You probably heard that Joaquín “El Chapo” Guzmán got caught again. If you don’t know who El Chapo is, Univision will air a series later this year on the life of the notorious Mexican drug lord.
In the early ’90s, a client of mine brought a suitcase of money to Costa Rica, as if he had just robbed a bank. It was pretty normal back in those days to buy real estate in cash. We had cash buyers all the time then, and people would bring stacks of dollar bills. This client wanted to purchase a restaurant and I had a very well-known steakhouse for sale for $35,000.
I remember the amount well because I helped him count it and it fit in a supermarket bag. I’d be scared as hell to get involved with something like that today. After negotiating back and forth for a couple of weeks, we didn’t get anywhere, so we went to the restaurant to meet up with the owner. When the buyer put the stacks of cash on the table, the seller was ready to sign the papers — $35K is an impressive sum when you can actually smell it.
Drug trafficking creates a tremendous need for money laundering, which the Costa Rican government tries to control through SUGEF, which is the reason it’s almost impossible to open a bank account in Costa Rica if you are not a citizen or a resident. That’s why I always recommend using a closing attorney with an escrow account for purchases of real estate in Costa Rica purchase and to open your own bank account once you have received your DIMEX residency card.
Banks in Costa Rica are very quick at calling you a money launderer even if you just send a couple of hundred grand to buy real estate in Costa Rica without supplying the necessary documents. I’ve had clients send small amounts of money from the States for their home remodel every other week who have been called money launderers. I have had clients who had a security company in Afghanistan (they were from Texas) and were rejected by a well-known bank to open a bank account because of the location of their business.
I don’t think that banks in Costa Rica treat everyone like that now. As long as you are not trying to hide a ton of money and you show them where the money is coming from, you should have no problems at all.
When you send the funds to purchase real estate in Costa Rica to an escrow account, the escrow administrator is also obliged to prove where the funds came from, so you better cooperate or don’t even try.
As you may know, unless you want to get into trouble, you should not carry more than $10,000 in cash on you when you travel, and it’s a good rule of thumb to follow when making wire transfers, too. You can wire less than $10K to your bank account without too many questions asked, but if you wire $9,900 every two weeks into your bank account in Costa Rica, the bank will freeze your account pretty soon. So don’t go there.
My main message to you is to get organized when bringing your money to Costa Rica and do it well ahead of the closing date. Don’t wait too long; I have seen money frozen by the banks and buyers and sellers becoming nervous wrecks unnecessarily because the money was not available at closing.-
Ivo Henfling, a Dutch expat who has lived in Costa Rica since 1980, founded the American-European Real Estate Group back in 1999 as was the first functioning MLS with affiliate agents from coast to coast. You can contact Ivo at (506) 2289-5125 / 8834-4515 or at [email protected].