Property and Corporations
When buying property, one of the first things you’ll want to do is form a corporation. This may sound strange,
but there are several advantages. corporations are used for tax shelters, hiding assets and other marginal activities, but
there is nothing at all questionable or illegal about using corporations for real estate ownership.
The procedure is this: Your attorney sets up a corporation with you owning 49% of the stock and a Costa Rican owning
the other 51%, which he signs over to you when the corporation is confirmed. The property is then registered in the name
of the corporation, not in the name of the purchaser. Under Costa Rican law, whoever has possession of the firm’s
stock certificates owns the corporation and all of its assets. Therefore, since you own the corporation, you also have control
of the house. A big tax advantage here is that should you decide to take a profit on the property, you sell the
corporation’s stock, not the house itself. From what I understand, you are not liable for Costa Rican capital gains
taxes on the property, since the real estate was never sold, only the stock certificates. Presumably, you would owe taxes on
the profit from the sale of the stock, but this would fall under a different category of taxation, and I suspect that many
never bother to report it since the stock ownership is virtually untraceable.
All of this sounds great, but do check with a qualified attorney before accepting my highly unqualified opinion as gospel truth.
I’ve never purchased property or formed a corporation, so what I relate here comes from Costa Rican lawyers and
North Americans who’ve gone this route. The next chapter gives more information about Costa Rican corporations.
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