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The Local Market June 2007

The Local Market July 2007

The Local Market August 2007

THE LOCAL MARKET

VISITORS FOR COSTA RICA in the first semester 2007.

The Canatur –the Costa Rican Chamber of Tourism has released the latest figures on visitors for the first semester of 2007. An increase on 6,4% over last year has been scored. A total of 832604 tourists visited Costa Rica, which is 50258 more visitors than in the same period of 2007. This figure has exceeded the prognosis of the Costa Rican bureau of tourism that estimated an increase of merely a 5%.

Most of this is due to the fact that there has been a 37% increase in the amount of international flights to the country in 2007. This is 1888 monthly international flights into Costa Rica. The main focus of arrival is now Guanacaste. Almost a third of all new visitors arrived via Guanacaste´s International airport. While San José´s flights increased in 3.14%, Guanacaste has increased in 15.66% from last years first semester. Tourism according to Canatur´s figures has generated more than $1.600 million dollars annually and represents 23% of the National income, well over traditional products such as coffee and bananas.

One can only wonder what the closing figures for 2007 –including the “high season” will bring. Meanwhile we can only say “PURA VIDA!”

LEGAL NEWS

Monitoring your property

Familiarizing readers both our legal system and information available to you is my goal. One of the most useful instruments available to all, is the Costa Rica FOLIO REAL system, or electronic property information system. Just a click away, you can verify the status of your registered properties, any where in the world.

The new refurbished web site of the Costa Rican National Registry is:

http://sitionuevo.registronacional.go.cr/rnb_inmuebles/inmuebles.htm

Having reached the system, you may access the information to your property either via the number of the property, id number (passport, corporate id) or the name of the owner. The easiest and most direct way of accessing should be via the FOLIO REAL number, which is the unique number of the property, assigned using both the Province and the property number and the amount of registered owners. The number should look as follows: 1-123456-000 (Province – property - registered owners from 000 (which is one owner- to 999 possible co-owners!)

Other information you will find in the report that the system produces: the location of the property, the boundaries –as registered- the ownership information –including date of purchase, any annotations that property has –which are basically advising third parties of changes being applied and in the process of registration, liens, survey number and mortgages.

You can even check the registered size of the property with the survey (cadastral plot number) which is also available under the CATASTRO section of the Folio Real. Here all surveys which have affected a property may be reviewed.

Keeping current and monitoring on your investment is easier that you think and may keep your peace of mind.

THE LOCAL MARKET:

The Costa Rican Bureau of Tourism (ICT) via its webpage, has announced (May 7, 2007) the arrival of a new charter airline into our country. “First Choice” is a British airline that has inaugurated its first flight to Liberia from London . First year of operations has been estimated at 6,000 tourists being flown in. Most interesting is the fact that ICT determined that during 2006, Costa Rica received 235,000 visitors from Europe, of which 28,000 originated from England . This places England as the eighth tourism source. ICT adds that their surveys reveal that the average age of tourists from the old continent is between 36 and 38 years old, with a personal yearly income between $57,000 and $100,000 per family. Moreover, 60% have a University Degree and 10% a Doctorate Degree. It is yet to be determined if the increase in British tourists will have an influence in the purchase of real estate by them.

LEGAL NEWS

Guidelines On Costa Rican Corporations

It is most common to purchase property in Costa Rica via the purchase of an existing company. What this entails as far as formal obligations, may not be that simple or clear. The documents that must be kept current within the company is an issue well worth revising.

The Documents to Safeguard:

It is important to know where the following documents are kept: Books: Each corporation normally has a minimum of six books. The most recent regulations –June 2006- for non-active commercial corporations calls for the registration of only the three legal books: Board of Directors, General Assembly and Stock holder’s book. The remaining financial books can be registered when commercial activity starts. Prior to March 2007, all corporations should have six books.

The shares represent the ownership of the company. It is to be kept in custody by the owners of the company –not the attorney- unless otherwise agreed. As a practical matter, the Share and the Corporate Shareholders book should remain together. Sole exception would be the case involving an active process before the Costa Rican authorities. This may be very familiar to all of you registering beachfront concessions with the Municipal authorities.

Incorporation documents and Bylaws:

With the transfer, the original incorporation and corporate identity card is surrendered. It is important to keep this historical reference, even if it may be replaced. Normally if the corporation is to be sold, all historical documents are to be submitted to the purchaser’s attorney, so starting this collection process early will save you time and money.

The Corporate Domicile:

A final word of advice. The corporate domicile –which must be in Costa Rica- serves as the place of service of process for the Government and Municipal authorities. It is for this reason that keeping the corporate domicile at the office of an attorney, and/or having an attorney as the Resident Agent for service of process is a good idea. The government will fulfill its obligation, by serving notices to the formal corporate domicile. Unless you have somebody that will contact you immediately upon the notification, it is better to keep it in a law firm, with your contact information current.

THE LOCAL MARKET

Arturo Blanco, June 2007

A recent study done by SUMMA MAGAZINE (May 2007) compares the price of properties both in the city as well as the beach between Florida and Costa Rica. According to the article a two bedroom 2 bathroom apartment at the beach has a normal cost in South Florida of $1000.00 per sq.foot and in Costa Rica a similar development would cost $214.00 per sq. foot. Comparing beach property to develop, the prices in the US are close to $260.00 per sq. foot and in Costa Rica around $46.00 per sq. ft. El FINANCIERO newspaper a specialized financial paper from Grupo Nacion- has recently reported that although 70 percent of the construction is concentrated in Guanacaste, other areas of the country are being developed. On a personal note, projects in Parrita and Osa have become daily source of work. It is evident that the new trend is to build on coastal view properties, more than beach front Concession areas. On some concepts related to this last notion, I am including a brief explanation.

LEGAL CONCEPT:

Concessions in the Maritime Zone: Concession property is more commonly known as beachfront property belonging to the government. A concession in Costa Rica is defined as the right to use and enjoy a specific property located on the maritime zone for a pre-determined period of time via a lease with the goverbment. Public zone is comprised of the first 200 meters measured horizontally from the high tide. This zone also includes islands, pinnacles of rock, mangroves, estuaries, small islands and any small natural formation that overcome the level of the ocean. This 200 meter zone is divided into two areas:

1. Public Area:

The first 50 meters measured horizontally from the high tide line. This zone is not available for ownership of any kind. Further, this area is deemed a public area and any individual wishing to utilize this area for enjoyment has the right to do so.

2. Restricted/Concession Area:

The next 150 meters. This area is available for Concessions to be granted. A concession is in essence a lease on the property granted to the lessee for a specific period of time. Normally the concession period is granted for 20 years. An owner of a concession may build on that concession, subdivide the concession and perform other acts to the property. However, appropriate permits from the local municipality must be obtained. In Costa Rica, 95% of beachfront property is considered concession property and is governed by the Maritime Zone Law These legal dispositions set forth the conditions under which foreigners and local residents can own concession property.