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  Then remember that you will have daily limits on how much can be withdrawn in order to protect against fraud.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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