By Brians Salazar Chavarria, GM Attorneys at Law
Not All Closings Are Created Equal
Every week, buyers walk away from a Costa Rican closing feeling accomplished. The wire cleared, the deed was signed before a notary, and champagne was opened somewhere with an ocean view. And yet, a surprising number of those buyers are sitting on a legal structure, or the absence of one, that will quietly create problems for years to come.
There is a distinction that too many foreign buyers miss: acquiring a property and properly structuring that acquisition are two entirely separate conversations. One answers the question, “Did we close?” The other answers, “Are we protected?” An experienced attorney should be asking both from day one.
Who Should Own the Property? It Depends.
Costa Rica offers foreign nationals the same property rights as citizens when it comes to titled land. You can own real estate freely, with no requirement to partner with a local. But who or what holds title is a question with real legal and financial consequences.
The three most common ownership vehicles are personal name, a Sociedad Anónima (S.A.), or a Sociedad de Responsabilidad Limitada (S.R.L.). Holding in your personal name is simple and inexpensive, but it exposes your personal assets to any liability arising from the property and complicates estate planning considerably for non-residents. An S.A. functions much like a corporation, with transferable shares, making it a popular vehicle for transactions and for holding multiple assets. An S.R.L. is closer to a limited liability company, offering liability protection with a more flexible governance structure and generally a lower administrative burden. Neither is inherently superior. The right choice depends on your country of residence, your family structure, how you intend to use the property, and whether you plan to resell or develop.
Consider this scenario: a retired couple from Canada purchases a beach property in their personal names because it “kept things simple.” Two years later, a guest is injured on the premises. Because the property is held personally, the couple may face broader personal exposure in the event of a civil claim, potentially extending beyond the property itself. A properly maintained corporate structure could have created a clearer layer of liability protection.
Structure Affects More Than You Think
The ownership structure you choose on Day One shapes four critical areas for the entire life of your investment: liability protection, estate planning, financing options, and future resale.
A properly maintained S.A. or S.R.L. creates a legal boundary between the property and your personal patrimony. Without it, that boundary simply does not exist. Passing a property held in a corporate vehicle to heirs is often simpler and less costly than a formal probate process, especially when the heirs are not Costa Rican residents. Most buyers rely on seller financing or offshore credit, and the structure of ownership directly affects what instruments are available and how they can be secured.
On resale, buyers sometimes offer a premium for properties held in a corporate structure because a share transfer can mean lower government transfer taxes. Understanding this at the outset gives you negotiating flexibility later.
What the Registry Says Is What the Law Sees
Costa Rica’s property system is built on a principle as foundational as it is simple: what is recorded in the Registro Nacional (National Registry) is, in the eyes of the law, what exists. The Registry operates under the doctrine of publicidad registral, meaning registered information is presumed accurate and valid as against third parties. An unrecorded agreement, an oral promise, or a handshake deal carries essentially no legal weight in a dispute over title.
What does this mean in practice? Every lien, every mortgage (hipoteca), every usufruct (a third party’s right to use and enjoy the property), every easement (servidumbre), and every court-ordered annotation appears in the Registry, or it does not legally affect the title. Your attorney’s job is to read that record completely, not selectively.
Knowing how to properly use the Registry’s available tools also matters. For example, the Registro Nacional’s “Alerta Registral” system allows owners to receive notifications when filings are made against their property or corporation; a practical safeguard that some attorneys still overlook or fail to properly explain to their clients.
Due Diligence: The Step Most Buyers Rush
If there is one phase where buyers consistently cut corners, it is due diligence. Whether from excitement, competitive pressure, or the mistaken belief that a real estate agent has already “checked everything,” skipping this step is where things tend to go wrong. A thorough due diligence process in Costa Rica covers three distinct layers.
The title study reviews the property’s registral file, its chain of ownership, and the existence of any encumbrances, liens, annotations, or court-issued measures that could affect the transfer. Cadastral alignment confirms that the surveyor’s plan (plano catastrado) is formally associated with the property’s registration number (its folio real) and matches in measurements, boundaries, and location. Discrepancies are common and can range from minor administrative issues to disputes that take years to resolve. The third layer covers municipal and regulatory compliance: Are all property taxes current? Is there an outstanding balance with the water utility? Does the certificado de uso de suelo (land-use certificate) confirm that your intended use, whether residential, commercial, or rental, is legally permitted on that specific plot?
A client once found what seemed like the perfect property, right location, right price. Excitement is natural, and the temptation to move fast is real. We ran the due diligence first, and it surfaced an annotation the seller needed to clear before closing. It took a little longer. But my client purchased a clean title, with no surprises waiting on the other side.
One further issue deserves special mention: if the property is within or near Costa Rica’s Zona Marítimo Terrestre (Maritime Zone), different rules apply entirely. Much of this land is held not by fee-simple title but by concesión (a government-granted concession), and there are meaningful restrictions on who may hold those concessions. Foreign nationals with fewer than five years of legal residency, and corporations with more than fifty percent foreign-held capital, face significant limitations. Buying “beachfront” without understanding whether you are purchasing titled property or a concession is one of the most consequential mistakes a foreign buyer can make.
The Bottom Line
Buying property in Costa Rica is genuinely accessible for foreigners, and in most cases the process is transparent and well-supported by a solid legal framework. But accessibility is not the same as simplicity. The legal decisions that happen around the closing table, and the structure that frames your ownership long before that table is even set, will determine whether your investment is truly protected.
The acquisition is the transaction. The structure is the strategy. And the best time to get the strategy right is before the transaction closes, not after you are already living in the house.
At GM Attorneys at Law, we have spent years guiding foreign buyers through every stage of this process — from ownership structure decisions to title studies to closing — and beyond. We understand the stakes, and we take seriously the responsibility of protecting what our clients are building here. Whether you are at the research stage or days away from signing, our team is ready to walk alongside you.
Please do not hesitate to contact us at info@gmattorneyscr.com. You may also find additional topics of interest on our website blog at gmattorneyscr.com/blog.