In Costa Rica, it is somewhat common for real estate to be held in a corporation—of which 100% of shares are owned by a person—rather than the person owning the property directly. In this case, rather than the parties executing a transfer deed to effectuate the sale of the property, the parties execute a Share Transfer Agreement. Also, due diligence should be performed to ensure that the company is passive (used only as a holding company for the property) and does not have any undisclosed contingencies (like the presence of debt, etc.).
Owning Costa Rican property in a corporation is sometimes seen as beneficial because it may operate to separate potential personal liabilities, allow for easier transition to relatives in the event of the death of the purchaser, and/or facilitate the closing procedure. Prior to 2013, the closing costs were considerably cheaper if the transaction was effectuated through a corporation using a Share Transfer Agreement.
However, recent laws have closed this perceived loophole, and this benefit is not as advantageous as it once was. KRAIN recommends that its clients consult with an attorney to determine whether owning property through a corporation is best suited for them. KRAIN has many legal contacts throughout the country and is happy to recommend qualified and reputable attorneys upon request.
