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  Then remember that you will have daily limits on how much can be withdrawn in order to protect against fraud.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

Dengue, to Fear or Not to Fear?

The Scare.  A friend of mine, who is headed back down to Costa Rica, asked me about the dengue situation in Atenas because they had read that the cases in Atenas were sky high.  I was surprised about the question because I’ve only heard of a couple of cases recently.  I’m not sure exactly where my friend read this information, but after searching the internet, I did find an article about dengue in “La Prensa Libre” which publishes online and listed Atenas at the top in Costa Rica (http://www.laprensalibre.cr/Noticias/detalle/81094/atenas-encabeza-cantones-afectados-por-dengue). 

Time to put it all in context.  First, the way this article was reported was incredibly misleading.  Statistics can be used to influence people in many ways.  For the average person, who may not be professionals in economics, these stats without explanation or improperly stated can be alarming (which is probably the intent in the first place).  This specific article states that Atenas leads  with the highest percentage of cases for the first 31 weeks of the year 2016.  It reports that there are 3,134 patients.  But if you read closely, that number is per 100,000 inhabitants.  Since Atenas doesn’t have 100,000 inhabitants, but only around 15,000, the actual number of cases would be closer to 450.  Still terrible, but a truly different number.  Also, the director for the country states that at the beginning of the year, they were getting reports of 1000 cases/week (for the country, not Atenas), but since it was stated right after the statement about Atenas having the most cases, with a quick read, you might think he was talking about Atenas.  And he goes on to state that currently (August), he was at about 100 cases/week for the country.  We are now in November.

Fighting dengue.  Atenas had a large fumigation campaign several months ago.  It was recognized that mosquitos and dengue were a problem and addressed (although probably not totally eliminated).  But people are reading these statistics, now, in November, and are getting scared to come now. 

Dengue transmission.  Dengue and the other mosquito carried diseases are transmitted when one infected mosquito bites another person.  The distance that mosquitos travel is usually not that far (typically no more than 300 feet reported by mosquito.org), so it is the biggest problem between families and people living or working close to each other.  It’s also more common in the lower altitudes where more mosquitos thrive rather than up where it is cooler.

Symptoms of dengue.   Dengue is terrible.  I have seen true cases of dengue where people run high fevers for 5-7  days straight, are in extreme body pain, and break out in rashes with an extreme tiredness that can last for weeks.  Unfortunately, it seems that every time someone here has a fever, immediately it is proclaimed that the person has dengue.  Even if they get better in 48 hours and discount it, they already made the announcement in the community that they had dengue and that is what people remember.  Fact, the regular labs don’t do dengue exams.  Only the Ministry of Health can run a dengue exam which takes 1-2 weeks for the report to come back.  Therefore, no one waits for this report and instead, the doctors request blood exams for platelets counts which can be returned the same day.  The labs check the levels of platelets in the body and if they lower to an extreme amount, it is assumed to be dengue.  Regular viruses will also lower the platelets.  So only after multiple days of platelet testing and counting will a doctor declare that it APPEARS to be dengue.  Treatments for these viruses are the same with lots of liquids, medicine to control the fever, and rest.  Antibiotics do not work as these are viruses, not infections.   

So, what to take from this?  Be careful and a bit suspicious with health reports in unofficial news sources.  You need to check the source, understand the stats, and put it in context.  Atenas does have flair-ups with dengue, so use repellent or long sleeves to help prevent mosquito bites and but don’t give up your life just because of rumors or badly-stated statistics.  

Tina Newton is the co-owner of Tristan & Newton Real Estate and has lived in Atenas for 17 years.  Feel free to contact her at tina@tnrealestatecr.com with any questions, real estate related, or not.  Check out the website for current listings and the Facebook page for updates.  They look forward to helping you find the home of your dreams.  Names to Trust…Homes to Cherish.

Do you need residency to buy a house in Costa Rica?

No, you don’t.  Anyone can purchase a home with their passport or local identification (cedula).  However, living here on a tourist visa can be a hassle as you have to leave the country each 90 days and then return on a new tourist visa which is normally automatically renewed for 90 days for North Americans or Europeans.  Unfortunately, it is up to the agent at the counter for the length of renewal and you might assume you were renewed for 90 days and then look at it later and see only a 60 or even a 30 day renewal.  The government is also always threatening to crack down on “perpetual tourists” which are those that constantly enter and leave on a tourist visa.  It hasn’t really happened yet, but it’s always good to be prepared.

There are a few different ways to qualify for residency.  In my case, I was married to a Costa Rican and qualified in that way, but if you are not, then you have the “pensionista” or “rentista” options in which you must show a monthly income of $2500 per month or you can be an “inversionista” which means you have invested at least $200,000 in the country.  This can be in a business or by buying a home.  As I was writing this, a new Tico Times post just popped up on Facebook with the same general topic, so I’ll share the link here.

Applying  for residency requires some patience, but it’s much less stressful if you bring the needed documents in advance and if you have a trusted lawyer to file it all for you.  You will need your birth certificate, your marriage license, and a police report which need to be apostille or certified by the State Department office in your area or certified by the consulate.

Finding a great lawyer is a must in Costa Rica because basically all documents and processes require a lawyer in some way, including every property transaction.  You can also set up your own Costa Rican corporation which is very beneficial if you aren’t currently a resident.  For other processes, you might not need a lawyer, but having someone to represent you who speaks the language can make these tasks, such as opening a bank account, a lot easier.  Once you have gone in and tried to understand the logic and requirements in opening an account, you will understand completely.

Tristan & Newton Real Estate is always glad to help with all of the home purchasing and selling decisions and make everything go as smooth as possible.  Any questions you might have about real estate or living in Costa Rica in general, just email Tina or check out the website for more information.  For any legal or residency issues, Cecilia Tristan with Tristan & Newton and the law firm, Gomez, Tristan, & Tristan, is always available and enjoys guiding people through the process.  Both are bilingual (Spanish and English) and can help you in whichever language you feel more comfortable.