What's stopping you owning your dream property in Costa Rica

During our first conversations, many of our clients feel that they are not in a position to move ahead with a property investment in Costa Rica for a number of years.

They talk about a range of problems which they feel make it impossible to purchase sooner rather than later.

Just some of the problems we hear are:

- they own a property, in which they have equity, that they cannot sell because the prices have dropped

- they own a property, in which they have equity, that they do not want to sell until the prices have recovered

- they have cash locked into IRA, 401k, RRSP or other plans

- they are going through a divorce

- their funds are locked into other real assets (cars, heavy machinery, boats)

- they have limited cash available, but lots of assets



With some "out of the box" thinking, you'ld be amazed at the solutions we have come up with for clients, allowing them to have their Costa Rican dream property sooner than they thought possible.


If you have a desire to have your "piece of paradise" and have equity (even if it is apparently locked up in assets), we may just be able to come up with solutions for you.


We have a range of expert associates worldwide who can assist you.


Just contact us on info@costaricainvest.ie or +1-866-990-1123 (toll free) or Europe +353-1-272-4184 or your consultant directly and we'll talk through your particular situation, and make it happen for you.

 

CINDE to attract more Foreign Investment into Costa Rica

By the Costa Rica News

In recent years, Costa Rica has emerged as one of the most attractive and safest destinations for foreign investment in Latin America.

Costa Rica’s stable democracy, quality of educational system, strategic location, excellent business climate, quality of infrastructure, and quality of life are some of the reasons why many international companies have chosen Costa Rica as an investment site.

In 2001, Foreign Direct Investment (FDI) represented 5% of the country’s GDP and FDI per capita reached $456, according to data provided by the Costa Rican Investment Promotion Agency (CINDE).

FDI in Costa Rica is geared towards efficiency seeking investment and positioning Costa Rica as an export platform.

The government continues to make great efforts to accomplish these goals. This week, the Minister of Foreign Trade, Anabel González, travelled to Chicago with several representatives from CINDE, including General Director Gabriela Llobet, to pursue a two day agenda to promote Costa Rica as a competitive destination for foreign companies in high-technology sectors.

On Monday, González met with representatives from several Life Sciences companies that already operate in Costa Rica.

“We consider it is very important to visit the headquarters of the companies that are already established in the country in order to further strengthen our relationship with them and explain first-hand the different initiatives that we are developing in Costa Rica to promote the development of this particular sector,” said the Minister.

On Tuesday morning, CINDE organized a breakfast meeting with 30 investors and consulting firms at the downtown hotel in Chicago. During the meeting, representatives from two multinational companies that currently operate in Costa Rica shared their testimony about the benefits of investing in the country. Also, the Minister discussed the competitive advantages of Costa Rica and the evolution high-tech sectors have achieved in the country.

According to CINDE’s General Director, Gabriela Llobet, this business trip is part of the promotion strategy planned for 2012 to position Costa Rica as the best destination for foreign investment in Latin America.
“The company visits and the event we have organized will allow us to communicate relevant information to key decision makers from the big multinational companies. It will also allows us to reach out to consulting firms that give support to global companies looking for new locations to set up operations. We are trying to position Costa Rica as one of the top locations because of its strong and solid value proposition,” explained Llobet.

This trip to Chicago is one more of the promotion efforts made by the Costa Rican Government to attract Foreign Direct Investment.

Several promotion events have been organized this year, as well as company visits in China, Korea, India, Germany, North Carolina, and now Chicago.

In 2011 CINDE attracted 34 new investment projects, which together with the expansion of the existing operations, generated 7,728 new job opportunities.

Over 200 global companies are currently taking advantage of the benefits that Costa Rica offers.

Costa Rica has consolidated as a world-class location especially for high-technology multinational companies in the areas of advance manufacturing, clean technologies, life sciences, services, and others.

Read the full story in the The Costa Rica News (TCRN)

Update on HIRE Act legislation

The HIRE act will make it expensive (30% taxation) and difficult for US Citizens and US bank account holders to invest or purchase real estate outside of the USA. You can see previous posts here

The HIRE act originally stated that these taxes would come into effect on the 31st of December 2012.

The IRS has announced that it will delay the implementation of these taxes until the 31st December 2013.

Whilst this is good news our advice remains the same, if you are seriously considering a home purchase or investment outside of the USA you should move funds as soon as possible. After all you can always bring them back, should you decide not to proceed!

The time extension is good news but there are stories of banks already (incorrectly) levying the tax and of course the IRS may decide to implement this already enacted law (2010) sooner rather than later.

If you are unsure about your long term plans but want to place your funds in a secure high return CD investment see more about our program here:

http://www.costaricainvest.ie/CD_Eco_Mortgage.html

This program can also be combined with Costa Rican residency application.

If you need more information, just contact us on USA +1-866-990-1123 (toll free) or Europe +353-1-272-4184 or by e mail at info@costaricainvest.ie

Cute Baby Sloths

Plans for one of the homes in NatureWalk

Below are layout plans for one of the homes in Estancia Montana, NatureWalk 2.

Anonymous corporations may be thing of the past

By the A.M. Costa Rica staff Overlooked by many in the crush of local news is the fact that Costa Rica is about to eliminate the anonymous from the corporate structure called a sociedad anónima or S.A. The S.A. is a popular form of a corporation. Until now the shareholders of most corporations were not known unless they chose to divulge that fact. Many foreigners own corporations here that do not have their name as the responsible party. A common practice has been to name a lawyer or someone with similar business background to be the president or holder of a power of attorney to handle day-to-day affairs. Such a person representing a company does not have to own any shares in the entity. All the shares and the benefits derived from them can be held by one or many other parties. Until now the only listing of shareholders has been on the private books of the corporation. Sometimes they would be disclosed. For example, for a firm to do business with the government, the names of major shareholders must be disclosed to avoid officials bidding on major contracts. In addition, when a firm seeks to become listed as a small or medium enterprise, a designation that has some economic benefits, the names of shareholders must be disclosed. Media companies in Costa Rica also must disclose the names of shareholders each year. Not so the average firm. For that reason the S.A. could be used as a tax evading device. A U.S. citizen could send money to a Costa Rican S.A. without informing the tax authorities. Investigators would not be able to pierce the veil of the corporation. A proposed law, No. 18.041, awaiting the

signature of President Laura Chinchilla Miranda requires corporations to disclose the names of their shareholders to the Registro Nacional. This is the same bill that authorizes officials to assess a tax when the shares of corporations are transferred. Until now such a transfer was tax-free. The bill would assess a sales tax on what is being called an indirect transfer. There are a few exceptions for certain types of transfers. A.M. Costa Rica may be the only English-language news source to report this information. The bill gained final legislative approval Aug. 27, and this newspaper reported that fact in the edition the next day. Some readers have expressed surprise at the scope of the measure and the fact that there has been no obvious objection to it by the business community. Even though an anonymous corporation could be a good money laundering or tax evading device, there also are legitimate reasons for having such a corporate structure. Privacy and not alerting criminals to wealth are among the legitimate reason. The Chinchilla administration has characterized the bill as one to tighten up tax collection and to attack fraud, so the president is likely to sign it.

Earthquake update

Many within our NatureWalk family have inquired over the past 72 hrs about our safety in the recent earthquake. 

Thank you all for your concern. 

This was a large earthquake but we are pleased to let everyone know that we are fine and no damage occurred at NatureWalk or in the NatureWalk offices.   

Overall the Country of Costa Rica faired extremely well  and given that it was a 7.6 Richter scale earthquake there was no real damage.

Overall, there was unfortunately 1 fatality when the man had a heart attack from shock.

The epicenter of the quake lost power for only 4 hours and there were no power outages elsewhere with infrastructure intact.  

Within 20 minutes we were all back to business as usual with the exception of jammed cellphone service! 

It is an excellent reflection on Costa Rica's strict seismic building codes that this large quake did so little damage.

China and Costa Rica to Establish Air Connections

Costa Rica and China deepen relations with plans to establish direct air routes between China and Costa Rica to promote business and tourism between both countries.

The Government of China and the Government of Costa Rica continue to expand relations. The aeronautical authorities of China and Costa Rica signed a memorandum of understanding (MoU) to facilitate the establishment of air connections that promote tourism and trade between both countries.
This MoU was written and signed during the visit of President Laura Chinchilla, and the Minister of Tourism, Allan Flores, to China.

For Flores, this agreement represents the starting point for the successful promotion of tourism in both countries and also the strengthening this activity.

“These legal aspects between Civil Aviation of Costa Rica and the Civil Aviation Administration of China promote charter flights and regular services between both countries in order to facilitate economical and tourism exchange”, said Flores.

In addition to these negotiations on air services, the MoU includes aspects like the maintenance of operational and aviation security and cooperation agreements between the airlines.

Both parts agreed to promote alliances between airlines, including code-sharing agreements, which will guarantee unlimited cooperation between both nations.

Besides, Flores indicates that part of the main challenges of the tourism industry for attracting this market is ensuring air connectivity and preparing the sector to welcome and guide Chinese tourists in their language and with their customs, so that they see Costa Rica as a satisfactory option for vacationing.

This MoU is a previous step to the agreement on air services that is currently under negotiation between the Government of China and the Government of Costa Rica.

Read the full story on the The Costa Rica News (TCRN)

Hire Act (March 2010) may have dramatic consequences for US citizens investing abroad

The Hiring Incentives to Restore Employment (HIRE) Act was signed into law in the US in March 2010 and whilst most of the act relates to specific incentives to create and employment within the USA, there are specific parts (Foreign Account Tax Compliance or FACTA) that may have long reaching consequences for US citizens wishing to invest or own real estate abroad.

Enacted by Congress in 2010, FATCA targets non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign institutions to tell the IRS about accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold substantial ownership. To avoid withholding, a participating institution must enter into an agreement with the IRS to: 

• Identify U.S. accounts; 
• Report certain information to the IRS regarding U.S. accounts; and 
• Withhold a 30% tax on certain payments to non-participating FFIs and account holders unwilling to provide the required information. 

Foreign institutions that don’t sign an agreement with the IRS face withholding on payments, including U.S. source interest and dividends, gross proceeds from the disposition of U.S. securities, and pass-through payments.

The regulations are sweeping and the penalties for non compliance by US banks are very punitive.

What is the likely end result of these regulations?

1. US banks will levy the tax on all foreign transfers because from their point of view it will be easier "to be safe than sorry"

2. Foreign banks will not want to open bank accounts for US citizens because of the new stringent  reporting requirements.

These regulations will be enacted into law on the 1st of July 2014 (IRS has now announced a delay on implementation until the 31st December 2013 and a subsequent delay to 1st of July 2014).

So if you plan to invest abroad, the likely end result after 1st of July 2014 is that the money you wish to use to purchase your dream Costa Rican home will be subject to an additional US tax or will be monitored closely.

Is there a solution? Well the answer is to act before the  1st of July 2014.(IRS has now announced a delay on implementation until the 1st of July 2014).

The law has not yet been enacted, if it does enact on the 1st (and no commentator is suggesting it will not) and you have taken action and placed your funds abroad, you're budget is intact. If the law does not enact and you decide not to invest abroad in real estate or other investment opportunities, you can bring your funds back into the US.

For those clients who have not yet decided on a home in Costa Rica and want to keep their investment options open, we have an excellent CD Eco Mortgage Investment offering 10.95% interest and a 1 year term. See more about it here.

This CD Eco Mortgage Investment can also be combined with a residency application and you can read more about that here

You can download the HIRE act here. Page 27 is the section referring to Foreign Account Tax Compliance. Alternately a google search on the Hire act and currency control will give lots of views on this new law.

Avoid this significant reduction in your investment budget and take action now, avail of our Eco Mortgage or contact us on our website or by e mail at info@costaricainvest.ie or by phone on

USA +1-866-990-1123 (toll free) or Europe +353-1-272-4184 and we can discuss solutions specific to your needs.