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Due diligence in Costa Rica

 

You must do your due diligence, just like you would with any other investment, to ensure that it is a smart investment that avoids risk.

When coming to Costa Rica for the first time, you will undoubtedly be in absolute awe of its natural beauty, wonderful people, relaxing atmosphere, and incredible opportunities abound! We hear horror stories all the time. One client told me, “I came down and bought 4 properties on our first trip! Now, we can’t even find the lots we purchased!” That is a true story. They sold 2 of their lots at half price on their second trip but still have difficulty finding the other lots.

That’s where the trouble can start. When coming to CR, you must approach everything positively but cautiously, just as you would back home! They have laws, restrictions, permits, etc., just like any other modern society. Do not be fooled by the famous saying, “Oh, it’s Costa Rica…you can do what you want down here”. Once you have made your mind up that CR is to be your new home, seek out information on the following; Immigration rules and procedures, banking facilities, investigate car purchases, and the “Marchamo” (annual car tax). If you have chosen to open a business, speak with other people that have done it. They are a wealth of information.

Finding a dependable and faithful lawyer can be achieved, but mostly by references from other expats. Preferably more than one referral. As a new business owner, you are probably somewhat capitalized on liquidating your assets back home. Expect little help from the bank as you are probably not a citizen or resident yet.

There are other options available to you, such as private equity loans. Our lenders are mostly retired folk looking to collect a monthly income. We often give loans to people that may be undercapitalized or found out that Costa Rica is a bit more expensive (especially construction costs) than initially anticipated. Many people come to us for money, to expand their businesses or complete them. Some people borrow against their homes to purchase a business. We are called Gap Equity Loans to fill in the “gap” from where you are to where you want to be. By the way, we have never had a foreclosure! We accomplish this by only doing loans that make sense. We consider it imperative to be fair to the borrower and the lender. We are not interested in acquiring properties or businesses. We have over 60 years of combined experience in CR. Always do your due diligence on any company, including us. Please remember that we are guests in this beautiful country and respect the laws in place.

Remember, don’t leave your brain on the plane! Always do your due diligence by evaluating the property’s condition!

Pura Vida!

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