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Purpose of Forming Corporations

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Casbah209
7/8/2019 17:24 EST

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.

I'd appreciate your feedback. Thanks!

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Casbah209
7/8/2019 17:29 EST

BTW, I looked in the archives and found older discussions which helps. Any updates since those 2016 discussions?

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PuraVida
7/8/2019 18:30 EST

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

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Casbah209
7/8/2019 23:08 EST

Thanks, I'll check it out.

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lindyluvsCR
7/9/2019 08:20 EST

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.

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shermanwc
7/9/2019 08:27 EST

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.

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PuraVida
7/9/2019 09:01 EST

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.

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Casbah209
7/9/2019 22:55 EST

Thanks to all who have replied!

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lindyluvsCR
7/10/2019 07:42 EST

Pombina - What if both taxes are on there? Can we get them to remove the one or tough luck? Are they supposed to have removed?

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Justagirl8815
7/12/2019 08:01 EST

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!

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lindyluvsCR
7/12/2019 10:32 EST

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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PuraVida
7/13/2019 16:20 EST

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PombinhaCoco7
7/13/2019 17:29 EST

lindyluvsCR
I used to know how to check the National Registry but I forgot.

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lindyluvsCR
7/14/2019 09:51 EST

Pombinha - Although don't have any more - In my notes that I still have says rnpdigital,com then you press certifications / system gratis
You set up a password etc

Always confusing to me too because I didn't do it often enough and then would struggle with it.

Hope this helps.

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peter2017
7/14/2019 10:50 EST

https://m.youtube.com/watch?v=SPjJZPVbgb8

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shermanwc
7/14/2019 10:59 EST

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.

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rubber
12/13/2019 00:54 EST

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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rubber
12/13/2019 01:04 EST

Can you close an inactive corporation
and transfer the property on your personal name without having to pay
heavy transfer taxes?

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shermanwc
12/13/2019 07:51 EST

My lawyer said there would be required fees and legal costs to move our property from our corporation to our personal names.

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Justagirl8815
12/13/2019 12:12 EST

Yes. If you want to dissolve the corporation, you have to transfer the title to your name and pay all of the closing costs again.

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lindyluvsCR
12/13/2019 19:27 EST

When I dissolved, it took some money to do so, but glad I did. Just wish I had not gotten it to begin with.

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acastillo
12/19/2019 12:21 EST

To those of you who check your title regularly, why check every month vs every 6 months or year? What would you do if you found the title had changed?

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