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Living in Costa Rica - an Interview

Updated on July 10, 2011

If you're thinking about living in Costa Rica then you'll want some advice from some one who's been there and done that. I've interviewed Susan Fletcher who has lived there for more than a quarter century and has a wide range of experience with just about everything. If you want to know how to start your own small business in this Latin American country or you are just looking for your own little piece of paradise to buy, then read on.

Anne: Is now a good time to set up a business in Costa Rica?

Susan Fletcher: Even better than before. Costa Rica is growing and moving into the limelight. Guanacaste in particular is booming with the opening of the International airport at Liberia (LIR), daily scheduled flights from Miami, Houston and Atlanta. We are expecting 2000 passangers per day starting February 1st , all these visitors need services. Resort hotels, Smaller Bed and Breakfast lodging, restaurants, nightclubs, shopping, imports, residential bungalows, retirement homes, family homes, activity parks, child care, property management, gardening, security, etc.

Anne How would a foreigner go about setting up a small business? What kind of paperwork (legal documents) is necessary to get started and what (approx.) are the costs associated with that?

Susan Fletcher: Things are changing all the time. Residency is crucial. At the present an individual has to invest the equivalent of $ 200,000 for permanent residency or show an income of over $600 from recognized pension or fixed investments, police record, birth certificate, marriage or divorce certificate, chest x-ray and HIV test results. All this documentation must be done at the nearest Costa Rican Consulate office in their country. Once the documentation has been approved and temporary/permanent residency is approved, then an individual can peacefully conduct business.

To set up a corporation the costs vary from Attorney to Attorney. The last one I set up cost me the equivalent of about $ 30.00 last year, however I have heard as high as $1000. It takes a week to check the name of the corporation, three weeks publication in the national legal publication (as I understand it, this is for someone to object to the name or the individuals incorporating), and a day – 1 week, getting the books and invoices registered at the tax office (now one can use a computer accounting system as long as the numbers cannot be changed and are consecutive). I use QuickBooks.

Costa Rican Coast-line
Costa Rican Coast-line

An individual can purchase land already in a Corporation or business that is incorporated by just paying for the purchase and transferring the stocks. This is all done off the registry, later the individual can change the name and or legal representative in the national registry and the tax office. If the purchase is valued at over $ 200,000 then the individual can qualify for residency or the newly purchased business can hire the owner under contract for a salary. Mind you everything has specific interpretations, I am only giving some examples and the interested party will need an attorney to clarify and handle everything for this interested party.

Anne: What sort of privacy laws are in place to protect people who would like to set up an offshore corporation in order to shelter their money? How does taxation work are you taxed only on money earned within Costa Rica or also on profits from a business based outside the country?

Susan Fletcher: This is best handled by an attorney. I understand the banks maintain confidentiality except for proven cases of tax evasion or fraud, etc. Once I was charged in court and the individual had to give my full correct name and account number in order to get information on my account. Since he had only one account number, the bank only released the info on that account. This was a case where I hired heavy equipment and the guy tried to take the money and run – I put stop payments on the checks and he charged me with a penal charge, however, as things came out in court this man was charged with fraud and escaped.
A corporation here is called an Anonymous Society, Corporate shares are printed and held outside of the National Registry. A legal representative is named to handle all the tax reports and other legal matters.
Initiating a Corporation, the board of directors and a legal representative are named and registered in the public records, the ownership of the shares is also listed. However once this is done, the shares can be transferred to another and there is no public record of this.
Buying an existing corporation (Shelf Corporation) is easier – just transfer the shares and name a new legal representative. Eventually, the sale needs to be inscribed in the Corporate books.
In Costa Rica one pays on earnings in the country, there are both personal and Corporate tax schedules. The USA allows approximately $80,000 of earnings offshore as tax free. All US citizens should declare earnings anywhere in the world to comply with the Internal Revenue Service.
One can wire money into Costa Rica from any account around the world. It used to be that wires were not traced once the transaction was completed. However, with the new “Patriot Act” and other rulings of disclosure, I do not know if this still applies. Things have changed and it appears that most all countries are complying with the US requests.

As I say, I am not a legal adviser, just experience has taught me a few things. When I watch CNN news, I count my blessings. Costa Rica is a passive country and not a target for terrorism or big crime. As it develops and grows, crime is increasing but it is probably equivalent to what crime was in California about 35-40 years ago. Some people carry their own Karma around with them, and others seem to assimilate with no problem.

The drug problem is real and seems to be in certain areas more than others. Of course, visitors have helped this problem grow. Probably 30% of the ticos see North Americans as having $$$$ running in their blood, but it is relative to the individual more than not.

For example, many realtors up the sales prices for the Foreigners (from anywhere around the world). So it is always a good Idea to have a trusted tico find property and fix a sales price before the foreigner enters the picture. Whereas my web site is listed in the local newspaper for both the tico and the foreigners alike, I have had realtors ask me to up the price by 10%, but I refuse to do so.

Anne: How important is being fluent in Spanish to starting a small

Susan Fletcher: Knowing the national language is always a good idea. However, most attorneys speak english or understand it and are shy about speaking it. Communicating with the labor force and the local government offices may pose a problem so it is a good idea to hire someone to help with the translating in the beginning. It is best to get to know the other foreign residents in the area of interest and get recommendations for professional service providers. Beware of “going it on your own”, there are some very nice and seemingly well meaning people out there that will gladly take your money and disappear. Those of us who have lived here over 20 years have heard a load of bad luck stories. I personally have not had any problems with any attorney, doctor, vet, accountant, government officer, etc. So I cannot say if the stories I have heard are exaggerations or not. There is an easy way to do just about anything you need to do, when it is done the right way.

Anne: How do the locals feel about foreigners? Is there anything in particular that one needs to do in order to integrate more quickly? What should a foreigner avoid saying or doing?

Susan Fletcher: Very important question. First thing to remember is that the Costa Rican is AMERICAN also, they are not stupid, lazy or thieves. The tico is just coming into the industrialized and now technological era, they have not the years of experience that the developed nations have enjoyed. Understanding this fact should help others to be a little more patient when introducing new ways of doing things. When the foreigner has a good command of the Spanish language and can communicate on a par with the tico, then they can determine the intelligence of an individual, not before. The ticos are very friendly and cariñosa (caring and loving), they are helpful and welcoming. Many have dealt with foreigners in the past and suffered abuse, and are now cautious and in some cases abusive of the foreigner in return. ON the whole, the culture is great and the people are great. I have adopted a phrase that I repeat to all new residents “if you do not know how to guard your belongings the tico will guard it for you”, meaning if you leave your valuables about as if you do not value them, then the tico maid or gardener will guard it for you, and if time goes by and you do not ask for it, then it becomes the ticos. There is some logic to that. I have learned to guard my things and to ask whenever I have misplaced an item, it usually reappears in a couple of days.

Don’t display your wealth or brag about it. It just causes envy, and that leads to robbery.
About the best advice I can give is to remember that one is welcome to Costa Rica and the welcome mat is extended for years to come or until one has abused the welcome.
Learning the language is best accomplished through direct contact.

Anne: Is there anywhere that is over saturated with start-ups? Are there any regions that one should avoid?

Susan Fletcher: There are regions of Costa Rica that are more isolated and although the land is cheaper, it will take years before the services are there. So in the long run I recommend staying within 1 hour from a city. Pretty much all of Costa Rica is growing, although the “hot spot” is Guanacaste.

Anne: How stable is Costa Rica’s economy? Would someone run the danger of
loosing their investment to the government or devaluation?

Susan Fletcher: This is hard to judge. The economy is very stable as compared with other Latin American countries, on the whole I would say it is stable. The only reason I can think of where someone would lose their investment would be because they tried to do something illegal or against the grain. For example, a foreigner can not own or hold the rights to the first 200 meters of beach front property yet people buy that land. Eventually, the municipality will reach their area and find that a foreigner is holding that land and voila, they lose their investment. Anyone involved in drugs in anyway can lose their investments. The utilities are government owned, so if someone starts up a private electric company or phone company, for example, then they can lose that. An attorney can best advise the interested party on this question.

Anne: Do you have any particular advice for an expatriate entrepreneur in Costa Rica?

Susan Fletcher: The best advice I have is to keep your business private (no one needs to know what you are doing). Find a good Attorney, get to know the bank officials in your community, get to know others in your line of business, know who you are dealing with, and give back a little something useful in your community to help the community grow.

Anne: Do you have any contacts that would make a budding entrepreneur’s
venture easier? Notary, Lawyer, Translator, Bank Personal, etc.?

Susan Fletcher: I use several different lawyers for different things from personal matters to big business dealings, not all speak english and their charges vary.

Translators for legal documents will be handled by the attorney. I can recommend an attorney depending on the need. For someone to go around and do the translating, there are several very nice english speaking individuals in the area, some are wise to business and others are just for personal translating.

My banking is for personal and business and deal with the two National Banks.
If an individual is looking to start business in my area of Guanacaste, which is from Liberia to Playas del Coco, I can direct them to some good people. Much would depend on what the individual hopes to start up.

I know many of the officials and other people in the area, at the utility companies, municipality, hotels, developments, equipment, associations, etc. and can assist someone to find their way in doing business here in Guanacaste as time permits.

Hopefully, this answered some of what you were hoping for. Again, I am not an attorney and can only make suggestions about things. I believe it is very sound and stable, and considered safe. Like all places around the world where tourists travel, crime is problem and the traveler should be cautious and use common sense.

A Little Background

Susan Fletcher, originally from Hawaii and California first came to Costa Rica back in 1975 after her mother had heard about the country on non other than the Johnny Carson Show. Being disabled with arthritis, she was intrigued with the idea of a warmer climate and affordable domestic help. Shortly thereafter, Susan’s entire family drove down and fell in love with Costa Rica.

Susan eventually moved back to the States but always kept the dream of making Costa Rica her home alive and planned on eventually moving back. Twenty-six years ago, when she found herself with child, she could think of no place she would rather raise her (soon to be) daughter than along the balmy shores of her family’s adopted homeland. So she packed up, headed South and has been there ever since.
Fletcher is the epitome of the offshore entrepreneur in that she embodies all of the necessary traits. She is flexible, adventurous, resourceful and persistent, although she see herself in a much more modest light. In her time in Costa Rica she has been involved in many ventures including; being a partner in a boarding school for troubled teens, building houses, bridges and other projects in the community, growing Hawaiian Papayas, Being part owner of a Bridal Gown Store and for the last six years Imports and Exports.

As if that weren’t enough, Fletcher is in the process of helping her daughter and Son in Law open a new modern grocery story in Playas del Coco and of opening her own Gourmet Shoppe of imported foods and wines which will be run in conjunction with her daughter’s store.

Article by Anne Alexander Sieder

If You Want to Know More About Living in Costa Rica

Here are a couple of links:

The Real Costa Rica (written by an American who's been living there for years).

Costa Rica Forum a wealth of information and a place where you can post questions and have them answered by people who know.


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    • Lenzy profile image


      6 years ago from Arlington, Texas

      An excellent and well written article. You covered many areas of interest to someone wanting to start a business and live in Costa Rica

    • profile image


      7 years ago from San Jose Costa Rica

      The article mentions the banking system in Costa Rica. We have two types of banks. One is public banks that are run by the Costa Rica Govt. Your deposits are insured.

      The other banks are private. Your deposits are not insured.

      Lic Giovanna Barrantes


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