Corporations

As a foreigner, you can purchase titled property in your name, but there are benefits of acquiring property through a Costa Rican corporation. One advantage of owning a corporation as a foreigner is that you can easily grant a power of attorney via a proxy that can be scanned and emailed. This power of attorney can be given to any individual to perform operations on behalf of the corporation, such as changing the name on a utility bill or purchasing or selling property. For that reason, you do not need to be present in Costa Rica to sign the transfer deed to buy or sell the property, and everything can be done from abroad.

There is a tax for non-domiciled sellers that is avoided by owning in a Costa Rican corporation. This tax only applies if you own your property in your name with a foreign passport and is 2.5% of the sales price. If you own your property via a Costa Rican corporation or with a Costa Rican ID (cedula), this tax does not apply. Furthermore, this tax does not apply if you occupy the property for 183 days or more per year. This tax ensures that a foreign seller will pay the capital gains tax, so the 2.5% tax must be withheld instead of the capital gains tax for the property title to be transferred. 

Lastly, it is sometimes impossible for foreigners to obtain utilities in their names, but it can be done via a Costa Rican corporation.         

A corporation can be established in a matter of a day or two, and you can select the name of the company as long as your choice is not already in use. Corporations are subject to an annual tax that will depend on whether or not the corporation is “active” or “inactive.” A corporation should be “active” if it has any income-generating activity such as vacation rentals, and the annual tax for an active company is approximately $350. An inactive company will pay roughly $200.

Two main types of corporations are usually incorporated in Costa Rica called the Sociedad Anonima (S.A.) and the Sociedad Responsabilidad Limitada or Limited Liability Company (S.R.L.).

An attorney can advise you on which structure is the most beneficial depending on your personal goals and circumstances.