Newcomers to Costa Rica Beware

Newcomers to Costa Rica are tempted by all sorts of “free” seminars to help them get settled and to make decisions on how and where to invest. Unless you were born yesterday, you know that the free lunch went out with the nickel beer. That’s not to say that you can’t learn something from these free seminars, just as long as you keep in mind that the presentation will be heavily tilted toward selling a particular product. Never let anyone pressure you into parting with your money. Always check with independent experts before considering investing, and then check out the experts.
It’s just as easy to lose money in Costa Rica as it is back home. For a stranger in a foreign land, it’s even easier. You must know what you are doing. Ray Nelson, manager of Alajuela’s Welcome Center, a firm specializing in travel, real estate and business investments, says, “My best advice is to come here for six months and look around. Study the existing businesses and find out why some are successful and why others go belly-up. Above all, don’t jump into a business just for the sake of being in business—particularly a business that you don’t know much about.”
One feels a dynamic sense of progress and excitement in Costa Rica’s atmosphere. This is the country of the entrepreneur, of wide-open opportunity, cheap land, dependable labor and honest government. Modern-day Costa Rica is reminiscent of the old frontier days of the U.S.A. and Canada, full of success stories about North Americans who’ve opted to “start all over again.” But there are also horror stories. Because of Costa Rica’s liberal attitude toward foreign business ventures and sometimes tax regulation, a surprising number of foreigners feel as though they have complete freedom to operate as they wish. Costa Rica draws more than its share of swindlers, crooks and con artists.
The Costa Rican government does what it can to keep on top of swindlers, but it’s impossible to do much more than prosecute crooks afterthe damage has been done. For this reason, look very carefully at any business deal presented to you. All too often, ostensibly honest businessmen surprise everyone by turning out to be swindlers. Make sure you have a good, English-speaking lawyer check with all the proper government agencies and verify the integrity of your deal before risking your hard-earned money.
Popular scams include: phony mutual funds, non-existent banks and so-called “tax shelter” investments; gold mines; hotels and resorts that never leave the drawing board; real estate that is sold to several people, and which doesn’t belong to the seller in the first place; and all kinds of get-rich-schemes. My attorney told of one of his clients who insisted on buying a piece of beachfront land against the lawyer’s advice. He thought the deal looked too good to be true, and it was. A turn out the seller was not only asking twice the value, but he had already sold the property to another man several years ago, but “forgot about it.” To complicate matters, the purchaser had died, and when his wife tried to sell the land to my lawyer’s client, it turns out that he had sold it to yet another person. That land will be vacant for some time.

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