Placing your new Costa Rica property in a corporation
Now that you’ve decided to purchase your dream home in Los Sueños Resort, you’ll need to know a few things about the easiest way to go about it, and further, how to protect your new asset.
We found some great information from Properties in Costa Rica about placing your property in a corporation:
The best way to purchase and protect your real estate assets in Costa Rica is to put them in a corporation name. Doing so simplifies the transfer process for your initial purchase, as well as any future transfers should you decide to sell at some point. The corporate structure may also facilitate other transactions and organizational matters related to your Costa Rica real estate investment.
The usual limited liability company (“Sociedad Anónima” or “S.A”.) has to be incorporated by at least two people in front of an official Notary Public of Costa Rica. Once incorporated, the shares are eligible to be transferred, thus rendering it legally possible to keep all the shares of a corporation in one person’s name.
You need to choose an original name that is different than any other existing corporate name. You must then appoint a Board of Directors, with a minimum of three members: President, Treasurer and Secretary; it’s probably a good idea to choose someone you know and trust for these positions. You will also need to appoint a Comptroller.
If the property you are buying is already in a corporation, it is allowed that the initial incorporators retain those positions; however, as stated earlier, it may be wise to choose people you know for these positions as rounding up strangers for signatures if the future need arises could prove difficult.
Other important aspects to be decided upon are the following:
- Capital amount of the corporation (the higher the capital, the more registration taxes that must be paid)
- Number of shares composing such capital (Shares cannot be divided according to Costa Rican law, thus it is advisable to have a number of shares that would permit future distributions of the company)
- The representation of the newly formed company (there must be at least one representative of the company with powers of attorney to act on its behalf. However, at the time of incorporation, or later on, the powers of the company’s representatives may be limited. For example, to specific actions or amounts).
Costa Rica has what is commonly referred to as a “hybrid” corporate system. The incorporation deed, as well as all changes to the company’s by-laws, must be recorded in the Public Registry, where they are accessible to the public. All transfers of the company’s shares, however, are recorded in the Shareholders Registry Book, which is kept by the corporation and is only available to company shareholders and officials; other parties can only review it with a court order.
If all this information seems a bit overwhelming, don’t worry. Our experts at HRG Properties and Rentals can help guide you through the process of purchasing real estate in Los Sueños, advise you on the best lawyers to work with, and answer any questions you may have. Reach out today to find out more about buying property in Los Sueños Resort.