Anonymous property
How to acquire a property through a corporation
(more information at www.landcolaw.com)

When tourists come to Costa Rica, a lot of them are simple marveled by the beautiful natural views and they decide to by a property with the intension to live their future with their family.

This phenomenon has increased considerably within the last years and it is concreted in the purchase of thousands of properties abroad the coastline and the Central Valley.

However, tourists have, usually, a lot of difficulties when they decide to go back to their original homes. Though, an alternative to these persons is to buy a property using a corporation.

Today, is quite common that properties like houses, condos, offices, belong to corporations. Is because that, when a person acquires the total stock (shares) of the corporation, practically becomes the owner of the property. The only step to take is having the shares endorsed into his/her name, and change the Board of Directors of the corporation. This way of closing is widely used in Costa Rica, to sell or to buy Real Estate, with great advantages, especially for foreigners.

Advantages. Within these advantages, Francisco Molinero, lawyer and Notary Public of LandCo, a company offering real estate legal services, detailed the reasons why the foreigners prefer to buy a property using this method:

1. First of all, it is extremely difficult for those who reside outside the country to buy a property from the legal point of view because of the complicated procedures they have to face and or in order to find a trustable person who can represent them. Their best option will be have any appointment with a Costa Rican Consulate in order to triangulate the procedure, but this is not quite easy always since not all Consulates have the Notary Public capacity.

2. Secondly, a lot of foreigners do not like to have their names published in public records, like the Public Registry. Buying the shares of a corporation will guarantee its condition of anonymous, because the property is registered in the name of the corporation and not the real buyer.

3. A legal method, usually used by a lot of investors, is to register the properties into a corporation name to avoid the consequences of possible sues, judicial procedures, etc, against them, because, in almost all these kind of procedures, the goods registered into third party corporations are not affected.

4. Open a bank account in Costa Rica could be extremely difficult for a foreigner. However, with the acquisition of a corporation, this procedure becomes very easy, since the banks will only request the change of the Board of Directors of the corporation plus other minor requirements.

5. The acquisition of cellular lines is also an advantage using a corporation as the applicant.

6. By these means, a lot of foreigners save a lot of time, money and avoid translating themselves each time a transaction is needed.

Because all these advantages, a lot of buyers, including Costa Ricans, buy properties through a corporation.

Recommendations. However, the benefits of buy a property through a corporation takes some another issues to bear in mind, quoted Molinero.

“Either the client and the consulting lawyer, must perform a due diligence over the corporation in order to verify there are no procedures against it, no debts with public or private financial institutions, that the corporation is up to date with the property taxes and the Yearly Income Tax”.

The lawyer said also, that it is needed to verify that the corporation does not own any other property or goods related to it, since this could carry out further judicial problems to the new shareholder.

Lastly, acquiring a property by this method does not avoid the new shareholder to make the Tax Revenue Declaration to be made at the end of each fiscal year, point to be considered by any Costa Rican or foreigner buying properties in Costa Rica with this option.

From La Nación, June 18, 2005, Metro Cuadrado.