Frequently Asked Questions - Part Two

Banks & Money

There is an ample selection of state owned and privately held banks in San Jose, and throughout the country. The official currency of Costa Rica is the colon. However US dollars are widely accepted. US dollars and travelers checks can be changed in banks and hotels. Most major credit cards are widely accepted, and cash advances can be obtained at banks around the country and a variety of places throughout San Jose.

Economy

You don't have to drive very far in Costa Rica to see coffee and banana plantations, and to realize that agriculture is the basis of its economy. Coffee has historically been the country's most important crop, and Costa Rica continues to produce some of the finest coffee in the world. In recent years less traditional crops have been playing an increasingly important economic role. Bananas are the second most important export crop, with vast plantations covering parts of the Caribbean lowlands. There is also significant land dedicated to the cultivation of pineapples, sugar, oranges, hardwoods and ornamental plants, as well as raising cattle for beef and dairy products. Though agriculture remains the basis of the national economy, tourism has earned more than the export crop during the last few years and the tourism industry continues to grow, providing employment opportunities and stimulating new construction and home sales.

Tourism

Tourism has become an integral part of Costa Rican economy. Over 1,000,000 people visit yearly and spend over 11 billion dollars annually visiting its rain forests, volcanoes and beaches. The Four Seasons Hotel Group recently invested $30,000,000 in the North Pacific. Marriott, Best Western, Radisson and Inter-Continental Hotels are building resorts to accommodate the increasing number of tourists from South America, North America and Europe.

Government

Costa Rica enjoys one of the most stable democracies in the world. Costa Rica's system of government is very similar to that of the United States of America.

There are three branches of government:

• Executive, which consists of the president, two vice presidents and cabinet;
  
• Legislative Assembly, with 57 individually elected deputies; and,
  
• Judicial Branch, which consists of civil, criminal, appellate and constitutional courts.

The president and members of the Legislative Assembly are elected for four-year terms and the president can't run for reelection. The president is Dr. Abel Pacheco. When Costa Rica abolished its armed forces in 1948, it created an economic boom. Major corporations from all over the world started investing heavily in Costa Rica because of its economic stability, its healthcare programs and its education systems.

• Highly educated, skilled, easy to train and productive human resources at a reasonable cost
• Political, economic and social stability
• Legal guarantees, predictability and economic freedom ¥ Strategic location in the center of the Americas, with the same standard time zone as U.S. Central.
• Export-oriented infrastructure, reliable power and advanced telecommunications
• Preferential access to important markets
• Attractive tax incentives
• Free professional assistance from CINDE (www.cinde.org)
• A growing economy
• Industry
• Tourism

Real Estate

Foreigners do not have to live in Costa Rica to own property hereReal estate development is the fastest growing industry in Costa Rica. American companies, such as, Intel, Proctor & Gamble, Merck, Pfizer and AT&T are just a few of the major business entities whose investments clearly indicate that additional properties for commercial and particularly residential developments will be in demand. American, Delta and Continental Airlines are adding flights to accommodate an already growing schedule to Costa Rica.

REGISTRATION OF A PROPERTY

Costa Rican properties are registered at the Registro Nacional (National Registry), which keeps track of all the title registrations. It is a great resource for verifying the status of a title or claim associated with a property.

TAXES

Property taxes equal 0.25% of the declared value of the property. The closing costs of a sale include a transfer land tax, a stamp tax, and legal fees. Closing costs run about 5% or 6% of the sale price, an expense divided evenly between buyer and seller. Transfer land tax and stamp tax assessments are based on the declared value. Legal fees are based on the selling price of the property.

Infrastructure

Costa Rica's most valuable natural resource is its fertile volcanic soil. Forests of oaks, pines, and tropical hardwoods cover about a third of the country's land. Costa Rica also has small deposits of bauxite and manganese. About a fourth of Costa Rica's workers are engaged in farming or ranching. Bananas, beef cattle, cacao (seeds used to make chocolate), coffee, corn, rice, and sugar cane rank as the chief agricultural products.

Manufacturing employs about a fifth of the labor force and is growing rapidly. The leading manufactured products include cement, clothing, computer chips, cosmetics, fertilizer, furniture, machinery, medicines, processed foods, and textiles. Costa Rica's economy depends heavily on foreign trade. Its leading exports include bananas, beef, coffee, computer chips, and sugar. Its chief imports include petroleum, chemicals, and manufactured goods. The United States is Costa Rica's major trading partner. Costa Rica belongs to the Central American Common Market, an economic union that was formed to stimulate trade among its members.

Communications

Costa Rica has one of the most advanced telecommunications systems in Latin America, with telephones and fax machines all over the country, and an increasing number of businesses are online. To call or fax Costa Rica, dial 011 and the country code 506 before the number. There is also mail service, and a wide selection of courier services in San Jose. Most large hotels in the San Jose area have cable TV, with US and European stations. Newspapers and magazines from North America and several European nations are sold in many shops and hotels in and around the capital.