I've noted that forming corporations is common when acquiring property. What is the purpose? I'm assuming that perhaps there is/was (before the new tax legislation, I.e., 13%...) a tax benefit or enabled one to rent out their property...but I'm only guessing.
Years ago there were good reasons to have a corporation. Not any more IMO. Many friends are dissolving their "in-active" corps. that hold property or vehicles. One lawyer told me that the only reason now to have a corporation is if you have minor children. For more info. just Google "news Costa Rica" and look at the links on the first 2 pages. One of my favorite lawyers recently wrote this..."While the government continues to "steal" money from the Private Sector through increased taxation and costly Regulation, to be able to continue to support the outrageous wages, annual bonuses, and pension benefits of the Public Sector, the Private Sector will not be able to create the additional jobs required to stimulate the Economy." Open this link; https://news.outlierlegal.com/2019/06/04/new-tax-law-what-you-need-to-know/?fbclid=IwAR1_B4BuJz4PKrBPnn-Y1TIP1MIsv7hJfFV3tmMFEdZV0o8iMynArem4NzA
When we got out corporation, we were told it was because - less time for beneficiary of house to officially receive, more protection of finances if someone was trying to sue you, and if you sold your house it was real easy because you could just sign over your deed.
Recently did dissolve though as no way am I going to make monthly reports. Did that when in business in US.
In 2012, we were given 3 reasons to put our new condo into a corporation: 1) Eliminate transfer taxes when sold; 2) Reduce risk of title theft; and 3) Reduce personal liability risks.
Tax laws later negated #1. I have heard that title thefts have occurred for corporate properties by dishonest lawyers, although less common than non-corporate property. For liability, you can purchase liability insurance for your home and auto.
Owning "shares" (property) in a foreign corporation has made my USA tax returns more complicated. At this point, I wish I had not formed a corporation for my condo ownership.
Not only were corporations affected on July 1st. Consumers are complaining of being charged the new value added tax PLUS the old retail sales tax (13% + 13%) on their purchases. Be alert of retail stores of charing the Impuesto al Valor Agregado (IVA) – the Value Added Tax (VAT) that went into effect on July 1, PLUS, the old retail sales tax (IVI). Both add 13% to the price of an item, the difference is that with the introduction of the IVA, the IVI is no longer applied. The alert was made by the Defensoria de los Consumidores de Costa Rica, an agency of the Ministerio de Economia, Industria y Comercio (MEIC) – Ministry of the Economy – after receiving (Facebook page) complaints from customers.
We have a home in a corporation and hold the shares but haven’t “seen” any affect yet. 1) how to you avoid the title theft and 2) is it just when we sell or how does that affect us simply because we have a corporation? Thank you for replying! And thanks for the link, I will check it out!
I took mine out of corp, but just check now and then on the National Registry site to make sure is still in your name. Someone can maybe expound or correct but I believe so. I never did often but had no problem.
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I try to check my condo property info at www.rpndigital.com every month or two: Look for Consultas Gratuitas on the first two pages and sign in. Then I go to Consulta por Numero de Finca, and enter my Finca number (from my property title for my condo, but there are other options for identification). I check the Propietario and Fecha de Inscripcion, to make sure that no changes have been made.
I was of the impression only way to close the corporation was to transfer the property in your name (same as buying the property) paying all the taxes etc. Did you have to do all that. I would be very interested to know. Thanks
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