Updated on June 9, 2021
An excellent article by a young couple who have lived in both countries:
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Updated: May 22, 2021
Costa Rica vs Mexico: An Honest Comparison
The biggest question all Expats around the world have is which country should we retire to; Costa Rica or Mexico?
We’ve lived in both countries for a long amount of time to judge for ourselves and have come to an honest conclusion. Both countries are fantastic options for living abroad depending on your particular needs.
Each country is filled with its own unique culture, weather, food, cost of living, and famous tourist attractions. Costa Rica and Mexico both have major downfalls that we will point out without mercy.
We’re not going to be nice so it’s time to show you the good, the bad, and the ugly. Let’s honestly compare and decide which country is better for living; Costa Rica vs Mexico.
Costa Rica vs Mexico: Cost of Living
You save a mass amount of money while living in Mexico. Other than electronics, everything is cheap in Mexico! Cheap homes, food, tours, clothes, gasoline, cars, and more. There are only 5 things cheaper in Costa Rica than in Mexico.
Even where we lived in Monterrey, the most expensive city in Mexico was extremely affordable due to the proximity of the United States. We paid less than $400 a month for rent, bought six bags worth of groceries for under $100, and used Uber as our mode of transportation for less than $3 or less to ride across the city.
In Costa Rica, everything is expensive. It’s the exact opposite of Mexico. Cars are double the price, gasoline is $5 per gallon, and living in Costa Rica is almost like living in the United States when it comes to prices.
Unless you want spiders and snakes in your home, you’ll have to pay between $700- $1,500 for rent, groceries are expensive so we shop at farmers markets and Pricesmart and still pay over $100 for just three bags of groceries, and Uber fares are $3 just to ride to the nearest bank.
Mexico is so much cheaper and we loved it! We never worried about money in Mexico, but in Costa Rica, we have to be extremely careful and only spend money on things we need.
Costa Rica vs Mexico: Safety
Costa Rica is much safer than Mexico, especially since Costa Rica doesn’t even have a military. There is a problem with petty theft, especially when tourists are occupied at the beach or at some hot springs. If you don’t park your vehicle properly and pay, it can be broken into, especially Jaco, a popular beach town in Costa Rica.
Other than those incidents, nothing happens in Costa Rica. In fact, we lived in San Jose, the main city in Costa Rica, and there were zero issues with theft or sketchy situations. We always feel safe and regularly walk at night. We often see joggers, dog walkers, and drivers enjoying a nighttime stroll.
Mexico is widely known for its bloody cartel battles. The cartel fights for control over who smuggles drugs into the United States and makes the most money. We lived in China, Nuevo Leon for over a year and it’s a border town which means it’s extremely dangerous.
We’d often lock our doors at night because the cartel blocked the roads with stolen busses, trucks, and cars to catch unsuspecting drivers, steal their money and vehicle, and sometimes kill them on sight.
Near our town, people who betrayed the cartel would either be eaten alive by dogs, cut up into pieces and thrown into an acid barrel, set on fire while being hung, or have their hearts cut out of their chest. Afterward, the cartel posts these videos online for locals in Mexico to view so they won’t make the same mistake.
We have seen these videos and they’re beyond gruesome. Women and children even get shot if they’re caught in the crossfire of a battle. It’s an extremely sad situation, so it’s never safe to walk or drive late unless you’re living at an Expat location or safe neighborhoods in Mexico.
Winner: Costa Rica
Although petty theft and robberies can still occur in Costa Rica, it’s not even close to the violence, shootings, and kidnappings that happen in Mexico.
Costa Rica vs Mexico: Air Quality
Costa Rica is filled with rainforests and jungles that contain exotic flowers, animals, waterfalls, and volcanoes. Even the main city San Jose has extremely clean air! Cars in Costa Rica go through a rigorous inspection to ensure it’s not polluting the air more than it should.
Tourists are only allowed to stay in Costa Rica for 3 months (90 days) to prevent overcrowding and pollution. There are also restrictions on driving at night to reduce the amount of air pollution. Costa Rica takes its air quality to the next level and we appreciate it.
Mexico’s air is extremely polluted with little concern about the environment. When living in Monterrey or traveling to Mexico City, we could hardly see the buildings and the mountains due to the heavy pollution.
Factories pay off the police to let them pollute the air without any expensive filtration systems or restrictions so they can produce more products and make more money. It’s a very corrupt system and Mexico cares more about making money than their own environment. Locals in Mexico don’t support pollution, but it’s not always up to them.
Tourists are allowed to stay in Mexico for 6 months (180 days) which means more people, more resources used, and more pollution. Although we enjoyed the long amount of time allowed in Mexico, it harms the environment in the long run.
Winner: Costa Rica
When it comes to air, Costa Rica is the clear winner in this battle due to its strict concern for the environment.
Costa Rica vs Mexico: Culture
Mexico’s culture includes colorful fiestas, worldwide known holidays, and fun festivals. People from across the world travel to Mexico just to enjoy Dia de Los Muertos in October and the parades we saw in Oaxaca were incredible!
Even in small towns, Mexico hangs up colorful flags and hosts live concerts with mariachi bands to celebrate basically anything! Special vendors will travel around Mexico to sell unique items specifically for the festival.
On Birthdays, holidays, Christmas, and New Years’, they’re always piñatas being cracked with carne asada cooking on the grill. Locals drink and dance on the weekends without a care in the world.
Costa Rica also has plenty of holidays, but they’re not as fun or popular. The biggest holiday in Costa Rica is Semana Santa (Easter week or Holy week) which doesn’t host any exciting festivals. In fact, stores and restaurants close down for the weekend and each Catholic church in the towns will organize an event to celebrate the resurrection of Jesus Christ.
Other than that, locals travel to the beach during Semana Santa to spend time with their family. There’s nothing wrong with this holiday, but from a tourist’s perspective, there’s not much to do other than go to church or to the beach.
Costa Rica does have two popular festivals; Fiesta de Palmares and Fiestas de Santa Cruz. These festivals consist of traditional bloodless bullfights, tons of beer, concerts, carnivals, and fireworks.
Mexico has incredibly colorful holidays packed with endless activities. There are hardly any large celebrations in Costa Rica and tourists visit Costa Rica for its nature, not its festivals.
Costa Rica vs Mexico: Nature and Beaches
Costa Rica may be smaller, but its volcanoes, hot springs, mountains, jungles, and exotic wild animals dominate Mexico.
In Costa Rica, the beaches are equally amazing, especially since it’s surrounded by lush jungles and wild monkeys. All beaches in Costa Rica are very clean, although to avoid any dangerous aquatic animals, it’s recommended to stick to the touristy beaches.
Mexico has jungles, deserts, mountains, beaches, plains, and volcanoes, but it still doesn’t compare to Costa Rica’s rainforest scene. No matter where we traveled within Mexico, it was always dry with yellow and brown grass surrounding pyramids or other tourist attractions.
Mexico’s beaches were stunning with crystal blue water and breathtaking sunsets. It’s only recommended to visit tourist beaches like Cancun since local beaches could be heavily polluted.
Winner: Costa Rica
Resorts in Mexico are massive and impressive with easy access to food and drinks, but when it comes to nature, Costa Rica wins due to its clean air and its tropical rainforest.
Costa Rica vs Mexico: Food
Mexico surpasses Costa Rica’s food when it comes to variety and flavor. Mexico has the best tacos, sweet bread, and other flavored food in the world! Street food can be found all over the country which makes it easy to grab a quick bite.
The food in Mexico isn’t always the healthiest option, but every restaurant has multiple salsas, cheap desserts, a large variety of powerful alcohol, and restaurants stay open late at night
Costa Rica has much healthier food options, and every restaurant serves a large variety of fruit drinks, but the food is extremely expensive. Unless you dine at a high-end restaurant, it won’t compare to Mexico’s food. Also, restaurants close earlier in Costa Rica so if you’re hungry late at night, you better start searching the trees for some fruit.
Also, street food does not exist in Costa Rica! Once in our life, we found street food at the plaza in Alajuela that sold grilled chicken on a stick. To find food on the go, you must find a local soda that serves Gallo Pinto, but there’s zero variety since it’s always just rice and beans.
Ticos don’t like spicy food so their salsas are weak! We ask for their spiciest salsa, and it always tastes sweet. If you enjoy spicy food, bring your own bottle of salsa from the store, or learn to make it at home because it’ll be difficult to find in Costa Rica.
Mexico has some of the best salsas in the world along with street food, desserts, and overall affordable prices at restaurants that won’t destroy your wallet.
Costa Rica vs Mexico: Weather
Costa Rica has the same weather year-round between 72 and 82 °F. There are only two seasons in Costa Rica; the dry season and the rainy season. National Geographic even named Atenas, Costa Rica as having the best weather in the world due to its near-perfect climate.
The days are warm and the nights are cool. Combined with a light breeze, fresh rain, and green trees surrounding every corner of the country, Costa Rica is a safe haven for those who dislike icy cold winters.
We lived in Mexico for over 3 years and it’s so hot! By the beaches, it’s extremely humid. States in Mexico like Guanajuato or Oaxaca had fantastic weather, but most of the state’s weather wasn’t the best.
Monterey, Mexico is on a whole new level. Their summers reach 120 °F and the winters can go below freezing! The weather was extremely bipolar in Monterrey, and with little trees and parks in many parts of Mexico, it takes more effort to go outside with extra pairs of clothes.
Winner: Costa Rica
The weather in Costa Rica is unbeatable! It’s similar to the weather of Hawaii but with more tropical nature. Overall, Mexico is dry and hot with extremely flat landscapes.
Costa Rica and Mexico are both extremely unique countries that provide quality resources for travelers and Expats. Although both countries serve their purposes, we moved from Mexico to raise our family in Costa Rica.
For our lifestyle, Costa Rica was the perfect country to raise our children surrounded by nature and a safe environment. Even so, it’s so expensive in Costa Rica that we often miss the amazing affordability in Mexico.
For some people, they’d rather live like kings with plenty of money in Mexico, and others are okay with sacrificing their money to live in a jungle paradise. We wish we had both, but you must decide what fits your lifestyle.
We didn’t sugarcoat a single detail so we hope you enjoyed this honest comparison of Costa Rica and Mexico. Good luck with your move and let us know which country stole your heart! ♥ Fun and Popular Bl
Posted on May 28, 2021
After repeated visa extensions throughout 2020 and 2021, June 2, 2021 (coming up soon) is the last extension date on visa expiries if you are here in Costa Rica on a tourist visa alone.
As a reminder, tourists who enter Costa Rica with a passport from the U.S, Canada, and EU, plus several other countries in the approved country groups, automatically received a 90-day visa stamp when entering or re-entering Costa Rica. (For clarity on which group your country falls under, check with your nearest Costa Rica Consulate or here:
In 2020 and for the first half of this year, 2021, considering COVID’s severe impacts on movement, Costa Rica extended the visa expiry dates several times, the last being up to June 2, 2021, on tourists. (September 1 for others with certain qualifying situations.)
This last visa extension date is definitely June 2, 2021, for foreigners who arrived in Costa Rica as tourists after December 17, 2019. There will be no more extensions.
Therefore, some of you will have to do a border run by June 1. Most of you in this category have waited until this coming week to maximize the 90-day visa stamp you will receive. (IE: It will get you valid out to late August.)
For an easy to read, comprehensive outline of entry, exit, or re-entry requirements, link to:
Please take your time and read this carefully. The extra 10 minutes you take can save you a world of grief.
For those of you under the following situations, your visas are extended to September 30, 2021:
1. Submitted your residency application and are awaiting approval. Always carry your Plantilla A.K.A. your Expediente, which is proof of your submission.
2. Have been approved for residency and are completing the final steps and, or awaiting your DIMEX card issuance.
3. Have an appointment for the submission of your residency applications. Always carry proof of that appointment with you.
Foreign Drivers License Validity
The validity of foreign drivers’ licenses expires on September 30, 2021 if you are awaiting approval on a submitted residency application as er Resolution 2021-000196: (Translation) GRANT A PERIOD OF GRACE to foreigners whose condition migratory can be classified as “regular”, due to the application process forchange of immigration category or extension, whose final resolution is pending resolution by the General Directorate of Migration and Foreigners; and that have also been seen affected by the implications that the Covid-19 disease has caused in servicesinstitutional public, so that they can travel through the roads with their licenses issued abroad are valid or expired as of March 20 of 2020; as long as they meet the condition established in article 33 below and concordant with Law No. 8764 “General Law on Migration and Aliens.” This period of Grace will run until September 30, 2021.
All other licenses for those here as tourists and even those with an appointment for submission of applications will see their visas expire June 21, 2021. So for those of you who wish to drive legally in Costa Rica, it is essential that you leave Costa Rica on a flight out or do a border run for a fresh 90-day visa stamp. As in the past, the validity of your foreign drivers’ license will remain tied to that visa stamp. I remind you that the 90-day visa stamp is not automatic as it was pre-COVID. The number of days issued on your visa stamp is determined by the number of days of COVID insurance your purchase.
Posted on May 20, 2021
- By Allan Garro – May 17, 2021
The current pandemic affecting the world generated an unexpected effect on the real estate market in Costa Rica. Despite travel restrictions and new requirements for tourists such as negative Covid-19 test or insurance with sufficient coverage in case of requiring extended stay due to illness; the truth is that the sale of properties has increased in recent months, especially in the areas near the coasts. In these areas it is said that it is currently a Seller’s Market considering the number of interested buyers.
The issues that become particularly important are: a. What are the costs involved in buying real estate property? b. What items should the buyer cover and what should the seller cover? c. What steps must be followed to achieve a secure transaction? d. Who chooses the lawyer-notary who will prepare the documents for the closing? e. How is the payment of the sale price made? f. What is required to carry out an adequate due diligence? This article is intended to provide a guide to help clarify those doubts and questions.
Real estate agent commission. The first thing to consider is the amount of the commission if there is a real estate agent involved. There is no specific amount set by law. However, in practice the amount that is generally used is 5% of the sales price, plus 13% VAT Tax. The commission payment is normally the responsibility of the Seller. In some cases, a higher rate is negotiated, which can reach up to 10%, when it comes to properties located in areas with little demand or that are difficult to access.
Transfer Taxes and Notary fees. There is a transfer tax equivalent to 1.5% of the sales price as well as registration stamps that add another 0.85% so both amounts add up to 2.35%. The Notary fees have a variable rate but in general terms it adds up to 1.25% of the sales price, plus 13% VAT Tax. That covers the transfer deed that is signed at closing. These amounts are usually paid by the Buyer, but nothing prevents the payment of transfer expenses and Notary fees from being negotiated differently.
In Costa Rica, the figure of the Notary Public is different from that of countries such as the United States of America and others governed by the common law system. In Costa Rica only a lawyer can be a notary public and for that reason both terms are often used as equivalents. If the buyer is paying in cash, then he or she decides which attorney to use. If buyer is obtaining financing from the Seller, then the Seller selects the lawyer, and if the buyer is obtaining a bank loan, then the Bank selects the professional.
Capital gains tax. Since July 1st, 2019 there is a capital gains tax on the sale of real estate property. Seller is responsible for the payment. The tax will be the one that results from applying the 15% rate, to the amount obtained when the initial acquisition value of the real estate is subtracted from the sales value. However, if the property was acquired before July 1st, 2019, for one time only the seller can apply a 2.25% tariff on the total sales price, which is more beneficial.
If the Seller’s personal home is being sold, that transfer is exempt from capital gains tax, even if it is registered in the name of a corporation in which the seller is the legal representative. Nor does this tax apply to donations or inheritances. If the person who is selling has the property registered in his or her name and does not have resident status, the Notary is obliged to withhold 2.5% of the sale price as partial withholding of that tax and pay it using the D-162 form available for this purpose.
Purchase agreement and due diligence. Both Seller and Buyer normally begin by signing a purchase agreement describing the conditions of the negotiation prior to closing, as well as the specific obligations of each party and the procedures in the event of non-compliance or any conflict arising. For this work, separate fees must be paid to the lawyers, which are negotiated according to the required work. There are also very experienced real estate agents who are able to provide such agreements at no additional cost.
It is also especially important to have a reasonable period of time to carry out a due diligence that allows a secure transaction. The cost of the due diligence is also negotiated separately according to the work required; the cost is usually assumed by the Buyer. The Buyer also assumes the extra costs that an inspection of existing buildings may generate, or carry out a survey of the property, the existing boundaries and if it conforms to the recorded plot map.
Some points that are usually part of due diligence are:
A. If Seller is a corporation, check that is up to date with annual tax on corporations, the final beneficiary report due to Central Bank and the local municipal property taxes.
B. If the house happens to be a luxury home subject to the Luxury Home Tax or Impuesto Solidario, confirm that is up to date with the payment.
C. Check the title with the National Registry and the recorded plot map.
D. If the property is located within a Condo project, obtain a letter from the management indicating the property is current with all HOA fees. It is also important to obtain copy of the recorded by-laws to see if there are any restrictions of importance that might affect the final decision of the Buyer.
E. In case of a lot or land without construction, obtain a letter of water availability. Depending on the area, service might be provided by AyA, the local Municipality or an ASADA association. Also, obtaining an USO DE SUELO certificate issued from the local Municipality to confirm what can be developed and any zoning restrictions that might apply.
F. It is important to have an architect or engineer performing an inspection of the constructions and disclose any potential risks or repairs needed.
G. A surveyor can be hired to verify that the existing boundaries match with the recorded plot map or plano de catastro. Also, to verify that the plot map is not overlapping another recorded property or invading special areas like indigenous reserves or the restricted zone f the maritime terrestrial zone. This last part might be skipped in case the title reflects the property is located on a scanned area, for which the wording FINCA UBICADA EN ZONA CATASTRADA will appear on the title.
This list is just a guide. Depending on the case, other things might be required to be reviewed.
Escrow agents and direct payments among the parties. Since many foreigners coming to the country to buy real estate property do not have any bank account in the country, the best tool available to send the purchase price is to use an escrow agent, duly authorized by a government entity named SUGEF. For this the parties proceed subscribing an escrow agreement with the selected agent. Next, Buyer needs to provide proper information about the origin of the funds according to a list provided by the escrow agent.
Once everything is cleared, Buyer can proceed wiring funds to the escrow agent account, including initial deposit, final purchase price, transfer taxes and legal fees. When closing takes place, the escrow agent proceeds disbursing the funds accordingly to the Seller, real estate agent, the notary and any other party involved. The cost of the service varies depending of the transaction amount, but in most cases the payments are in the range of US $1,000 – US $2,000. The cost normally is split among the parties.
The sales price money should never be sent to the bank account of the lawyer-notary selected, except if is authorized to handle funds from third parties by SUGEF. Also, if the parties agree to transfer the purchase price straight from Buyer’s account into Seller’s account, then the Buyer needs to subscribe an affidavit explaining the origin of the funds and supplying backup copies supporting that. In this case, the transfer taxes and fees can be wired straight to the bank account of the selected notary.
Paperwork required after closing. After closing takes place the notary proceeds with the registration of the title transfer in favor of the Buyer, something that normally should be completed in the following 10 – 15 days. Seller needs to keep a certified copy of the transfer dee in order to proof the origin of the transaction in front of Seller’s bank. Notwithstanding the foregoing, it is important to note that once the transfer documents are registered with the Land Registry, there are other tasks for the Buyer.
The first thing a Buyer, or their representative, should do is go to the local Municipality where the property is located and request a change of ownership in their records. This requires filling out a form updating the value of the property as well as providing other documents, such as a certificate of ownership, a copy of the plot map, and a copy of the new owner’s identification document (cedula or passport.) Thus, the tax payment receipts, and other services will show the name of the new owner.
The same procedure is required to update the owner’s name on the accounts of the utilities, such as water, electricity, cable, and the like, who provide services to the property. The new owner’s information must be filed with each separate institution providing the services by completing documents that are similar to those to be provided to the local municipality. Usually, private companies tend to ask for fewer requirements and are more flexible than public institutions to record the changes. This is the usual way things are in Costa Rica.
If the property is located within a condominium, it is important to deliver a set of the documents that prove the ownership change to the Condo Management offices. This is important not only to ensure that future bills/receipts will appear under the new owner’s name, but also so that the new owner will be informed of all meetings scheduled by the Homeowners Association, where each owner has the right to participate and have a vote in making decisions relevant to the condominium.
Well, here is a guide for buyers and sellers of real estate property in Costa Rica. There are other issues that are not included here, such as the purchase of properties located in the maritime zone, for which a Concession is required; and properties that do not yet have title, requiring a special judicial process called Possession Information. In those cases, being very careful in reviewing documents and due diligence is necessary
About the Author: Allan Garro was incorporated as a lawyer and public notary in 1996. He specializes in Litigation, Corporate, and Real Estate Law. He has also acted as an external legal consultant to Congress. He has been the author of more than 100 published English Language articles and can be reached at [email protected] or by visiting his website here.
Updated on May 6, 2021
By Garland M. Baker
Costa Rica rules and regulations often change, confusing most people. What better way to clear the panorama than to have a checklist to mark off what is okay and what is not. The best policy in this country is to avoid problems by catching them before they fester.
For those owning a company these are the important things to track: 1.) the company’s records at the Registro Nacional, 2.) the status of the company at Hacienda (the tax department) and 3.) the status of the company at the Banco Central regarding its RTBF report.
For anyone who still does not know what that is, RTBF is short for Registro de Transparencia y Beneficiarios Finales. The phrase translates into English as transparency and final beneficiaries register. The report was due in April, but the government extended the deadline to May 31 due to COVID-19.
For those owing property in their personal name or in a company, these things should also be checked: 1.) taxes at the municipality and 2.) if there is a water concession on the property, verify it is up-to-date with MINAE, the water directorate.
Here is the checklist:
The Registro Nacional is where the country keeps all the information on companies, and properties, among many other things. Anyone with a company should go to the website, open an account and buy a document called a certificación literal and check to see if the people who are part of the company are the only ones there. Sometimes others with no business being part of the entity have full power of attorney and could potentially steal all the assets. The document can also be obtained at any bank or post office for a small fee of around $10.
Most owners miss this one, and it is critical. Check a company’s status at SIT, which stands for situación tributaria. In English, this means tax situation. The system could not be simpler to use. One selects the type of identification, for companies this is a cedula jurídica, and type in that number. After answering the human verification test, the tax profile of the company will appear.
Here are the things to check: 1.) Is the company moroso, which mean behind on its tax obligations, 2) is it omiso, which means it is negligent and has not filed required tax returns and 3.) does the company have
representantes legales, or legal representatives. This last one goes back to the filing of the infamous D-140 form of years past. If that form was not filed, there will be nothing under that section. Even if the form was filed, there might be nothing there because the tax department never updated the information.
Licenciada Xochilt Quezada, a public accounting professional, said in an interview, “. . . anyone behind, negligent, or without a legal representative should contact an accountant as soon as possible because tax fines are high, but there are ways to mitigate them, if problems are caught early.”
Check a company’s status at the Banco Central is another easy task. Go to the website, type in the company’s identification cedula jurídica, click the no soy un robot (I am not a robot) question and read what it says. If the text after the company’s name states, envió la declaración, everything is fine, if the response is NO envió la declaración, the owner of the company should contact a legal professional as soon as possible. The fine for not doing so is bank breaking.
Companies and individuals owning property should also check to see if their property taxes are up to date. This is a little more tricky. Property taxes are paid at the municipality where the property is located. Some municipalities are current with technology, and the information can be obtained from their websites or at the Banco Nacional de Costa Rica (BNCR), or the Banco de Costa Rica (BCR). Others still work in the Stone Age, and a phone call to their office is necessary. A complete list of Costa Rican municipalities can be found at this link.
Most properties have AyA (city water) or Asada (community) water, but some have a well, use river water or have another type of concession. If a property has water, the bill is probably current because AyA and Asadas are relentless about turning it off when the bills are not paid. Those with a well, river water, or other type of concession can check the status of their contract with the country at MINAE by typing in the type of concession and contract number.
There it is, a checklist to stay out of trouble with the Costa Rican government. It is simple really: 1.) be sure the persons on a company are the only ones registered by checking the Registro Nacional, 2.) stay on top of taxes by periodically reviewing the information at the tax department using situación tributaria, 3.) stay friends with the Banco Central by filing the required RTBF form, and verifying it is correct, 4.) pay property taxes due at the local municipality and finally 5.) checking water concessions with MINAE.
Staying on top of these matters guarantees a better night sleep and peaceful living in Costa Rica.
Editor’s note: Garland M. Baker solves problems for expats in Costa Rica. He is a 49-year resident and naturalized citizen. Reach him at [email protected] Baker has undertaken the research leading to his articles with A.M. Costa Rica. Find the collection at crexpertise.net. A free reprint is available at the end of each piece. Copyright 2021. Use without permission prohibited.
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Tele: +506-2256-8585 • Fax: +506-2256-7575 • [email protected] This A.M. Costa Rica Reprint is free to copy, distribute, and display. Please give credit to source and authors. © 2000 – 2020 Consultantes Río Colorado S.A. and Garland M. Baker
Posted on April 15, 2021
While spending more than two weeks hiking Camino de Costa Rica, a 280-kilometer trail from Costa Rica’s Atlantic to Pacific coasts, the country’s natural beauty took a surprising backseat for Eduardo Cartin.
Cartin, a Tico, remembered the human interactions that were the highlight of his 16-day journey from the Caribbean coast to the trek’s conclusion in Quepos.
“In addition to the scenic trail, being able to experience the microclimates, the mountains, the views, the volcanoes, the tropical rainforests, the dry forests and the cloud forests was so incredible,” he said.
“But the human contact is invaluable, and it’s something very beautiful.”
And that’s Camino de Costa Rica’s goal. The coast-to-coast trail is the creation of Asociación Mar a Mar, a nonprofit with an objective to promote sustainable economic development in rural villages that typically don’t receive many tourists.
Many of the hike’s overnight stops are at families’ houses, where the group spends the evening learning the family business or participating in cultural activities.
“It was an experience full of blessings, sometimes of miracles, and of a lot of caring,” Cartin said. “Many families received us as if we were their long-lost sons. They received us as a family, to share in their houses and cultural activities.
“All the encounters with those people are priceless, because they treat you like family, like a brother. Being able to support those families […] was invaluable.”
Stops include Valle Escondido, home to members of the Cabécar indigenous group, and a community which is only accessible via boat.
“I really appreciated the aspect of bringing tourism to the rural parts of the country, and to be able to be a part of that was very meaningful to me,” said Caryn Steele, who completed the journey with her husband Keith.
The route itself is comprised mainly of rural roads, but several sections have the option to take a forest trail. Most days feature (relatively) easy hikes of about 15 kilometers, but five segments have more advanced attributes.
Along the way, hikers will experience firsthand Costa Rica’s biodiversity. Jan Tuinstra, who has lived in Costa Rica for 37 years, said a highlight was spotting a flock of about two-dozen great green macaws — a notable occurrence given the species’ recent rebound from critical endangerment.
“We saw a lot of Costa Rica that we normally don’t see,” he said, “and just sharing this with all these friends was great, great, great.
“It was an experience that anyone should do.”
Thanks Alexandro Zuniga for sharing this amazing experience.
Posted on April 14, 2021
By Allan Garro
During the next weeks, all those Expats who have a corporation in Costa Rica will have to fulfill some obligations that are relatively recent, making important to take them into account in order to avoid problems and headaches. Certainly, having a corporation is no longer as simple as it was a few years ago, but it still offers advantages, and it is a matter of organizing yourself with the fulfillment of the new obligations. Here we mention some important aspects whose compliance must be properly verified.
Tax on Corporations. Since 2017 there is an annual tax named Impuesto a las Personas Juridicas or Tax on Corporations. This tax was due in January of this year. The amount to pay was approximate 69,000 colons (around US$118 at present time) for Inactive corporations. It increases for Active corporations depending on their annual sales. Not paying this tax for three years in a row will cause that the government proceeds dissolving it. It also generates a small delinquent interest calculated on a daily basis.
Final Beneficiary Report. During April 2021 it is mandatory to perform again the Final Beneficiary Report to Central Bank. This report is to disclose the stockholders of each corporation. In case the stock belongs to another corporation it is necessary to disclose who are the stockholders on that other corporation, until persons are reached. All registered corporations must make the report, which includes corporations or SAs, Limited Liability Corporations or Limitadas, Civil Companies and Foreign Companies’ branches.
Although the information provided will not be publicly accessible, it will be for the Tax, Judicial, Public Security and other related authorities to prevent fiscal fraud, money laundering and similar activities. Every time the stock changes ownership it is necessary to proceed updating the information. Here it is important to take into account that, when more than fifty percent of the capital stock is transferred, the tax authorities can consider this as a transfer of the existing properties and collect the respective transfer tax.
The persons obligated to make the report are: The President in Corporations or SAs, the Manager on Limited Liability Companies or Limitadas, the appointed Proxy in branches of Foreign Companies and the Administrator in Civil Companies. To make the report, a digital signature certificate is required. It is a gadget similar to a credit card with a chip. This creates a problem for legal representatives who speak a different language, do not know how to use computers or do not have a DIMEX identification number.
As a way to solve the issue, it is authorized to grant a special power to another person who has a digital signature and understands Spanish to make the report. This power must be registered by a Notary Public, for which the Central Bank authorized access for notaries using their own digital signature. Failure to comply with the report has the consequence that the National Registry does not issue certifications on legal representation -Personerias- nor register documents in favor of delinquent companies, plus fines apply.
Tax Returns for Inactive Corporations. All Inactive corporations will need to file tax returns, and also report the amount of capital stock as well as any assets held by the corporation. This might sound illogic, because if the corporation is inactive the rent tax is zero. However, there is something behind this, it is a way to control capital gains. For example, if an inactive corporation sells three lots that can be considered a business activity subject to capital gains and rent tax.
Most inactive corporations have a basic amount of capital stock, but also have acquired assets like real estate property with a higher value, paid with capital contributions from the stockholders. In this case it is advised to proceed adjusting the capital stock according to the value of new assets acquired. This will help preventing tax authorities assuming that the differences in value might represent an “unjustified increase of patrimony”. Still, the Tax Man might appear checking the origin of funds used to buy any existing assets.
Initially, the deadline for filing tax returns expired March 15 2021. However, a few weeks ago the tax authorities agreed to prepare a new form, indicating that from that moment there will be an additional term of two and a half months to comply. As of this date, the form has not been issued but it is foreseeable that it will soon be ready. Important to be expecting for the new due date, which will be sometime near the middle of this year. It is time to start looking for an accountant who can assist with this new obligation.
Municipal Property Taxes. It should be remembered that the first quarter of property taxes is due. It must be paid in the local Municipality, covering from January to March. Second quarter is due starting April 1st. Since property taxes in Costa Rica are not very high, it is advisable to pay the full year in advance if possible, instead of doing it every three months, as a way to skip any applicable fines for late payment. Some Municipalities even offer discounts for prepayment.
In this way, the most relevant things that must be fulfilled in relation to all existing corporations is informed. Surprises and problems can always be avoided. One more point that is important to review is that the identification number that appears recorded for the legal representatives remains valid. This because foreigners usually when obtaining a new passport also obtain a new number that would then be different from the one registered in the corporation. It is always better when it matches properly
About the Author: Allan Garro was incorporated as a lawyer and public notary in 1996. He specializes in Litigation, Corporate, and Real Estate Law. He has also acted as an external legal consultant to Congress. He has been the author of more than 100 published English Language articles and can be reached at [email protected]
Posted on April 6, 2021
George Soriano March 26, 2021
A year into the brave new world of pandemic-related issues, it appears that some important changes to the way we live are here to stay.
One positive trend that’s expected to continue is working from home, as companies learned that this can actually increase productivity while lowering costs associated with maintaining large brick-and-mortar office spaces.
In fact, says Emergent Research, a California-based consultancy focused on small businesses, “multiple studies indicate that most firms are planning on greatly expanding their use of remote work even after the pandemic is over.”
This is also good news for the estimated 10.9 million U.S. citizens who didn’t have to fight rush hour traffic last year on their daily commute or spend as much on transportation and work clothes.
In trying to gauge how these workers felt about working from home, the international firm MBO Partners surveyed 3,687 independent writers, designers, editors and content creators, along with professionals working in IT, marketing and communication, among other professions. They found 83% of them reported feeling “happier working on my own,” with 71% saying that “working on my own is better for my health.”
We can only assume that none of those surveyed had little ones climbing over their laptops or spilling juice boxes all over mom’s and dad’s paperwork.
But the idea that all of these remote workers have to carve out a space at home to get their work done is changing.
According to MBO, the ever-evolving advances in digital tools and communication technology has made it possible for 4.8 million workers to travel while they work. Some are trading in their office chair for a lounge chair at the beach, and their home offices for co-working spaces in far flung tropical destinations.
“As long as I have good internet connection, I can work from anywhere,” says Marie Elena Hawkins, a writer and holistic health consultant who moved to Costa Rica from Tennessee a few years ago.
This subset of independent workers are often called “Digital Nomads,” since they rely on digital technology to keep up a lifestyle that allows them to see the world while they earn a living. They manage this by working from places with a similar or lower cost of living while garnering wages tied to higher-cost locations.
“It takes time to figure out how to make it all work, but the benefits greatly outweigh the drawbacks,” said Paul Butcher, a digital nomad from the UK who is currently living in Costa Rica. “Before choosing my next location, I would consider the cost of getting there and getting around, renting a place, and how much good internet and mobile service is going to cost me.”
MBO says nomads are twice as likely to be male than female and are most often millennials, although Gen Xers represent about quarter of the group. About half of nomads have a college degree, and the vast majority are “satisfied” with their lives. Some 83% are optimistic about the future, and 81% plan to continue their independent lifestyle.
“I’m the envy of my friends,” said U.S. expat David Fulton who runs a tourism outfit on Costa Rica’s Pacific coast. “They think I’m on a permanent vacation, but that’s not it at all. I go to work every day, just like they do. But when my day is over, I’m already at the beach or enjoying a spectacular view. It’s a totally different experience.”
The MBO report on the rising trend of Digital Nomadism says that approximately 17 million independent workers aspire to a digital nomad lifestyle, although the vast majority never take the plunge. However, concerns over future possible lockdowns or potential hospital stays makes traveling to wide open spaces on travelers insurance all the more attractive, especially for the uninsured.
Over the past decade, MBO notes a significant increase in demand for outsourced professional services as “organizations substantially increase their use of non-employee labor.”
A few countries in Europe are trying to cash in on this trend and attract international nomads to help boost economies that were hard hit during the pandemic. Most notably, the Portugese archipelago of Madeira is building a “digital nomad village” with the cooperation of co-working spaces, real estate, hotels and rental car companies, all working together to attract this demographic. Portugal is also creating a special visa category that will make booking extended visits to this warm ocean side spot a no-brainer.
And according to The Independent, “the Caribbean islands of Barbados and Antigua have unveiled similar schemes” to help boost their economies.
What about Costa Rica?
Last year, as lockdowns began throughout the world, the Costa Rican government made it posisble for visitors to extend the validity of tourist visas. Currently, anyone who entered the country in 2020 can stay without penalty until June 2021.
As that deadline approaches, a group of Costa Rican legislators are working to pass a new one-year temporary residency status, geared toward digital nomads.
While details may change before the project becomes law, the requirements would include proof of an average monthly income of $3,000 made from sources outside of Costa Rica, and health insurance, to cover any medical needs while in country. Acording to the bill, this new visa will be processed online and would allow nomads to bring a spouse and children, as well as apply for a six-month extension during their stay. Nomads under this immigration status will also enjoy tax-free status, meaning that they can also bring in equipment necessary for their work duty free.
The details of this new sub-category of temporary residency status are being discussed by Costa Rican legislators as this is written. But information will be posted at The Tico Times (or the website for the U.S. Embassy in Costa Rica as it becomes available.
For now, nomads who are just arriving can stay a maximum of 90 days on a tourist visa, and apply for temporary residency status in country. Many tourists opt to gain perpetual 90-day extensions by leaving the country and returning under a new tourist stamp.
For those who make a “visa run,” as they are commonly called, immigration officials will be on alert upon your return. They are mainly concerned about verifying that tourists are not working for Costa Rican businesses — and thus taking jobs away from local workers. They are also checking that tourists have enough money to support themselves while in Costa Rica and that a departure flight back to their counry of origin has already been purchased.
Is Costa Rica a good option for digital nomads?
We looked at the Nomad Index, a list of countries ranked according to the best conditions for digital nomads. The data was compiled by CircleLoop — a UK-based company offering cloud services to small businesses. The index compared the average speed for fixed broadband and mobile internet, the average price of internet service, and visa access. It also considered acceptance of migrants, average rental cost for a one-bedroom apartment and the score of each country on the World Happiness Index, among other criteria.
Costa Rica ranked 41st worldwide and fourth in Latin America behind Chile, Argentina and Brazil. What do those countries have that Costa Rica doesn’t? Chile (28) has much better Internet speed and the cost of that service is less expensive. Argentina (40) has a much lower cost of living. And Brazil (35) ranks just a bit better in most categories.
Where does Costa Rica shine? Its “happiness index” ranks the small Central American country at the top of the competition.
As far as tropical countries go, Costa Rica ranks third, behind Singapore (15) which is much more expensive than Costa Rica and Thailand (18), which has a similar cost of living, but is less open to migrants.
Becoming a digital nomad in Costa Rica
To help guide digital nomads considering long- or short-term relocation to Costa Rica, a new consultancy called Costa Rica Dream Team is offering online courses designed to take all the mystery out of living and working there.
In addition to covering details about real estate, cost of living and doing business in Costa Rica, courses explore residency, health care, entertainment, recreation, and even cultural dos and don’ts. Their digital format, supplemented with online question-and-answer webinars and insider blogs were developed for people on the go.
“We help our clients make a seamless transition to Costa Rica and enjoy a cross-cultural experience that is good for everyboody involved” said Julio Fernandez, who helped found Costa Rica Dream Team in 2020. “Too many people arrive with unrealistic expectations, get frustrated and leave. Our motto is ‘Know before you go.’ ”
At the end of the day, most nomads agree that making a nomadic lifestyle work depends on making informed decisions, being open to new experiences, and having a strong internet connection.
For those willing to make the leap, it can be an amazing adventure.
Updated on April 6, 2021
Costa Rica’s land borders have reopened to visitors as of Monday, April 5.
Tourists who do not require an entry visa will be allowed to enter the country via land border posts. This includes citizens of the United States, Canada, and others, as defined by Groups 1 and 2 of the general guidelines for entry for non-residents.
Those who require a visa (Groups 3 and 4), will only be allowed to enter Costa Rica when Costa Rican consulates begin offering such services again, on a date yet to be defined.
As part of this gradual opening of land borders, the sanitary order that required Costa Ricans, residents and people with special migratory categories to comply with a quarantine has been eliminated.
- Complete the digital epidemiological form known as the Health Pass: https://salud.go.cr/. This must be completed within the 48 hours before the trip.
- Purchase medical insurance, which must either be through INS or Sagicor, or comply with these details: US$50,000 for medical expenses, including COVID-19; US$2000 for accommodation expenses in case of quarantine for COVID-19.
Through the Health Pass, the tourist will obtain a QR code which will be verified by immigration authorities at the border.
Immigration agent will also verify continuity of travel (e.g. a plan to exit Costa Rica), economic solvency (US $100.00 per month) and passport validity.
Controlled mixed migratory flow
This first phase of land border reopening does not authorize the passage of migrants who seek to cross the region in order to reach the United States.
This so-called “controlled mixed migratory flow” enters from Panama and continues into Nicaragua and beyond. For the time being, these people should remain in shelters enabled in Panama.
Nicaraguans with jobs in Panama are authorized to pass through Costa Rica. This is enabled through “Sanitary Bubbles” operations, which have been coordinated since last year by migration authorities.
Costa Rica first closed all its borders in March 2020 as a health measure to prevent the spread of Covid-19. The maritime and air borders opened in August 2020.
Updated on April 6, 2021
Exclusive to A.M. Costa Rica
The Semana Santa holiday gave certified public accountant Kevin Chavarria, Licentiate Xochilt Quezada and this author a chance to gather and hash out the details of what is required to put on Costa Rica’s new tax return for inactive companies.
Last year the form was to be called the D-135. However, that was changed to the D-101, and then changed again to the D-101 Simplificado, which stand for simplified in English, but its official name is the D-101-2. The tax return was due March 15, but has now been extended to an undermined date because it is not ready. When it is, people will have two and a half months to comply and file the return.
The tax department says the form is to be just that, simple, with very little to fill out, just assets and liabilities. The big question is what value to put for assets like property when that asset usually has several values in Costa Rica: 1) the actual value paid, 2) the value put on the closing deed by a notary (usually not the same number because notaries put a lesser value to save clients money on transfers), 3), the Registro Nacional value, 4) the municipal value and 5) the actual market value.
The tax department states it wants the current market valuation for any assets calculated using international financial reporting standards. Most people do not have a clue how to come up with that number, and most do not want to pay an accounting professional to calculate it.
Here is a guideline for those wanting to fill out the form themselves:
Bank accounts, and other financial instruments: The balance listed as of Dec. 31, 2020, is the amount to use on the inactive tax return. If the amount is in United States dollars, it should be converted to Costa Rican colons by multiplying the dollar amount by 617.30 (the colon sell rate on Dec. 31). For example, $100 would calculate out to 61,730.00 colons.
Vehicles: Using the value listed at the Registro Nacional is a pretty safe bet for all vehicles in inactive companies. The amount is easy to obtain by logging into the Registro Nacional and selecting Consultas Gratuitas (means free lookups in English) then navigating to Bienes Muebles (moveable property), and selecting the type of vehicle from the list. A window will open asking for the vehicle number. Upon putting in the correct information, a report will be generated and the number to use on the tax return is the valor hacienda (tax value).
Properties: Using the value listed at Registro Nacional, if it is similar to the municipality value, is a good starting point to determine the amount to put on the inactive tax return. With that said, sometimes the tax value listed is way out of wack with the real value of a property because when it was purchased a notary put a low figure on the original deed of acquisition. In this case, an accounting professional should be consulted. Getting to reports for property at the Registro Nacional is as easy as it is for vehicles, but option Bienes Inmuebles (fixed assets) is selected instead of Bienes Muebles.
Other types of assets: If an asset is not listed at the Registro Nacional or in a bank or money market fund, it probably should not go on the inactive tax return unless its value is substantial, like works of art. In this case, a tax professional should be consulted to determine the correct course of action.
Costa Rica’s tax return filing system is simple to use. It is called the Administración Tributaria Virtual, or ATV for short. The problem for expats is it is all in Spanish. However, most browsers will translate all the information into almost any language instantly. Filers using the system in English, have encountered problems when setting up an account because their browser does not translate identification numbers correctly. Initially, it is best to use Spanish for the system to work properly.
After much research, and discussion, Chavarria and Lopez both agreed the tax authority is just starting out with their venture to obtain data from inactive companies and really does not have the guidelines clear. It appears the data accumulated from the D-102-2s will be cross-referenced with the information at the Banco Central received from the Registro de Transparencia y Beneficiarios Finales reports. In English, that report is referred to as the transparency and final beneficiaries register or RTBF for short.
The RTBF is due now, this month of April. Filing it, if last year’s was filed, is straightforward. There are two options: 1) copy last year’s return and make simple changes or 2) erase last year’s return and start over again.
Here are the steps: 1) sign into the Banco Central, 2) select the type of declaration to be filed, 3) select to copy or start over, 4) make changes as necessary and finally 5) click to save. It is important to note that the document is saved as a draft. To finish the process it must be submitted as complete on the main document window.
Usually, filling out tax forms is a struggle, but it appears the D-101-2 will be a breeze if one has the right data to start off. The tax people promised a simple RTBF filing, and they came through.
Remember, the D-101-2 cannot be filed yet, but will be enabled soon. The RTBF is due now for the entire month of April.