--- title: The advantages of buying property through a Costa Rican Corporation description: The vast majority of investors opt to purchase property in Costa Rica through an Anonymous Corporation called a Sociedad Anonima (S.A.). This protect --- [![Pacific Lots Logo](https://www.pacificlots.com/hs-fs/file-15430026-jpg/images/logo_top_of_page11.jpg)](https://www.pacificlots.com/) [![Pacific Lots](https://www.pacificlots.com/hs-fs/file-2190868005-jpg/images/Pacific-logo-final.jpg)](https://www.pacificlots.com/) ![header-mobile-banner](https://www.pacificlots.com/hs-fs/file-2189315066-jpg/images/header-mobile-banner.jpg) # Costa Rica Blog ## [The advantages of buying property through a Costa Rican Corporation](https://www.pacificlots.com/Costa-Rica-Blog/bid/39353/The-advantages-of-buying-property-through-a-Costa-Rican-Corporation) Posted by [Steve Linder](https://www.pacificlots.com/costa-rica-blog/author/steve-linder) on Thu, Apr, 29, 2010 - [Tweet](https://twitter.com/share) The vast majority of investors opt to purchase property in Costa Rica through an Anonymous Corporation called a Sociedad Anonima (S.A.).   This protects you against loss in the case of being sued if someone hurts themselves on your property.  It also makes it easier to attain services like setting up a bank account, getting a phone line, etc.... Additionally, it makes it much easier and less expensive to sell your property if you choose to do so in the future.  In that case you are not subject to paying the transfer tax. The company shares are simply transferred. Costa Rican corporations also do not pay income tax. This is a major advantage if the corporation is going to retain profits (ie. rental income) for future investment. It can also make estate planning less complicated. You can transfer or will shares of your corporation to someone else. Our tax friends in the government are now looking for holders of SA corporations, since ownership is largely annonymous.  This year it was announced that those holding ownership of an SA in Costa Rica, would be subject to up to $10,000 per year in fines for not declaring the ownership on your tax returns.  Seems to me that the government wants to know where all of our assets are all of a sudden.  This year if you reported owning a bank account abroad that contained more than $10,000 in it, you had to attach a signed PDF file of verification to your tax return.  Now back to the Costa Rican SA...  The procedure to set this up is relatively straight forward and simple.  In order to incorporate you must: 1. Draft and execute a deed or incorporation before a Notary Public. 2. Publish a notice of the incorporation in the Official Gazette and record the incorporation deed before the Public Registry. 3. Once incorporated, the corporation must request the approval of the legal and accounting books before the Tax Authorities. 4. After the books are authorized the shareholders registry book must be updated accordingly and the share (or shares) certificates must be issued and executed. One option that is often available to speed this process is for firms to provide "shelf corporations" that are already incorporated and registered.  In this case you must ensure that the corporation has not been involved in any law suites or claims against it. This process takes about 6-8 weeks for the nomination and transfer of shares as well as completing the sales act. (We take care of all this for our clients).                 The Articles of Incorporation must have: - A company name which can be in English but needs to be accompanied with its Spanish translation followed by either the words Sociedad Anonima or more commonly S.A. - Legal Domicile. The company may have branches and is allowed to do business outside of the country but must be Costa Rican based. - Legal Term. Terms may be extended or shortened and generally range from 50 to 100 years. - A Corporate Purpose. - Share Capital. There is no minimum Share Capital requirement and this is divided into common par value shares each entitled to one vote. It represents a symbolic value of the corporation but has no direct relation to the real value of the assets. -  Board of Directors consisting of a minimum of 3 individuals. - Officer Authority. - Statutory Examiner. Corporations may appoint 1 or more Statutory Examiners to watch over and ensure that all corporate rules are met as a protection of the interests of shareholders. - Registered Agent. Corporations with a legal representative not domiciled in Costa Rica must appoint a Registered Agent whose duty is to be served with administrative and court actions on behalf of the corporation. - Legal Reserve. Corporations in Costa Rica are required to assign annually 5% of net earnings to form a legal reserve up to 20% of its Share Capital. Such reserve need not be funded. - Legal Books and Record. These books must be bound and stamped by Local Tax Authorities. Limited Partnerships and General Partnerships are seldom used in Costa Rica mainly because of the personal liability and exposure to which its partners are legally subject to. Tags: [property purchase in Costa rica](https://www.pacificlots.com/costa-rica-blog/topic/property-purchase-in-costa-rica), [Costa Rican Corporation](https://www.pacificlots.com/costa-rica-blog/topic/costa-rican-corporation) ### Subscribe by Email ### Posts by popularity ### Posts by category - ["insurance Costa Rica" (1)](https://www.pacificlots.com/costa-rica-blog/topic/quotinsurance-costa-ricaquot) - [3G in Costa Rica (1)](https://www.pacificlots.com/costa-rica-blog/topic/3g-in-costa-rica) - [AARP (2)](https://www.pacificlots.com/costa-rica-blog/topic/aarp) - [Abroad (2)](https://www.pacificlots.com/costa-rica-blog/topic/abroad) - [adventure travel (2)](https://www.pacificlots.com/costa-rica-blog/topic/adventure-travel) - [affordable healthcare (1)](https://www.pacificlots.com/costa-rica-blog/topic/affordable-healthcare) - [Americans in Costa Rica (3)](https://www.pacificlots.com/costa-rica-blog/topic/americans-in-costa-rica) - [americans living outside the US (2)](https://www.pacificlots.com/costa-rica-blog/topic/americans-living-outside-the-us) - 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