Recently Costa Rica was rated number one in Latin America for freedom of the press. In fact, the country was ranked number 19 world-wide in this category. Finland was in first place. In Latin America Uruguay was in second place and in Central America El Salvador followed Costa Rica in the rankings.

Reporters Without Borders is the agency that awarded this honor to Costa Rica. This organization has fought for press freedom on a daily basis since it was founded in 1985. In some countries a journalist can be thrown in prison for years for a single offending word or photo. Jailing or killing a journalist removes a vital witness to events and threatens the right of us all to be informed. You may view their website at: www.rsf.org.

What does this honor mean for Costa Rica? If reflects the country’s stability, democracy and respect for freedom of the press. In Costa Rica everyone can express their thoughts although not everyone agrees. It is this freedom of ideas that lead to a better quality of life for not only Costa Ricans but foreign retirees, too.

This achievement also means that the country has evolved and is sure to lead to improvements and development in other areas. Costa Ricans should feel proud for being able to express truth. This equates to real freedom. In countries like Mexico scores of reporters have been murdered for expressing their views. Reporters here don’t have to worry about reprisals for telling the truth. Indeed, we are fortunate to live in such a great country.

In Costa Rica you can reduce your month to month living expenses and live very well.

Rory is from a small town outside of Chicago. He was banking on retiring and cashing in on his real estate investments that he had made years earlier in Florida. He had about $800,000 dollars on paper plus a pension and thought that would give him a good nest egg to retire comfortably. Well you can imagine what happened to his plans when the U.S. real estate market went belly up.

Rory was faced with waiting years for the economy to recover or be proactive and try to find a solution to his problem. He needed time and a way to stretch his pension.

Fortunately, a friend, who was in a similar position, sent him an article about living and retiring abroad that ended up changing Rory’s life. The article was published by a large organization which helps people move to affordable countries around the world. Rory started to do his research by reading about Mexico, Nicaragua, Costa Rica, Panama and Ecuador. He made initial visits to all of those countries to gather information. After considering such factors as stability, climate, friendliness towards foreigners, cost of living, medical care, opportunities and more he decided on Costa Rica.

Rory ended up taking my combination relocation/retirement tour and seminar in early 2010. About two months later he made the move with my help and the resources provided by the Association of Residents of Costa Rica (ARCR). He has been here almost a year and finds he can live comfortably on his pension. If he had stayed in the U.S. he could have never made ends meet. Being an entrepreneur by nature he started a small business on the Internet which has started to supplement his income. He doesn’t expect to get rich off his venture but every little bit helps. He has also been dating a couple of nice Costa Rican women which is one of the perks for single men living in Costa Rica.

The best secondary airport in Central America was inaugurated this January in Liberia, Costa Rica. It now serves tourists going to destinations in Guanacaste, Monteverde, La Fortuna and other locations in the area. The new terminal will also be used by the many retirees and other foreigners living in the Costa Rica’s Pacific Northwest. The terminal was built at a cost of $35 million and covers an area of 23,000 square meters.

It is a vast improvement over the old terminal where passengers had to wait in long lines under the hot Guanacaste sun. Some tourists and retirees even fainted as a result. In addition, tourists had to haul their own luggage because there were no conveyor belts. The old waiting rooms were uncomfortable, muggy and had no restaurant.

The new terminal features a VIP Lounge, comfortable seating, air conditioning, restaurants, improved security, 24 counters for the different airlines and 17 immigration posts. The runway is 2,760 meters long and can accommodate the largest of airplanes. The airport can also handle up to 1500 passengers at one time. Fourteen airlines will use the new terminal.

Another benefit of the new terminal is that it has generated 1000 new jobs indirectly and directly for the area.

It helps to be familiar with the alphabet soup of regulatory agencies you will be dealing with during the permitting process. Following, a brief list:

MINAET (www.minaet.go.cr): The Ministerio del Ambiente, Energía, y Telecomunicaciones, or Minstery of Environment, Energy, and Telecommunications. This is the big cheese when it comes to environmental regulation in Costa Rica. Permits to cut down trees, drill wells, and mine anything must pass through.

SETENA: The Secretaría Técnica Nacional Ambiental, or the National Technical Environmental Secretariat. A branch of MINAET. SETENA is the bugaboo of many a would-be developer, as this is the agency that reviews the environmental impact of developments and gives them the thumbs up or thumbs down. Its infamy comes from the incredibly slow process of the environmental review. For developments that have to do a full impact study, the entire processes takes about two years, often more.

ICE: The Instituto Costarricense de Electricidad, or Costa Rican Electricity Institute. The government monopoly that controls all electricity generation and distribution and, until recently, telecommunications.

AyA: The Instituto Costarricense de Acueductos y Alcantarillados. Basically the state water utility. AyA does not have national coverage, and in many parts of the country outside the Central Valley, developers have to get water permits elsewhere.

ASADA: Asociaciones Administradoras de Sistemas de Acueductos y Alcantarillados Sanitarios, or Administration Association of Sewer and Aqueduct Systems. In some parts of the country, these are the associations that manage the water supply. They are local, and whether you have to deal with one depends entirely on where your property is located.

INVU: The Instituto Nacional de Vivienda y Urbanismo, or the National Housing and Urbanism Institute. INVU is supposedly in charge of urban planning, meaning that all condominium and subdivision developments need its seal of approval.

ICT: The Instituto Costarricense de Turismo, or the Costa Rica Tourism Board. Anything that has to do with the Maritime Zone (i.e. – coastal land within 200 m. of high tide) happens through the ICT. Also, permits for hotel and restaurant operations.

Ministerio de Salud: The Health Ministry. Salud oversees everything having to do with public health, including wastewater disposal and water treatment, as well as health certifications for hotels and restaurants.

CFIA: Colegio Federado de Ingenieros y Arquitectos, or the Federated Association of Engineers and Architects. This government-sanctioned professional association must give the OK to all construction projects. The Association is primarily concerned with technical design issues.

There is no one, single way to do the permitting process, and there is no single entry point. How you do permitting will depend a lot on who you hire and how much you’re willing to spend. Many of the procedures can be carried out in parallel, either legally or extra-legally. Permitting any sizable construction project, however, is not a do-it-yourself experience, and for the most part you’ll start out by hiring the professionals you will need for the process.

After drawing up your construction plans, you’ll be doing permitting in an attempt to please basically four government entities. The Colegio Federado de Ingenieros y Arquitectos (CFIA) will want to know that your construction plans include all the basic elements that construction plans should. They will also want to know that for the project, you have hired professionals registered with the CFIA. The Secretaria Técnica Nacional Ambiental (SETENA) needs to be satisfied that your construction project will not significantly damage the environment or the local community. If you’re doing a development of a high-enough density, the Instituto Nacional de Vivienda y Urbanismo (INVU) has a whole list of different permits and go-aheads you’ll have to get from different government agencies before it will give your project the green light. And finally, the local municipality where you are building will want you to present the CFIA, SETENA, and INVU approvals (plus perhaps a few others) before it will grant you your construction permits.

An important point is that each municipality requires different documents for the granting of the final construction permits. But even if the municipality grants you a construction permit without one of the permits you need from some branch of the central government bureaucracy – say, the environmental certification – you still need that permit. This redundancy of authority is one of the curiosities (some would say absurdities) of the Costa Rican system: Just because a builder has construction permits from a municipality does not mean the construction is legal. The other permits for the construction must be obtained regardless of what the municipality says or you could be shut down at any moment by a central government regulator. Keep this in mind if you’re tempted to bribe a municipal official to get your permits. That ill-gotten permit won’t do you much good if the central government decides to bring down the hammer.

At the same time, however, the bitter irony (as long-time developers in Costa Rica will tell you) is that there are so many regulations and restrictions administered independently of one another by so many different branches of the Costa Rican bureaucracy that sometimes you don’t fully comply with the law even when you want to. Do your best.

A final important principle to keep in mind as you approach the permitting process is that land in Costa Rica is under the Napoleonic legal regime, not the common law regime found in the United States and Canada. In practice, that means that while you technically own the land, you don’t own any natural resource on top of it or below it. Trees, mineral deposits, well water, rivers, lakes, springs, wildlife, and all the rest are property of the State. The principle to follow, therefore, is that if you are going to remove, use, or modify any of these things on “your” property, there is probably a permit or concession you will have get from somewhere.

From 2006 to 2009 there was an incredible explosion in construction in Costa Rica. Don’t let that fool you: Costa Rica is still one of the most difficult countries in the world to build in. In addition to being expensive in terms of fees and materials, the main hang-up that developers and home-builders face is the enormous variety of permits that must be obtained before building. To develop a property larger than 500 m2, you need the OK from at least half a dozen separate entities, probably more. Developing a subdivision or a condominium adds another layer of oversight from another regulatory body, and when all is said and done you’ll probably need to have hired at least seven state-certified professionals, including an architect, a civil engineer, a topographer, an environmental engineer, an archaeologist, an anthropologist, and a biologist. All that, and you haven’t even started construction yet.

All told, the permitting process for a small development can take anywhere from a six months to several years and cost the developer some percent of the total value of the project. Construction of individual homes on properties covering less than a half a hectare must pass through a similar process, but with substantially less regulation.

This first part article seeks to guide the amateur developer or home builder through the thicket of permitting requirements and regulation. It would be impossible to spell out every detail of every permitting procedure. The regulations are constantly changing, they vary in each of the country’s 81 municipalities, and no matter how sure something seems, exceptions pile upon exceptions. This chapter, then, seeks to be only a detailed overview of construction permitting in Costa Rica, and is meant to compliment the expertise of a highly-recommended team of professionals that you should hire to handle the permitting process for you.

If all this sounds too complicated and expensive, and is tempting you to cut corners on permitting and environmental compliance of your development, you wouldn’t be the first. Government regulators have simply not kept pace with developers during the last decade, causing severe backlogs. That encouraged many developers – especially in Guanacaste and the Central Pacific – to throw up their hands and begin construction without all the necessary permits, muttering the mantra that it’s easier to ask forgiveness than permission. Other developers have turned to corruption, dolling out bribes to government officials to get things moving.

Both of these strategies have often worked. Today, however, cutting corners on permitting costs more than it saves, both in time and money. This is mainly because the government is finally improving enforcement, significantly increasing the chance that un-permitted construction will get shut down long before the developer has a chance to ask forgiveness. Indeed, the year 2008 saw a series of high-profile crackdowns on construction sites all over the country that got the developer community’s attention. Legally, the penalties can include everything from fines to even jail time. Along with the crackdowns, the government is also making a few key changes in the permitting process – particularly in the environmental review – that promise to make permitting move faster, meaning that bribes, in addition to being a crime, are no longer worth the risk.

Also, as with everything else in Costa Rica, if you think doing permitting the right way is onerous, wait and see what happens when you do it the wrong way. Without the meticulous attention to detail that the permitting process requires, you could end up unnecessarily delaying your product an extra year or two – a catastrophic development if your financing is time sensitive. Horror stories abound.

Finally, cutting corners on permitting hurts everyone in the long run. Improper waste water management, the illegal clearing of forest, and the interruption of biological corridors by private roads destroy the very reasons people want to live in Costa Rica in the first place – namely, jungle, wildlife, beautiful landscapes, and friendly local communities. Permitting in Costa Rica is complicated and frustrating, but it is intended to protect the goose laying the golden eggs. Even better, think of it as keeping your neighbor from building a monstrosity that would lower the value of your property.

Title insurance is a relatively new concept for Costa Rica. Until only recently, it was rather difficult to get title insurance in Costa Rica. It is not required to have title insurance when purchasing a property since the properties are usually purchase by foreigners in cash Now, there are some very good options for obtaining title insurance when buying real estate in Costa Rica. Title insurance is not required when purchasing property in Costa Rica, unless the buyer is obtaining a mortgage for the purchase. However, many North Americans feel a greater sense of security in having title insurance arranged during the purchasing process.

Title Insurance is insurance against defects in title to real property. It is meant to protect an owner’s financial interest in property against loss due to title defects, liens or other matters of public record. Before you purchase your property, the property may have gone through several ownership changes or there are documents lacking proof of the seller’s ownership. Someone along the way may have forged a signature in transferring title or there may be unpaid real estate taxes or other liens against the property. Title insurance covers the insured party for any claims and legal fees that arise out of such problems. Title insurance will defend against a lawsuit attacking the title, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy. Title insurance guarantees that no one else can claim your property thus it also provides the peace of mind that you will not incur unexpected debts from your new property.

In short title insurance in Costa Rica protects against:

• Invalid documents executed under expired or non-existent power.
• False assumption of identity of the legitimate property owner.
• Falsification of documents, legal power, and other papers related to the transfer of property title.
• Liens or other financial burdens charged to the previous property owner.
• Hidden heirs of previous property owners.
• Documents executed by minors of age.
• Invalid documents delivered after death of previous owner.

However, before you commit to title insurance you should consider Costa Rica has an excellent public registry. A competent attorney can perform the initial title search and explain how to perform this verification and what to look for.

Furthermore your escrow agent can be a lawyer or law firm. All escrow agents must be registered with the Superintendence of Financial Entities (SUGEF), the government body in charge of supervision of financial entities and administration of third party funds. It is mandatory for administrators of third-party funds to be properly registered with this institution. If you escrow agent is registered with SUGEF your funds will be protected and the risk of anything happening greatly reduced.

Stewart Title Latin America is one of the title insurance companies currently operating in Costa Rica.

Stewart Title – Costa Rica
www.stewarttitlelatinamerica.com – Costa Rica
customerservice@stewartcr.com
Phone: (506) 2258-5600

Carl’s Jr., has opened three outlets in Costa Rica and plans to keep growing locally. Currently they have a very strong presence in Mexico with more than 130 stores. The chain intends to keep expanding its operations into Latin America. Currently they have overseas outlets outlets in Panama, China, Singapore, Malaysia, Indonesia, Vietnam, Russia, Turkey, New Zealand, American Samoa, Kazakhstan, Canada and the Middle East.

The restaurants in Costa Rica are operated by Gold Star Burgers S.A., which have exclusive development rights for this country. The restaurants here have a varied menu, from big charbroiled burgers to chicken and fish sandwiches, fries and shakes.

I remember that growing up as a kid in California I used to enjoy eating at the local Carl’s Jr., so I was curious to check out one of their local restaurants. I chose the one that is located across from the west side of San José’s Parque Central or Central Park. Upon entering I though I was in one of their restaurants in the United States since the décor is just the same and the service is excellent. If your item is not prepared they give you a number which you put on your table and they then bring the food to you when it is ready. I ordered a fish sandwich which was done in less than five minutes. It came with a little mayonnaise, a slice of tomato, lettuce and two star-shaped fish filets served on a bun. It turned out to very good for fast food.

On the day the restaurant opened a friend mine was their first customer and they rewarded him with a free hamburger everyday for one year. Of course he was thrilled.

Other fast food chains in Costa Rica are: McDonalds, Burger King, Kentucky Fried Chicken, Wendy’s, Subway Sandwiches, Quiznos, Pizza Hut, Dominos Pizza, Papa John’s Pizza and a few more.

There are two types of banks in Costa Rica: Those owned by the state and private banks. Deposits are insured by the former and not by the latter. The only real disadvantage to public banks is that at times the lines and waits seem to be longer than at the private banks. I have accounts in both state-owned and private banks and prefer the former because my money is insured and the safety measures utilized by them.

For example, recently, the Banco Nacional, the country’ premier state-owned bank, opened a new state-of-the-art monitoring system (Centro de Monitoreo de Seguridad Electrónica) to protect its customers and facilities against robberies, fires and other potentially dangerous situations. The system receives information in real time from over 9,000 cameras at its branches and ATMs located all over the country 24-hours a day 365 days a year. In additional, all vehicles belonging to the bank are monitored by a satellite surveillance system.

Scotiabank is a Canadian financial institution and one of Costa Rica’s private banks. Scotiabank has branches located in more than 45 countries in the Caribbean and Central America, Mexico, Latin America and Asia. Unfortunately, in Costa Rica it is a private institution and does not insure its clients money as in Canada. Furthermore I once had a very unpleasant experience at a downtown branch of Scotiabank.

I opened an account there over ten years ago and also obtained a safety deposit box at the same time. On one occasion when I visited the bank I was asked to open my safety deposit box and show its contents to a bank official. Initially I refused but he showed me a contract I had originally signed which stated in fine print that the bank could inspect a client’s safety deposit box whenever it wanted. In addition, clients could not keep dangerous chemicals, firearms or CASH in their boxes. What kind of bank prohibits its customers from keeping money in a safety deposit box?

Anyway to make a long story short, when I showed the bank official what I had in my box he told me that I had to remove the cash immediately. I told him that I kept the money there in case of an emergency. He responded that I still had to remove the cash. I was really irritated and didn’t want to make a scene so I followed his instructions.

I took the money to The Banco de Costa Rica where I have another safety deposit box. While there I asked the person in charge if there were any restrictions about keeping cash in my box and he said , “NO”, another reason I prefer the state-owned banks.

To make a long story short I presented a complaint with the SUGEF, the country’s main banking regulatory agency, against Scotiabank because of the discourteous manner in which I is was treated. The bank and their rude employee ended up having to apologize to me in writing and in person. I thought about suing the bank but lawsuits take too long here.

Needless to say I never recommend Scotiabank to any of my clients, keep NO money there because of what happened to me and above all the fact that they don’t insure their customer’s funds.

I am not talking about meteor showers here but the number of celebrities who have visited Costa Rica in the last few years. The latest stars to cause an uproar are Angelina Jolie and Brad Pitt. Supposedly they will be vacationing here during Christmas and New Years. Furthermore, the couple is seriously considering purchasing a property in Costa Rica in order to spend more time here. Jolie was quoted as saying, “My children will need me a lot when they are adolescents. I will need to support them and spend as much time with them as possible during that stage of their lives.”

According to the British tabloid The Sun, “Brad Pitt has found a large piece of property and recognizes that it would be the perfect place for a family hideaway. The country fascinates him and he would like to have a place to spend time when his career winds down.”

On another front Miley Cyrus, of Hannah Montana fame, recently visited the country with her boyfriend, Liam Hemsworth.

Over the last couple of years such luminaries as Mathew McConaughey, Leonardo Dicaprio, Tom Brady and Guisele Bundchen, Bill Gates, Steven Seagal, Steve Tyler, Michael Jordon and others have visited Costa Rica to view the country’s natural wonders and vacation here. Mel Gibson owns a lot of property and frequently hangs out here.

Despite the popularity of the Costa Rica with the rich and famous, ordinary travelers and potential retirees make of the bulk of visitors to the country. Regarding the latter, Costa Rica is still the most desirable retirement haven in Latin America and because of its friendly people, great year-round weather, affordable medical care, tropical flavor and so many more intangibles.