The help you need to sort out the credit bums

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

Editor's Note: While this article was accurate at the time of publication, some information may now be outdated. We are currently preparing a comprehensive update. Sign up for our Alerts to be notified as soon as the revised content is live!

Foreigners and expats here have a tool to check out potential employees, contractors, domestics, and even real estate brokers and other business associates.

And they really need these tools.

As an example, 75 percent of the applicants to a recent clerical job opening in Costa Rica had serious credit problems.  Employers need to know this information because many believe that individuals up to their eyeballs in debt are more likely to steal on the job.

The tool is the six credit reporting agencies in Costa Rica.

Over the past 14 years, Costa Rican companies have used the information found in these databases to make credit decisions, much like in the United States.  However, here, only bad credit is reported, unlike the United States where good credit is calculated into a FICO score.  FICO is a mathematical model created by the Experian credit bureau as a tool for lenders to use in evaluating the risk associated with lending money.

Foreigners will have to list assets to avoid tax

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

Editor's Note: While this article was accurate at the time of publication, some information may now be outdated. We are currently preparing a comprehensive update. Sign up for our Alerts to be notified as soon as the revised content is live!

Instructions on how to kill the goose that lays golden eggs.   

Step 1: Restrict the inflow of capital by taxing it 10 percent upon arrival in Costa Rica.   

Step 2: Make bringing money into Costa Rica as difficult as possible.   

Step 3: Tax the money heavily once it is here.

Article 7, Section 4 of the proposed fiscal plan assumes all passive income comes from capital of Costa Rican origin unless proven otherwise to the tax people. The burden of proof is on the taxpayer.

Passive income is income from activities in which the taxpayer does not materially participate, as in all rental activities, investment income like interest, dividends, and capital gains, and other forms of income like royalties and alimony, etc.

Under the new tax plan, all passive income will be taxed at 10 percent.

Foreigners moving to Costa Rica for the first time will have a grace period of one year to “patriate” or provide a detailed list of their assets outside of Costa Rica.