How the banks are killing tourism and investment in Costa Rica

So, you think you want to visit the beautiful country of Costa Rica with your family and don’t want to tuck cash in your socks and underwear to do it?  No problem, you’ll just use an ATM for your cash, right?  Remember that first you have to notify the bank that you will be using your credit or debit card abroad.  Okay, you’ve done that.  Then remember that you will have daily limits on how much can be withdrawn in order to protect against fraud.  Ok, you can live with $500 per day.  But then you get to the ATM at Banco de Costa Rica and you realize that the ATM won’t give you more than $100/day.  At this time, Banco Nacional and private banks still allow more, but $100/day?  What family of 4 can vacation on $100 a day?  Not in Costa Rica.  So, what do you do?  For now, you go to every bank you can, pay withdrawal fees at each of them and unfortunately, waste a lot of time on your vacation.

Why this sudden restriction?  The answer I got is that the Hacienda (or the tax agency in Costa Rica) wants to track payments that previously have been done in cash and therefore, not reported as income.  I’ve also heard to avoid money laundering, although I’ve never heard of any money laundering that happens with only $500.

What if you want to bring down a student group for a trip?  They’ve paid for their trip and you need to figure out how to bring the money down to pay.  You can’t bring more than $10,000 without reporting it and who would want to carry that much cash anyway?  Forget the ATM (see note above).  You’re only here a week so opening a bank account is out of the question (and see the limitations below).  And third parties are not allowed to accept your money to give you here on this end due to money laundering concerns.  What do you do?  Do you have to make international transfers to each and every hotel, national park (which doesn’t accept bank deposits for payments), and restaurant?  Just how do you pay?  Make each child carry their own money?

What if you want to move down and buy a home?  No problem here.  Costa Rica allows foreigners to buy property and if you invest in $200,000 or more, you qualify as an investor for residency.  Just go open a bank account and move your money down, right?  Hmmm.   Banco de Costa Rica no longer allows anyone without a residency to open a bank account.  They have set up an easy to open account system for foreigners, but it limits the amount in the account to $1000.  Not going to buy a house on that money!  And with housing rentals at typically $1000 and up, how is a family going to live on this?  They aren’t.  Honestly, who decided on a $1000 limit?  So, you would actually have to make the transfer down from your home bank on the day of the closing, but make sure you have someone back home authorized to make the transfer for you.

So, once someone has their residency, they can apply for a bank account (at BCR), but the trick is that you can only apply for investor residency after you have bought a house (with no bank account) and have waited the approximately 6 months for your residency to be approved.  Of course, you might qualify for residency in another way, but you will still have to wait for the processing and approval before you can open the account.  What a mess!   Banco Nacional still allows people to open accounts on a passport, but yes, there is a lot of paperwork to have ready before you hit the bank.  Best to consult your local lawyer on that one so that you don’t waste your day just to find out you don’t have all of the papers.  And be prepared to sit in the bank for hours while the account is being opened (even though you have every document ready).  Then, once the account is opened, make sure you can verify why you are bringing the money in or it will be frozen.  Be able to present a contract to buy something at the time of the transfer to prove the reason for this influx of money.

I personally have my account at BCR and like the fact that the website is in both Spanish and English, but the recent restrictions have made new accounts and ATM withdrawals impossible at this bank for tourists and immigrants.  They claim that the other banks will soon be following suit as it is a government mandate.  I really hope this isn’t true because it is already difficult enough to travel or live internationally without these restrictions.  For the moment Banco Nacional is still opening accounts for foreigners with the proper documentation and Scotiabank has confirmed that they also are available to open new accounts.

Costa Rica is still one of the most amazing countries to visit and live in, but the banking restrictions are making it harder every day for the average tourist and immigrant.  If anyone has discovered legal ways to get around these restrictions, please comment on the blog as it would be very helpful to many.

For more information on opening a bank account and what you need to have with you, Cecilia Tristan, at the law firm of Gomez, Tristan, & Tristan can help you every step of the way.  Email her at Cecilia@gomeztristanytristan.com.  Tina Newton is co-owner of Tristan & Newton and you can contact her at tina@tnrealestatecr.com as well as through Facebook and the website.

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Costa Rica 101

There are a few differences in Costa Rica that just might make you shake your head and smile (or cry depending on the case). 

1)       Roosters can start crowing at any hour, even at 3 in the morning.  Forget the idea of roosters crowing at sunrise.

2)      New Year’s Eve parties are usually with families.  Parties at bar and clubs will start after 1 a.m. which is when Costa Ricans go out to celebrate the New Year after celebrating with the family.   If you think you are going to go out and be part of a large crowd to welcome in the New Year at midnight, you will be deeply disappointed.

3)      Easter is celebrated all week, that is, the week before Easter Sunday.  Vacations will be in full bloom and many places closed.  Stores often re-open on Saturday, before Easter Sunday.

4)      Christmas is completely focused on Christmas Eve.  Christmas dinners and gifts are exchanged on Christmas Eve at night and Baby Jesus gets placed in the manger at that time. Even though Santa is becoming more common, you will still hear that Baby Jesus brings the gift.

5)      Vacations are taken VERY seriously.  The National Registry is closed from the 21st of December until the 9th of January.  Do not even hope to do anything that involves legal processes during this time.  Even if the office you need is open, don’t be surprised to find that the person you need is on vacation and no one else can do anything about your problem until you get back.

6)      If you have a new baby, you will find that ANYONE may come up and ask to hold him/her.  Costa Ricans love babies.  After at first being shocked when a lady came up and took my baby while I was at a funeral (I was quickly informed that the lady was a nurse and she was to be trusted), I quickly learned to love the fact that waiters would take the baby and walk around with her while I ate or had to run to the bathroom.  A new baby is always considered a blessing and NEVER a shame no matter the circumstances.

7)      Tomorrow does not always mean tomorrow.  It could mean anytime in the future.

8)      Costa Ricans do not seem to feel worried about canceling or changing appointments.  “If God willing or wishes it” ends most arrangements to meet or see another person.  And with that, a laid back attitude about appointments.  If it rains, or someone was just delayed for any reason, appointments may be cancelled, often without advising the other party.

9)      Time in general is just not stressed about.  “Tico Time” is the term for when people arrive late.  It can vary from person to person, so you might want to check if the activity will start “en punto” meaning right on time, or “en hora tica” which is Tico Time and could mean 30 minutes to an hour later.

10)   Reading is not as common.  Children’s books are hard to find and very expensive in International bookstores.    Definitely, bring your favorites with you.

11)   Watching international news is not considered very important.  Why worry about something on the other side of the world when you really need to know if the bridge to San Jose will be closed for your commute?  So don’t be surprised if discussions tend to be more locally oriented.

12)   Forget “blocking” your friends because you disagree on politics or religion.  Costa Ricans can easily discuss or disagree on things without feeling personally offended or accusing others of being wrong. 

13)   If you are told that something will be “difficult”, assume you are being told , “No, this will not happen.”  Costa Ricans do not like confrontation and rarely say no.  So, when you hear a “maybe”, forget it.

14)   Defensive driving is a must.  Always assume that the other driver will not follow any of the rules of the road.  Blinkers? Nope.  Stop signs?  Just suggestions.  Passing on curves, going uphill?  Absolutely. 

15)   More than a coffee break.  In government facilities, do not be surprised to get to the front of a long line, just to have the clerk get up and leave with no explanation.  What is happening?  If it is between 8 and 10 a.m., he/she has gone to breakfast.  This can be 30 minutes or longer.  The same occurs in the afternoon for coffee time.  What to do?  Have a seat and wait and hope you have a book.

16)   Why does everyone say “goodbye” or “adios” when you pass by?  They aren’t really saying goodbye.  When someone is just passing by on the street, people will often yell out “adios”, just like we might say “Hey!”

17)   Glad your flight has landed?  Costa Ricans are so happy, they clap.  A full applause can be given upon landing.

18)   Rain.  The rain makes people sick.  I always scratch my head at this one.  The rain here is warm and just wet but people will often use it as an excuse to not take children out.  It is raining and they can’t get wet or they will get sick.  Hmm.  Except for soccer, of course.  My child has played games where they couldn’t even see the other players or the ball because of the rain and the stands will still be full of devoted fans.  Who knew?

19)   Differences are considered interesting, not threatening.  I had a Costa Rican lady come up to my African-born volunteer.  She touched her skin and said it was so beautiful and so much healthier than her own white skin.  What a great way to see the world.

20)   A true family focus.  Older brothers and sisters carry their little siblings around and help care for them.  Extended families are very common with grandparents living in the same house and everyone caring for each other.  I don’t ever remember seeing so many teenage boys willing to help care for a baby.

Differences that are frustrating, silly, or endearing, Costa Rica is “Pura Vida”  with a lack of confrontation (except on the road) and a relaxing love of life and living in the present.

Tina Newton is co-owner of Tristan & Newton Real Estate in Atenas, Costa Rica.  She has lived in Costa Rica and is always glad to answer any questions you might have about life in Costa Rica or purchasing a property here.  Contact her at tina@tnrealestatecr.com.  Her work partner is Cecilia Tristan who has been a broker for 40 years and is an attorney with specialties in residency and property transfers.    Both are bilingual and completely available and willing to help you every step of the way.  Click on the website or Facebook page for more information.