Costa Rica REI PROs-CONs | Dos and Don'ts asks MagicBrad
I'm working on a project in Coast Rica.
It's a hybrid of REI, Vacation Rental, Travel and Event Management.
With me being based in the United States (Minneapolis, MN) I'm interested in learning of some of the issues that might arise.
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Hi MagicBrad,
The first thing I would look at are property rights and whether you can legally own property in Costa Rica. Here is something from a quick Google search:
http://www.therealcostarica.com/realestatecostaric...
I have had numerous clients who were swindled out of hundreds of thousands of dollars by investing overseas. These problems ranged greatly but here are a couple I have dealt with:
1. Paying but never acquiring title - the person who sold it didn't have ownership and was communicating property laws which weren't correct.
2. The mayor in the foreign country went in and changed the title of the property to their name.
3. Couple of clients have received calls from people saying that someone else is trying to sell their property.
4. Someone selling a property was met by several people with ARs and briefcases full of cash to purchase the property.
Your post doesn't seem clear but it also confuses your tax reporting. You may have to file form 5471, you may now have FBAR requirements, and Costa Rica may require you to pay taxes there in addition to US taxes.
In any instance I would get your ducks in a row before starting, foreign investments can be rewarding but I have only seen VERY expensive problems.