Dear Friends:

As per my earlier report, the new CORPORATION LAW has been enacted and published on December 28. It will be effective starting April 1, 2012. Please take note that this law imposes a legal lien over assets if the tax is not paid, may dissolve a corporation that is not up to date and makes the principals of a company PERSONALLY LIABLE for the non payment of taxes.

The law establishes a yearly payment that differentiates between “active” and “inactive” corporations. The payment is established based on the BASE SALARY of a Court clerk. Active corporations will pay a yearly fee of ¢180,000 colones or @$355.00 usd and “inactive” a yearly amount of ¢90,000 colones @$177.00usd. For the first year the payment shall be done with the reduction of the months that have lapsed between January 1 and April-when the law becomes effective. The forms to pay have not yet been determined.

The payment is mandatory and the legal representatives of the company will be personally liable for such payment. Furthermore, the tax shall become a legal lien against any property (real estate, vehicles) that such corporations may own.

During the first 12 months from the enactment of the law, all individuals may request the National registry a certifícate that shall indicate if they are principals of any company. They will then have the opportunity to resign their positions by serving the corporate domicile with a letter –duly delivered and with evidence of such delivery. A copy of the letter shall be recorded by a notary and filed with the National registry to have such resignation approved and excepted the responsibility by the principal.

SANCTIONS AND CONSECUENCES:

The lack of payment of the tax will enable the National registry from issuing any certifícate of registration, recording any document form such corporation. Also the company may not sign any contracts with the government.

After 3 years have lapsed from the enactment of the law, without payment of the tax, the National registry shall DISOLVE the corporation. The debts derived from the law shall become a lien over the properties. It is important to point out that if such dissolution occurs, the stockholders will have to present a request for a Judge to allow the sale of assets and distribution once the pending taxes are paid

DISOLUTION OF CORPORATIONS AND TRANSFER OF ASSETS.

The law allows –having modified the Notarial Law- that Notaries (lawyers) disolve corporations if there is the approval of all the stock holders of a company, acting jointly in a general assembly. The process may be carried out within the next 3 months after the enactment of the law –April 1-without the application of local taxes.

Also-FOR INACTIVE CORPORATIONS-within this deadline, assets may be transferred from a corporate name to another company or individuals without the payment of transfer taxes.

The specifics of the application of the law will most likely be cleared up within the next month.
If you have additional questions, please let me know at: arturoblanco@jurexlaw.com

The National registry has finally issued the decree that regulates the payment of the corporate taxes.
Currently all registered corporation will have to pay a CORPORATE TAX which does make a difference if a corporation is recorded as an inactive corporation (67612.50 colones or @$135.00) and the Active corporations that pay @ $263.00 or 132225 colones). The status of active or inactive corporation is determined by the tax authorities.

Payment is to be done electronically using a Banco de Costa Rica account or payment before any Banco de Costa Rica agency.
The tax is to be paid without penalties during all April. The system does not allow to pay additional years in advance.

Closing the corporation: It is possible to dissolve the corporation via an assembly carried out by all the stock holders of the company, and transfer any asset recorded any the corporation to another company or to the individuals-as agreed in this assembly and the signature of the new owner is to be recorded in a public deed, so physical presence in Costa Rica is required.

For the following 3 months, such dissolutions exclude the payment of the tax and allows NOT to pay the transfer taxes.

As a service to my clients, I can pay the tax for you but please note that the charge for this is $50.00 and unless you had an active escrow account, the local banks charge $25.00 to receive a wire from abroad.

As I had explained earlier, If that tax is not paid for 3 consecutive years the Public Registry of Costa Rica will dissolve the corporation and the debts will be attached to the property or recorded asset owned by the corporation. Furthermore the National registry will not record any recordable document unless the tax has been paid.

I hope this clarifies how the local authorities are starting to apply the new corporate tax law.

Sincerely

Arturo Blanco esq.

VISITORS FOR COSTA RICA in the first semester 2007.

playaThe Canatur –the Costa Rican Chamber of Tourism has released the latest figures on visitors for the first semester of 2007. An increase on 6,4% over last year has been scored. A total of 832604 tourists visited Costa Rica, which is 50258 more visitors than in the same period of 2007. This figure has exceeded the prognosis of the Costa Rican bureau of tourism that estimated an increase of merely a 5%.

Most of this is due to the fact that there has been a 37% increase in the amount of international flights to the country in 2007. This is 1888 monthly international flights into Costa Rica. The main focus of arrival is now Guanacaste. Almost a third of all new visitors arrived via Guanacaste´s International airport. While San José´s flights increased in 3.14%, Guanacaste has increased in 15.66% from last years first semester. Tourism according to Canatur´s figures has generated more than $1.600 million dollars annually and represents 23% of the National income, well over traditional products such as coffee and bananas.

One can only wonder what the closing figures for 2007 –including the “high season” will bring. Meanwhile we can only say “PURA VIDA!”

In Costa Rica the tax applicable to those who have purchased properties may vary depending on the structure they have used to purchase. However, normally the following information should suffice to clarify what properties are due, when and how to pay each and explain the percentages applicable. In this website you should find enough information to assist you in this matter. Also the expertise of our tax department may clarify in detail and assist you when formal challenge is to be filed before local authorities and you can contact us here.

The property taxes:

This tax is to be collected by each Municipality and taxes the ownership of land. The value of the land encompasses the two portions that may affect the value: land and infrastructure. This tax is applicable to both rural and urban dwellings of either private or commercial use.
The tax is applicable on a yearly basis and in most cases payable per quarter (or a lump sum at the beginning of the year).

The yearly tax is the equivalent of 0.25% of the value of the property. This value is declared via an affidavit at the municipality by the owner but, may not be below the current recorded value or the Value Guidelines that the Central Government has established. The declared value remains in place for 5 years after which a new affidavit is to be filled.

A recent report issued by the Costa Rica Central Bank (and reported by La Nacion Newspaper) reveals that the first three months of this 2013 have shown an increase of direct foreign investment in the local real estate market.

The reported figures show that $377 million dollars have been invested in real estate, which is an increase that equals 90% of what was invested in all 2012. It is also reported that this is the highest figure since 2000.

Where are foreign investors doing their investment

The trend for foreign investors these first three months is to invest in Coastal area projects and properties.
In San Jose, the increase in property investment and building is directly linked to high-end condo units that also include commercial areas. This downtown projects are conceive do bring back residents to the downtown area, and create a solid investment for those who are in this type of market. As an example, the average commercial rental area is $95.00 per square meter when in the Multiplaza Mall is only $60.00 per square meter.

A new property tax law has been issued

On a personal note, the purchase of retirement homes and investment properties has indeed increased. What most investors are starting to realize however, is that hand in hand with this goes a new trend on property taxes that is a result of a very aggressive general collection policy issued by the Central Government and carried out by the local tax authorities.

That’s why it is important for every investor to learn and be aware of his duties and obligations regarding the new property tax law.
At www.arturoblancolaw we can assist you with any investment/tax question or issue you may have. You may use the link below to send your questions.

It has been said that the friendliness of the people, beautiful beaches and mountains, dreamy weather and a more affordable cost of living than in their home countries, make Costa Rica the perfect scenario for foreign retirees to consider relocating in Costa Rica.

However, to make this dream come true, there are several legal requirements for they to complete.

The key point for anyone wishing to obtain a temporary residence as a pensioner, is to prove to the Costa Rican authorities that they receive a retirement benefit or pension of no less than $1,000USD, as it’s determined in Costa Rica´s Law of Immigration (2010).

If the foreign citizen fulfills this fundamental requirement, then he/she can start with the specific procedures established by the Direction of Immigration.

The following is a list of the Immigration requirements as per the Costa Rican Authorities:

1. Demonstrate with an authentic document that they enjoy a lifelong pension or retirement benefit, which can´t be for less than a thousand dollars a month (U.S. $1,000.00) in U.S. currency or its equivalent in colones with an exchange rate determined by the Central Bank of Costa Rica. This document must be issued at the place of former domicile duly authenticated or apostilled (an apostille is a certificate that authenticates the origin of a public document and gives it international validity).

2. Fill out the Affiliation Form available at the Immigration offices and its website: www.migracion.go.cr. You can find it at the section Foreign People, subsection Residences and then in the Temporary tab.

3. Submit a letter justifying the reasons for requesting the temporary residence. Must indicate full name of the applicant, nationality, age, occupation and your notification address. The letter must be signed; you can do it in front of the immigration officer or submit the signature authenticated by a lawyer.

4. A certificate of your fingerprints must be issued by the Ministry of Public Security of Costa Rica.

5. Proof of consular registration. The requirements for this registration shall be determined at the appropiate consulate.

6. Birth certificate of the foreign person; issued in the country of birth.

7. A criminal record or certificate, issued apostilled or authenticated, and issued in the country of birth or the place where the person lived legally for the last three years. Also he/she must demonstrate the legality of their stay in that country, with a certified copy of the immigration document obtained during that period.

8. A photocopy of all the pages of the person valid passport. The photocopy must be certified in the presence of the immigration officer or by a public notary.

9. Pay $50.00 at the Bank of Costa Rica, account 242480-0, and present the receipt for that amount with the name of the foreign person as the depositor.

10. Pay ¢125 and ¢2,50 for each paper submited for the application for residence. Present the receipt with the name of the foreign person as the depositor.

11. Two recent passport-sized photos, with a white background and facing the camera.

It is important to mention that to begin the formalities, the applicant must have a valid visa and, if you enter Costa Rican territory as a tourist and want to apply for the residency, will also have to pay the equivalent in colones of $200.00 at the Bank of Costa Rica account 242480-0.

All the above documents will have to come authenticated from the birth country or perform this procedure at the Ministry of Foreign Affairs of Costa Rica; also translate them to spanish (do that with an official translator or an authorized notary).

With all the requirements complete, the retiree will be able to attend to the Dirección Nacional de Migración (Immigration Office) (for questions please call 900-1234567) to apply for the residence.