Posted on January 15, 2021
By Allan Garro – January 14, 2021
Many expats coming to live or invest in Costa Rica decide or receive advice that creating a corporation is the best way to operate and protect their investment here. There are numerous reasons why they decide to proceed with that, but establishing a business, opening a bank account, or obtaining asset protection seem to be the most common ones. The initial process of a creating a new corporation is simple, but that does not mean people understand all details and extra obligations implied, and which is the right one required for their specific purposes.
The most popular and usual types of corporations are “Sociedad Anonima or S.A”. and “Sociedad de Responsabilidad Limitada or Limitada”. There are also other types of corporations that exist, which are: 1. Empresa Individual de Responsabilidad Limitada, 2. Sociedad en Nombre Colectivo, 3. Sociedades en Comandita, which are silent partnerships and 4. Sociedad Civil or Civil Company. These types of companies are seldom used because they do not differentiate between liabilities held by the company and those held by the stockholders.
One more type of structure that can also be used here is to choose the option of those owning an existing corporation outside Costa Rica, like in Panama, Canada or USA, to proceed opening a branch in the country. According to articles 5 and 226 of the Code of Commerce, they must keep the same name, have a Costa Rican corporate ID number and also to have a local appointed legal representative. The process of opening the branch needs to be performed through a Costa Rican notary public, for which is necessary to provide proof of the existence of the corporation on a different country.
The Sociedad Anonima or S.A. it is equivalent to a standard corporation in USA and similar structures in other countries. It can be legally used on any permitted activity in the country. One important aspect to know is that this type of corporation has rights and responsibilities separate from their directors or legal representatives. After the corporation is registered it is valid to transfer the stock to any other person or corporation by endorsing the stock certificates and place the required entry on one of the legal books, but this is now subject to a newer regulation as explained later.
To register a new S.A. requires a Costa Rican Public Notary (which in the country needs to be a lawyer also) to proceed creating the articles of incorporation on a public document. To start a minimum of two stockholders are necessary, as well as to proceed appointing at least four directors, which are President, Secretary, Treasurer and Fiscal. After the incorporation, the stock can become property of one only person if that is required; also amendments or changes to the articles of incorporation require the approval of at least 51% of the voting shareholders to become valid.
In some cases, it is possible to find S.A corporations with appointed directors that current stockholders do not even know who they are. The reason is because probably only one or two persons requested the creation for a corporation and the other extra directors were appointed using the staff of the notary public or similar. In such case it is important to ensure those other directors do not have any type of power of attorney. Stockholders can remove any appointed directors and name new ones, but changes require further registration at the Registry of Corporations.
Sociedad de Responsabilidad Limitada or LLC companies might be a better choice. This type of structure is often recommended because, apart from giving the same liability separation provided by an S.A., it does not need to have a set of directors, but only a Manager as minimum. That does not prevent from appointing more managers if required. On this type of corporation, the stock cannot be transferred by simple endorsement since the rest of stockholders have the first right of refusal in any stock transfer.
Limitada companies are easier to manage and any amendments require support of 75% of the voting shareholders to be valid. They may also grant separate powers of attorney to other persons, not just to directors or managers. Using a Costa Rican Corporation is also the tool used by non-residents to provide some services or run a business that they could not establish in their name without legal status. Many other only use it for the purpose of holding assets acquired with their savings and monies earned on a different country, so their corporation has the status on Inactive for tax purposes.
The basic procedure to get an S.A. or Limitada corporation properly registered is as follows:
1. The Notary Public creates the articles of incorporation, which include the name, legal address, identification of the stockholders and appointment of directors o managers depending on the type of corporation chosen.
2. The document is submitted for registration online on the site https://crearempresa.go.cr/, where only an authorized Notary Public can submit the registration document. Also the registration taxes and payment for an official publication is completed.
3. Under normal conditions, the registration process takes 48-72 hours to complete, unless there are any corrections requested by the Registry of Corporations.
4. Once the corporation is registered, an electronic document is sent to the Notary Public showing the general information and the assigned Corporate ID number or cedula juridica and the specific number for the creation of the legal books.
5. In case of an S.A. three legal Actas books are created: a. Asamblea General or General Assembly, b. Stockholders Records or Registro de Socios and c. Board of Directors Minutes or Actas de Junta Directiva. Same applies for the Limitada except the third book Board of Directors Minutes is not required because they do not have a board.
After the registration takes place some extra obligations that need to be taken care of are:
1. Proceed registering the corporation as Active or Inactive in front of the Tax Authority or Dirección General de Tributacion.
2. Since 2017 there is a tax named Impuesto a las Personas Juridicas or Tax on Corporations, which is an annual tax imposed for the existence of the corporation. The amount to pay is approximate 69,000 colons (around US$125 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.
3. Since 2019 it is mandatory to perform a report named Final Beneficiary Report to Central Bank of Costa Rica. This report is to inform who are the stockholders of the 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. Next report is due April 2021.
4. A new regulation is taking effect on March 2021. About this one there are 2 aspects of importance to consider:
4.1 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. If an inactive corporation sells three lots that can be considered a business activity subject to capital gains and rent tax.
4.2 Most inactive corporations have a basic amount of capital stock, but also have acquired assets like real estate property with a much 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”.
Due to the new regulations involved in having a corporation, many have decided to dissolve their inactive corporation in Costa Rica. But it must be considered that transfer taxes must be paid in order to pass the assets on behalf of the stockholders or a third party. It should also be considered that if the assets are held in a personal name it is important to have a will in Costa Rica, specific to the assets acquired here. Keep a corporation still offers advantages like protecting assets from potential personal liabilities or to grant powers of attorney by having stockholders’ meetings on a different country, which can also be held virtually now. That certainly helps to take care of any urgent needs that might arise when the owners are not in the country.
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 January 13, 2021
Courtesy Roger Petersen – costaricalaw.com
Modifications to the gun control law of Costa Rica brings new limitations and stiffer sentences for violations.
The Costa Rica legislature has approved changes to the Costa Rican Gun Control Law (Ley de Armas y Explosivos Ley 7530) to further restrict the use of guns in Costa Rica. In this article, I will review the new changes to the law.
What weapons are prohibited in Costa Rica ?
Article 25 of the Gun Control Law was modified and now includes all of the following in the list of prohibited weapons in Costa Rica.
“Article 25 – Prohibited firearms, ammunition and explosivesRegarding the entry into the national territory, nationalization, manufacturing, tenure, carrying, use and marketing, are firearms, ammunition and explosives prohibited, as well as their parts and components:
- a) Those that, with a single action of the trigger, fire successively (inburst) more than one round. included are semiautomatic long arms, whose ammunition magazine has a capacity of more than ten shots, except those firearms that use ammunition with ring ignition, as well as short weapons whose ammunition loaders, whether manufactured or adapted, exceed a total capacity of seventeen rounds.
- b) Artifacts that fire projectiles or explosive charge, which explode through impact, by proximity to an objective, time device or by the effect of an external force.
- c) All conventional weapons, their parts and components, including the categories of: battle tanks, armored combat vehicles, systems of artillery, war aircraft, warships, missiles and missile launchers, according to the definitions given by the Organization of the United Nations (UN).
- d) Explosive or incendiary devices.
- e) Any type of weapon classified as mass destruction and weapons prohibited, all based on international conventions or prohibited by international law, and any device designed for the dispersion of these.
- f) High explosives
- .g) Puncturing, tracer, incendiary and explosive ammunition of any caliber and shot silencers on any firearm.
- h) All devices are capable of emitting electromagnetic pulses disabling, causing permanent damage.
- i) All devices are capable of emitting sound waves or luminous disabling beams, which cause permanent damage.
- j) The firearms contemplated within the prohibited platforms.
What are the penalties for possession of use of an illegal weapon ?
According to Article 89 of the law, the penalty for possession of an illegal weapon is 4-8 years in prison. This applies to anyone who “possesses, acquires, markets, transports, stores, enters into the national territory, nationalizes, exports, hides, fabricates, assembles, transforms, performs national or international brokerage or use of weapons prohibited by this law”
How can I legally own a gun in Costa Rica
In this section, I will review the requirements to legally own a gun in Costa Rica. This does not automatically include the right to “carry” that weapon. That has additional requirements.
Article 24 of the Regulations to the Gun Control Law spells out the requirements to own and register a gun in Costa Rica.
- Fill out the application online at www.controlpas.go.cr
2. Provide a copy of your identification document
3. Proof of no criminal convictions
4. Provide proof of fingerprinting
5. Pass the psychological exam showing mental fitness
6. Provide all documents related to ownership of the gun
7. Pass the gun handling examination
8. Payment of the application fee
You must have Permanent Residency and a digital signature card to apply for the registration of a weapon in Costa Rica.
What if i own or possess a gun that is not registered ?
If you are found to be in possession of a weapon that is permitted by law but which is not registered with the Department of Weapons and explosive you could be subject to a 3-5 year prison term according to Article 88 of the Law.
What if my weapon is registered but I don’t have a carry permit?
If you are found to be carrying a legally registered weapon but you do not have a carry permit then you could be subject to a 2-4 year prison sentence. If your carry permit has expired you will be subject to a fine of approximately 500,000 (a month Base Salary of Public Employee)
Restriction on the use of ammunition
The new law also places a restriction on the purchase of ammunition. The owner of a registered weapon may only purchase ammunition for that specific weapon.
What if your gun is lost or stolen ?
The new law imposes the affirmative action to report the theft of loss of any firearm. Article 88 TER of the law imposes a duty to any gun owner to report to the OIJ (Criminal Investigation Organism) and the Department of Weapons and Explosives the theft or loss of any weapon.
The owner has five business days (5) to file that report. Failure to file a report when required to do so will result in 10-60 day fine.
Finally, the law has a transition period of six (6 )months to allow the owners of firearms permitted by law and which are not registered to start the registration process without payment of fines and penalties.
Posted on January 13, 2021
Courtesy Roger Peterson – Costaricalaw.com
Importing a firearm to Costa Rica is not an easy ordeal. The government has a very restrictive stance against the personal ownership of firearms by individuals and imposes regulations that make it cumbersome to import firearms.
The first thing you need to know is that in order to import firearms to Costa Rica you must have legal permanent residency. If you have a temporary residency category (rentista, pensionado, inversionista) then you will not be able to import a firearm in your name. If you have permanent residency then you can import a firearm once you have obtained the necessary licensing documentation from the Costa Rica Department of Arms and Explosives. If you intend to go through the process it is also recommended that you retain a customs agent in Costa Rica that has had experience in importing firearms to guide you through the customs maze.
When you ship the firearm to Costa Rica make sure that you include all the information such as make, model, caliber, serial number in the bill of lading. When the firearm arrives in Costa Rica it will be retained at customs and the importer will get a receipt indicating that the firearm is being held by customs pending the import permit.
In order to process the import permit the applicant must be a Costa Rican or a holder of a Permanent Residency cedula. The importer must demonstrate that they have:
- No criminal record by providing a Costa Rican police clearance certificate (Certificado de Delincuencia).
- Pass the Psychology firearms ownership test
- Pass the Firearms handling and theory test
- Get fingerprinted in Costa Rica.
The importer must then inform the office of firearm registration in writing that the firearms are in Customs and the document must indicate:
- Information about the applicant.
- Documentation showing the export of the firearm from the country of origin.
- Firearm type, make, caliber, serial number, magazineAll this information must be consistent with the information contained in the import documentation.
- The CIF value of the firearm. The customs classification and weight of the firearm. Your customs agent can provide you with the classification amount.
- Name of the Customs Agent or bonded warehouse where the firearms are stored.
- Attach a copy of the invoice for the purchase of theIf it was a gift or inheritance you will likely have to include a sworn statement before a notary public indicating that.
The firearm is then physically inspected and if approved then the import permit is issued and the information is included in the Costa Rican digital customs database known as [email protected] Once it appears in the database then the importer can continue with the process of registering the weapon before the Costa Rican Department of Arms and Explosives that is the office that oversees and regulates firearms in Costa Rica.
The reality is that Costa Rica tries to discourage the importation of firearms and as such they make the process as confusing and difficult as possible to deter it. If you are going to embark in this process I would recommend you hire a customs agent or an expert in firearms registration to guide you through the process. Do not send your firearms to Costa Rica before understanding the process completely and ensuring that you qualify for importation. If you do not qualify for importation your firearms will not be released to you.
Updated on January 10, 2021
JANUARY 6, 2021 COURTESY
Costa Rica was placed in the first place as a destination for retirees in 2021, according to the annual ranking of the International Living.com publication, surpassing countries like Panama, Mexico, Colombia and Portugal.
According to the 2021 Global Retirement Index, which has existed since 1979, Costa Rica advanced, as it was in third place in last year’s ranking, behind Portugal and Panama.
This rating is based on the feedback of retirees living in each of the countries evaluated. It measures 10 variables, among which are the availability of housing, the easiness of obtaining resident visas, benefits in general, entertainment, the country’s development, climate and health system.
The measurements also include the country’s government, opportunities and cost of living in each of the nations.
For this year’s ranking, based on the average of the 10 indicators, Costa Rica obtained a score of 85.2, placing it in first place. It is followed in the ranking by Panama, with 84.4, and Mexico, with 83.5.
Colombia, Portugal, Ecuador and Malaysia also finished high in the ranking.
To justify Costa Rica’s ranking, the publication emphasized that the country offers a simple lifestyle, in a society where it is considered it to be important, and a cost of living that allows expats to maintain it.
Expatriates living in Costa Rica report, “It is easy to feel healthier, happier and less stressed here. As expats Tom and Diane Brown, originally from Washington State, expressed it from their new home in Costa Rica’s Central Valley: “We live very comfortably with our two Social Security checks and my pension. Here we can easily live on $3,000 a month, including a gardener and a maid. We also save $500 each month for travel,” the publication says.
The report continues to say: “Costa Rica attracts millions of visitors and foreign residents year-round with its tropical climate; lower cost of living; friendly locals; affordable health care; vast real estate options; and, of course, its natural beauty.”
In announcing this year’s results, the publication also features statements from Kathleen Evans, International Living’s Costa Rican correspondent. “One of the things you often hear from expatriates,” she says, “is how warm and welcoming the Ticos (Costa Ricans) are. They are wonderful people, eager to share the magic of their culture, food and traditions with foreigners.
Evans considers that a couple can live comfortably, but not necessarily extravagantly, here for about $2,000 a month. This includes renting a two-bedroom house with American amenities, air conditioning, plus food, entertainment, transportation and medical care.
In the index breakdown, however, Costa Rica is behind most of the top 20 countries in cost of living. The rating in this category is 84, compared to 87 from Mexico, 89 from Colombia, 93 from Ecuador or 91 from Malaysia.
The high rating of the other factors had a bearing on the fact that in the global index, Costa Rica ended up in first place.
Yes, according to the International Living Annual Global Retirement Index for 2021. It ranked Costa Rica as the top retirement destination followed by Panama, Mexico, Colombia, Portugal, Ecuador, Malaysia, France, Malta and Vietnam all in the top ten.
Posted on January 10, 2021
Planning your 2021 travel? Consider Costa Rica, Bloomberg says.
The U.S.-based media company published its “Where to Go in 2021,” recommending destinations “that will be especially profound” for travellers this year. Among the list of 24 is Costa Rica, a place where visitors can immerse themselves in nature and “leave no trace.”
As Bloomberg writes:
When Costa Rica began its Certification for Sustainable Tourism (CST) program in 1998, it was a world’s first. Today its Earth-friendly hotels have rippled into something of a global standard. And now they’re raising the bar higher. A massive overhaul of CST criteria planned for 2021 will inspire hoteliers to raise the bar higher and acknowledge those who already have.
Meanwhile, the government released a carbon footprint calculator last November to encourage tourism offsets. It’s also moving to protect 30% of its land under official conservation programs and encouraging other countries to do the same.
Other destinations on the list include Sweden, Australia, Antarctica, the British Virgin Islands, Senegal, the Maldives and Ecuador.
“The global economy needs a travel rebound. You could use one, too,” the story reads. “As soon as it’s safe, make your plans count with two dozen ideas to help heal the world one small step at a time.”
Posted on January 8, 2021
Courtesy Roger Peterson – CostaRicanLaw.com
What do I need to do for 2021 ?
For those of you that own a Costa Rica company or property then add these items to your 2021 list:
1. Annual Company Tax. Due by January 31, 2021. For inactive holding companies the amount is ¢69,330 (approx US$115)
2. Income Tax Returns. Due by March 31, 2021. For the first time the government is also requiring inactive companies to file an income tax return to disclose company assets even if they did not generate any income. A bill opposing this requirement has been presented in the legislature. However, if that bill is not approved in time then we will need to comply with the existing law.
3. Shareholder and Beneficial Owner Disclosure Form. Due by April 30, 2021. This is an extension due to Covid for the filing that was originally due in September of 2020 and has been extended to April 30, 2021
4. Municipal Property Taxes. For property owners the first trimester of 2021 is due March 31, 2021.
5. Luxury Home Tax. If your property is subject to the Luxury Home Tax then the filing is due by January 31, 2021.
Posted on January 2, 2021
Now that 2020 is over, it’s time to start living for the future. What does that look like for you? Chances are it might involve quitting your day job, ditching it all and moving to paradise. While many people have been able to get a taste of this new reality by working remotely in 2020, that time will soon come to end. So there’s truly no better moment to start thinking about how you can live the dream by moving to another country where the cost of living is so low that you can stop working. Since 2017, I have been providing plenty of inspiration in this column by showcasing the cheapest places to live around the globe. (You can also see past reports for 2020, 2019 and 2018 here.) In this fifth annual report, I again tapped into the experts at InternationalLiving.com, which has just released its 30th Annual Global Retirement Index for 2021. And this list isn’t just for retirees: It’s a great resource for anyone who has ever thought of moving to a country where the cost of living is considerably cheaper than in the United States.
In this year’s Global Retirement Index, International Living’s editor scored 25 top destinations across 10 categories, including cost of living, governance, climate, healthcare and more. In addition, International Living tapped into its vast network of contacts and correspondents around the globe to add real-world, practical, on-the-ground intelligence, experience and opinion.
The resulting list of top spots is packed with safe, good-value destinations where you can live a comfortable, carefree life on very little money—but in reality, the whole list is valuable. “All 25 destinations are worth your attention,” says Jennifer Stevens, International Living’s executive editor. “Whether you’re looking for a friendly, good-value city, a tropical beach, a cool, highland retreat, an historic colonial enclave or a quiet lakeside getaway, this Index can help point you to your best options on the planet today.”Read on for the lowdown on the top nine places on the list, which represent some of the cheapest—and most amazing—places to move in 2021. These are also locations where it’s easy to feel healthier, happier and less stressed than in America. And for more destinations on the Global Retirement Index—like Vietnam, which came in at Number 10, plus the individual rankings in all 10 categories for all 25 countries—you can see the full list at “The World’s Best Places to Retire in 2021.”
1. Costa Rica
Why: Coming in at the top of the list for 2021 is Costa Rica, which has been called the “Switzerland of Central America,” due to its peace-loving democracy in a region that can be plagued by political and civil unrest. In this heavenly slice of Central America, you’ll find a society that cares about its people, an affordable cost of living (including medical care), vast real estate options, natural beauty and friendly locals. “One of the things you hear often from expats is how warm and welcoming the ticos (Costa Ricans) are,” says Kathleen Evans, International Living’s Costa Rica correspondent. Unfortunately, like most places, the pandemic has dealt a harsh blow to Costa Rica’s economy and put strains on the healthcare system—even so, it’s a winner for anyone looking to live abroad. “The country remains a good long-term bet as we move towards a post-COVID world, given its natural beauty, resilient population and progressive vision,” says Evans.
Where to Move: With a dozen climate zones and hundreds of microclimates, there’s a place for everyone in Costa Rica. Many people love the temperate climate in the capital of San José and the surrounding Central Valley, while others gravitate to the beaches of Guanacaste or the jungle landscapes in the south and Caribbean side of the country.
The Cost: A single person can live comfortably for around $1,615 a month, while a couple can live on about $2,000 a month, including rent for a two-bedroom home with air conditioning, plus groceries, entertainment, transportation and healthcare.
Posted on December 20, 2020
The air terminal in Liberia, Guanacaste implemented prevention protocols that include glass separation at airline counters and checkpoints and constant sanitation and temperature measurement. Photo: Coriport
QCOSTARICA – This Saturday, December 19, the Liberia Airport in Guanacaste (LIR)received the new JetBlue flight from Los Angeles International Airport, California (LAX).
JetBlue is one of the eight airlines that returned to Costa Rica after the border closure due to the Covid-19 pandemic.
Jetblue’s maiden flight from Los Angeles landed in Liberia at 4:59 pm. In the course of the next few weeks, the airline will also resume flights from New York and Boston.
“This JetBlue airline flight from Los Angeles for the first time to Guanacaste lights up a light of hope for the tourism sector and is of enormous importance for this province and surrounding areas grossly affected by the pandemic,” said Gustavo J. Segura, Minister of Tourism.
The Minister stressed the importance of the state of California for Costa Rica, as it concentrates a significant amount of the tourist that the country seeks: with a high educational level, interested in nature, in knowing the culture of the destinations they visit and in unique experiences.
Additionally, since December 18, flights from the John F. Kennedy (JFK) airport in New York were resumed, with four flights weekly.
In the case of the direct route from Boston-Costa Rica and vice versa, it will be once a week.
The Guanacaste Airport (Daniel Oduber International Airport) estimates that passenger traffic will double in December compared to November 2020 that recorded 15,802 passengers.
Currently, eight airlines have already resumed operations to and from the Guanacaste Airport, and this strengthens the reactivation of the economy of the province that depends on tourism.
For January 8 and 9, 2021, Coriport, the terminal administrator, plans to open two new routes from Los Angeles and San Francisco, respectively.
“The opening of new routes from Los Angeles and San Francisco is another very important step since these cities are where a large number of American tourists come from, so we are directly connecting Guanacaste with the markets that most appeal to this destination,” added César Jaramillo, general manager of Coriport.
The United States is historically the main source of tourists to Costa Rica. During 2019, more than half of the tourists who entered came from the U.S.
In 2019, more foreign exchange was generated from tourism, a total of US$3.97 billion in foreign currency, according to ICT records. In addition, it employed 219,000 people directly and some 400,000 indirectly.
To enter Costa Rica, visitors must continue to meet the covid-19 requirements that, among other things, include medical insurance and a completed Health Pass.
Posted on December 16, 2020
In Costa Rica the “Law to attract remote workers and providers of international remote services”, is now a reality thanks to its approval by the National Legislative Assembly’sCommission for Tourism on December 2nd, 2020.
Its passing represents an important opportunity for international digital nomads that take the best decision of their life by relocating to the Land of Pure Life, granting them a series of benefits, including a dedicated brand-new immigration category: “Remote Worker or Provider of Remote Services Resident Visa”. This initiative aims to relaunch the Costa Rican economy, bringing to the nation funds and resources digital nomads and their family members.
The main aspects of the Law are as follows:
- It will apply to “foreign nationals who provide remunerated services remotely”, subordinate or not, and as long as the services are received outside of Costa Rica.
- They will be eligible for a “one-year resident visa, renewable for additional six months”. It is important to recall, that this visa category called “estancia visa” differs from a temporary residency and, no matter how long the person has lived in Costa Rica under the status, it cannot be converted into a permanent residency.
- It must also be noted that, “estancia visas” are not applicable to family members of the principal applicant, in this case the law states that: “the legal status can also be requested for the entire family group, including spouses, children, and even other family members”.
- To be eligible for the visa, the person and his family group must demonstrate that: “they receive an income sufficient to comply with the threshold established in the law”.
- Approval of the applications filed under the new category will benefit from an “expedite process”, which also represents an important plus considering the awfully long standard resolution times of Costa Rican Immigration Authorities.
- Another important benefit for digital nomads will be the: “total exemption from the payment of income tax in Costa Rica”.
- The new category will also allow “driver license privileges”.
Posted on December 9, 2020
Costa Rica Star – By Carol Vaughn – December 7, 2020
The paper money banknote that circulates the most in Costa Rica is the “rojo”, the red 1,000c note worth almost $2.00. Two years ago Costa Rica began making the rojo out of plastic substrate, in order to prolong its life and make it recyclable. In 2021, all Tico folding money will be made out of plastic, except the 50,000c note, which is being phased out of circulation. The rojo has won international awards for its beauty of design and artwork, featuring a Guanacaste tree, white-tailed deer, beautiful foliage and — guess how many scorpions.
As most know, the Costa Rican colon (CRC) was named after Spanish explorer Christopher Columbus, (Cristobal Colon in Spanish), who visited Costa Rica in 1502. The colon was introduced in 1896, and is issued exclusively by the Central Bank of Costa Rica. The new rojo began circulating on November 26 of last year, and is waterproof and more durable than the paper bill it replaced. All denominations of Costa Rican bills are different lengths so that the visually impaired can differentiate them. Unlike United States money, the bills are also different colors, making it easier to distinguish one from the other.
A new 2,000c and 5,000c note will begin to circulate next week, and soon all Costa Rican currency will be made of plastic substrate, which is waterproof, harder to counterfeit, and has a longer life in circulation. Pablo Villalobos, Director at BCCR, explained, “In 2017, the Banco Central began a process of revision of the family of folding bills, endeavoring to improve their durability and minimize their damage to the environment.” This revision is anticipated to save the bank about 74% by lasting longer. The life of a folding bill will go from 12 months, to 64 months. Plastic money is also harder to counterfeit.
“Although the new banknotes have adjustments in their design and in their structure of security measures to verify their authenticity and combat counterfeiting, they maintain the same characters, motifs, shades and sizes of those currently in circulation”, explained a spokesman for the Central Bank. The new bills include holograms and transparent windows to avoid counterfeit.
The plastic substrate bills will live on, recycled into benches, national park railings, trash cans and even playgrounds. The rollout of the new rojo has gone very smoothly, and concern over a possible run on money in the banks due to COVID-19, has subsided. The 50,000c will be a collector’s item, for those wishing memorabilia from Costa Rica’s folding paper bill past