Archive for August, 2016

Why Use a Corporation to Own Property in Costa Rica?

Written by Michael Simons on . Posted in Buying and Selling Property in Costa Rica, FAQ's, Investing in Costa Rica

Corporations for Property Ownership in Costa Rica

Why use a corporation to own property in Costa Rica

Some people name them after a beach they like or a geographic structure, or something that reminds them of home.  Others jumble the letters of their children’s names.  And animals are popular, particularly, the humble iguana. 

Corporations allow you to own property in Costa Rica like this oceanfront real estate

Recent changes in corporate law no longer allow corporations to be named and they are assigned numbers automatically.  You can choose a trade name under which you want to operate however.

Regardless of what you call it, forming a local corporate entity to purchase property in Costa Rica and manage your holdings is both pratical and makes common sense.

While it is extremely easy to create a corporation in our country, it is also a smart move, which serves your interests since it will in many ways make things easier and safer for you.

Unlike the restrictive regulations found in other countries, according to Costa Rican law, these corporate entities may be fully owned by foreign citizens.

Under Costa Rican law a corporation is recognized as a distinct entity from its owners (shareholders) and is considered an entity upon its own without the entity structure passing through to the shareholders as is the case of S Corps in the United States. Thus, your Costa Rican corporation will be able to sign contracts, purchase and sell its assets, and enter into business in its own name.

The legal system allows for several specific corporate entities from which to choose.  The two most attractive and commonly used forms are the Sociedad Anonima, generally abbreviated S.A., and  a less elaborate form of the first, called Sociedad de Responsabilidad Limitada, known as S.R.L. or Ltda.

Both the S.A and the S.R.L. are limited liability corporations, meaning that its owners are only responsible for the corporation’s debts with their own personal assets up to their initial participation in the social capital, which in practice can be insignificant.

The two may be used to conduct the same type of activities as regulations do not require for you to select one or the other depending on what you plan on doing.  Each corporate type is different and you should select the one that best suits your needs.  For instance, the initial set up and administration of the S.A. is more complex than the S.R.L.  The S.A. must be managed by a board of directors, that is, at least three different individuals occupying the positions of president, secretary and treasurer, plus a fourth person acting as a comptroller.  In the S.R.L. a single manager is sufficient to conduct all corporate business according to the law.

Forming a corporation is Costa Rica, whether an S.A. or S.R.L., is a simple and formal procedure.  A corporation may be formed by as few two individuals with legal capacity, by executing a formal ariticle of incorporation deed prepared and submitted to the national registry by a Costa Rican Notary Public.  Such deed will establish the name of the corporation, indicate the names of those people appointed to represent and act on behalf of the corporation, outline the activities and by-laws of the corporation and outline the initial capital investments and corporate stock  ownership structure among the partners, if any.

The incorporation deed will also need to be filed for registration at the Commercial Section of the Public Register.  All information contained in it becomes of public access, meaning anyone can look it up. 

The two may be used to conduct the same type of activities as regulations do not require for you to select one or the other depending on what you plan on doing.  Not withstanding this, there are differences between them, and you should select the one that best suits your needs.  For instance, the administration of the S.A.is more complex than such of the S.R.L.  The former must be managed by a board of  directors, that is, at least three different individuals occupying the positions of president, secretary and treasurer, plus a fourth person acting as comptroller.  In  the S.R.L. on the other hand, a single manager  is sufficient according to the law.

The incorporation deed will also need to be filed for registration at the Commercial Section of the Public Register.  All information contained in it becomes of public access, meaning anyone can look it up.  Future changes to these by-laws must equally be recorded at the Register.

In contrast, share transfer that take place after the incorporation remain in the private sphere of the company, and must only be recorded in its shareholders registry book, well kept by the corporation and only available to third parties holding a Court order.

More generally, using a corporation to own property in Costa Rica is highly recommended as future transactions are rendered considerably easier.  Ownership through a corporation allows greater flexibility and predictability concerning land and property management, including tax and estate planning, and representation.

Costa Rican law allows you to use a corporation to own property in Costa Rica even when this entity does not conduct actual business in the country.  There are advantages when proceeding in this way, and, although it may not be the best solution in all cases, most of the time ownership through a corporation can save you money and, perhaps more importantly, spare you unnecessary headaches when it comes time to either sell or pass on the property to your heirs.

There are small annual attorney fees of around $500 to maintain the corporation.

Peninsula Papagayo Sells

Written by Michael Simons on . Posted in Costa Rica Real Estate Market Update, Golf Costa Rica, Investing in Costa Rica, Papagayo Region

Peninsula Papagayo Sells to Real Estate Development Group Gencom based out of Houston, USA.  This is exciting news!  The flagship development property of the entire Papagayo Region will no longer be run by the hands-off Schwan foundation and will be guided into it next level of new development by a seasoned resort development and finance company with significant hands-on experience bringing major resort brands to their developments.

Peninsula Papagayo Sells

The in country development team will remain the same and they will be invigorated by their new owners and partners.  Check out article that details the purchase below.  It was taken from the Costa Rica Star article called “Ritz-Carlton Investor Closes Major Real Estate Deal in Costa Rica” dated August 17, 2016 by Jaime Lopez.

MIAMI- Gencom, a leading U.S.-based international luxury hospitality and residential real estate investment and development firm, today announced the acquisition of Peninsula Papagayo Resort by a Gencom affiliate. The ownership acquired the 1,400-acre luxury master development in Costa Rica’s famed Guanacaste province for an undisclosed sum.

Anchored by the award-winning, 182-key Four Seasons Papagayo, Peninsula Papagayo includes such luxury amenities as an 18-hole Arnold Palmer-designed golf course and clubhouse, the 180-slip Marina Papagayo, and the 38,000 square foot Prieta Beach Club – all of which are recognized for offering best-in-class service via the more than 700 employees. The Four Seasons Papagayo is ranked as the only Forbes Travel Guide Five-Star Resort in Central and South America. The Guanacaste province, internationally noted as Costa Rica’s premier tourism destination, is located in the country’s northwestern region along the Pacific Ocean, bordering Nicaragua to the north.

The ownership is partnering with Costa Rican developer Sinergo Development Group to carry out the renovation and reinvigoration of the existing assets, including the Four Seasons Papagayo, and also to assist in the development of future phases. The design team also includes local architecture firm Zurcher Arquitectos and New York-based luxury interior design firm Meyer Davis. Plans for future development include branded and unbranded luxury residential real estate along with other complementary hotel brands.

“We are excited by the immediate and long-term benefits that this acquisition and further investments within the peninsula will bring to Costa Rica and the Guanacaste province, including job creation, increased tourism, and heightened global visibility for Peninsula Papagayo as a national jewel,” said Karim Alibhai, principal of Gencom. “This acquisition is part of our continued strategic response to an increased demand from elite international travelers for luxury, experience-driven vacations in prime destinations.”

As part of its commitment to the community, the group plans to invest in and continue the work of Creciendo Juntos (“Growing Together”), a local nonprofit organization that supports local high and elementary schools with programs including educational initiatives and preventative health care.

“As a native Costa Rican, I am excited by the reinvestment in Peninsula Papagayo, a vital pillar of Costa Rican tourism,” said Manuel Ardon, chief operating officer of Peninsula Papagayo. “Thanks to this acquisition, the phenomenal infrastructure of Peninsula Papagayo, which was developed in one of the world’s most spectacular geographic landscapes, will set a new standard among the other real estate and hospitality master developments in Central America, the Caribbean, and Mexico.”

The seller was represented by REH Capital Partners and the Algon Group in a strategic alliance as co-advisors.

Founded in 1987 by Karim Alibhai, Gencom is one of the nation’s leading domestic and international investment and development firms specializing in the hospitality and luxury hospitality related residential real estate sectors. Headquartered in Miami, Gencom is fully integrated and highly diversified, with expertise in virtually every aspect of development, acquisition, financing, asset management and sales of hospitality properties. Gencom has had success not only in developing, purchasing and exiting single assets and hotel portfolios, it also has been successful in creating, purchasing and growing hospitality platform investments, throughout the United States, Caribbean and Europe. For more information about Gencom, please visit http://www.gencomgrp.com

About REH Capital Partners

REH Capital Partners, LLC, is a national investment and advisory services firm primarily focused on the real estate and hospitality industries. Learn here http://howmed.net/order-levitra-vardenafil/ about Vardenafil hcl 20 mg indications. The firm is led by Frank Nardozza, its founder, and a senior executive team dedicated to fulfilling the diverse needs of clients requiring seasoned real estate and hospitality know-how, personalized attention, and highly tailored business solutions. REH Capital Partners has headquarters in Fort Lauderdale, Fla., and offices in Los Angeles. More information is available at www.rehcp.com

About Algon Group

Algon Group is a specialized financial advisory firm that provides sophisticated advisory services in M&A, financing and restructuring transactions. For more information about Algon Group, please visit www.algongroup.com

About Sinergo Development Group

Sinergo Development Group is a development and asset management firm specialized in the hospitality and real estate sectors in Costa Rica and the Caribbean. With headquarters in San Jose, Costa Rica, the company is noted for its development of the Four Seasons Papagayo among other award-winning projects.

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