, however, paperwork is involved as well as a fee and some patience. You must have a certification from a veterinarian stating that your pet is free of internal and external parasites. Your pets vaccinations must be up to date against rabies, distemper, leptospirosis, hepatitis and paro virus. The rabies vaccination must not be older than three years.

11. What is television like?

You will feel like you are back at home and watching the variety of English television channels available with satellite or cable. At this time, both cable companies along the northern pacific offer CNN, ESPN, and TNT in Spanish and in English. In addition, we receive HBO, Cinemax, and Cinecanal in English. The major US networks are available as well.

12. What is the status of the coast line in Costa Rica?

Costa Rica’s coastline is all public by law of the first 50 meters above the mean high tide line, defined by what is known as the 50 meter line. No one can restrict access or have a totally private beach. Maritime-terrestrial zone on 80 to 85% of the coast, the 150 meters following the 50 meter line is government lease land, also known as the Maritime Zone. Within the zone foreigners must establish five years residency to own 49% of the rights to a lease. Two loopholes include, holding a lease with a corporation that is wholey owned by another corporation that is wholey owned by a foreigner, or by having a Costa Rican hold 50% of the lease and name only.

The two biggest mistakes made by foreigners who buy real estate in Costa Rica are not property researching the title for hidden liens and not considering the access to water and electricity. These measures are easy to confirm through the National Registry and local municipality. Don’t ever take the word of a seller; investigate the property yourself also obtain a survey.

Purchasing Real Estate in Costa Rica

1. What are the Steps of Purchasing Real Estate in Costa Rica?

So you have found that perfect piece of property…

Step one of a typical real estate transaction in Costa Rica normally entails making an earnest money offer to the seller. The buyer makes an offer based on the seller’s asking price, and in order to get the ball rolling, a deposit is put in escrow as a show of good will and as motivation for the seller to take the property off the market. This escrow deposit can be held with the purchaser’s attorney, with seller’s attorney, or with an escrow agent such as Stewart Title.

Once agreements on the purchase price, terms of property transfer, and the Earnest Money Deposit Agreement has been signed by both parties, the property is considered off the market. Immediately following this agreement, the buyer’s attorneys will begin the due diligence process in which they look for any impediments to the clean transfer of the property to its new owner. In addition to other encumbrances, attorneys look for overdue taxes, liens, and title disputes. If applicable, attorneys will be studying not only the property in question, but also the corporation that owns that property.

The reason that the attorneys may need to study the corporation that owns the property is that often corporations are transferred from one owner to the other. When a foreigner own property in Costa Rica, they typically own the property in the name of an SA (Sociedad Anonima) or an SRL (Sociedad Responsibilidad Limitada). These are the equivalent of a personal corporation and a limited liability corporation respectively. Because transfer taxes of 1.25% are levied when a property changes hands and must re-registered in the central registry, properties are often transferred through the sale of the corporation that owns the property.

Imagine that you are purchasing a condominium that is owned in the name of a corporation. If that corporation is in good legal standing and owns 100% of the property in question, the owner can simply endorse all of the shares of the corporation over to you. You would then be the owner of both the corporation and the property. Another advantage to owning properties in the name of corporations for foreigners is that one of the four members of the board of directors is typically the owner’s attorney in the country, and the official address of the corporation is typically the attorney’s office. Should something come up regarding the property, the attorney will be contacting. Attorneys also typically handle paying real estate taxes for properties here and are reimbursed by the owners of the property later.

In some cases, properties cannot be transferred by the endorsement of shares of a corporation to which the property belongs. In this case, transfer taxes will have to be paid.

If the attorneys complete their due diligence and the property is in good standing and can be transferred free and clear, the closing date is set. Often real estates transactions in Costa Rica go from offer to closing within 30 days, but this is not always the case. Pre-sale deals are a notable exception. When a condo or home that is currently under construction or about to be built is purchased, a deposit usually holds the property until ground-breaking, and then payments are made when certain construction goals are met, with the final payment changing hands at closing.

Many clients wonder whether or not they will need to attend the closing of their property. In fact, closings can be scheduled without the presence of the buyer and/or seller. As in other countries, special powers of attorney can be granted so that someone (usually the attorney) can sign on your behalf. These power of attorneys are very specific and do not allow the signatory to perform any other actions on behalf of you or your corporation. Many clients prefer to actually attend their closings. After all, closings are a great excuse to get back to Costa Rica.

At the closing the documents that are signed vary depending on the mode of transfer. If the property itself is being transferred, then a transfer deed that will need to registered by a notary in the public registry must be signed. The change of ownership will appear in the public registry, which can be accessed online, within a couple of weeks. If a corporation is being transferred, then the seller will be endorsing over the stock certificates of the existing corporation to the new owner. At this point, the attorneys will celebrate a general assembly of the corporation and re-elect the members of the board of directors. The new owner will typically be the President with 2 family members or friends filling two spots on the board, and an attorney filling the fourth spot.

2. So what about special circumstances?

Houses:
Houses near the beach are very often sold furnished. Often only a few personal items leave the house with the seller. When a home is sold "furnished," an inventory list is prepared during the escrow period and approved by both parties prior to closing.

Pre-Sale Homes, Condos, etc.
Purchases of properties planned for the future or under construction usually call for a deposit and then payments based on a schedule that should be outlined in the Earnest Money Deposit Agreement. The deposit is often held in escrow until groundbreaking, but payment schedules vary from project to project.