Investments in Residential and Commercial Development

Business Parks, Call Centers, Corporate Headquarters and Institutional Properties

Costa Rica has a good number of commercial and industrial parks called "Zonas Francas". The procedures for establishing a business in a Zona Franca property can be explained by CINDE, a consulting firm that offers mainly free services to foreign investors. ( See www.cinde.org ) Zonas Francas offer some tax advantages for investors, although these will eventually be reduced or eliminated by requirements of the World Trade Organization. Costa Rica also offers some incentives for investment in rural or less developed regions, which have the added benefit of lower labour and property prices.

While Costa Rica does not rival India for international call centers and sports booking, there is an influx of such businesses to the degree that bi-lingual personnel are in short supply. The country has the advantage of being in the same time zone as the central USA.  Tucan Realty's commercial and industrial property include a number of locations appropriate for a call center, mainly situated outside central San Jose.

Residential Development and Commercial Projects

Purchase of properties for residential development is a good business in Costa Rica with investors enjoying a healthy balance of returns and security. Many properties are suitable for lot segregation and sale of lots, or for sub-division and construction of condos or homes - we offer a range of such properties in our listings database.

In recent years Costa Rica has experienced a construction boom, especially on the Pacific Coast (although in recent years declining in viability), mostly homes and condos catering to affluent foreigners and condos and residential communities, many at very reasonable prices, in the metropolitan area of San Jose. Most people who purchase a lot to build a home or buy a new home are middle income Costa Ricans, immigrants from Colombia, Venezuela, and Nicaragua, or Americans, Canadians, and Europeans seeking a retirement location or younger foreigners seeking a new life in the land of "pura vida".

The government of Costa Rica also provides subsidies for low income persons to purchase a home and there are some developments serving this population. Due to the ever-increasing cost of land near beaches and in and close to San Jose, residential projects are moving out into more outlying area such as San Ramon and the Northern Zone. These are the areas where the properties we list are mainly located. Expressways are being built west and north from San Jose to serve the areas where the population is moving.

Most of the land suitable for residential projects has been in agricultural use. Zoning in the Plan Regulador in most municipalities for farm properties is usually with residential development permitted without zoning variance on 1.75 acre interior lots and 500 square meter lots on public road frontage. Interior land sub-division in smaller lots or condominium will usually require an application process. The staff at Investments and Properties El Tucan will have on file a Plot Map (Plano Catastro) of the property, a title search (Consulta de Registro Nacional) indicating ownership, and a zoning statement (Uso de Suelo) specifying allowed land usage. In some cases we have prepared a Development Plan for the property and if we do not have one we are prepared to design one based on the investor\'s ideas about the type of development projected. Development Plans will indicate land acquisition costs, infrastructure costs for roads, electric, telephone and water services, technical, survey, and permitting expenses such as an Environmental Impact Study if required, and projections of income from lot or home sales. If sales go as projected the initial investment can be recovered within five or so years and a substantial profit generated in years thereafter.

A residential or commercial/industrial project must have a sound development plan designed by an architect and then the approval of regulatory agencies.

• A green light from the Municipality according to its Uso de Suelo
• A subdivision survey by a topographer and soil engineering study.
• Design of a Master Plan for the project, usually by an architect.
• Authorization by the local water administration authority assuring water supply.
• A permit from INVU, the Housing Authority.
• Coordination with the Instituto Costarricense de Electricdad, ICE, for electric and land line telephone service provision.
• Approval by SETENA, Secretaria Tecnica Nacional Ambiental, an overworked office of the Ministerio del Ambiente y Energia (they may require an Environmental Impact Study).
• A developer may wish the services of a project management specialist, we can recommend.
• If homes are be to constructed, a contract with a local builder.

The staff at Investments and Properties El Tucan will guide the investor through this process. El Tucan works with investors who are serious about respect for the environment. We have no interest in working with expensive beach condos or coastal developments that are destructive of the environment.

Links for additional information about residential development projects:

• For more detailed information on land development consult Landcolaw.com
• For information on procedures and permitting see www.tramitesconstruccion.go.cr

The most difficult and time consuming procedure is the permit from SETENA, see MINAE environmental permits (Spanish)

There is also much general information at www.visitcostarica.com, and for guidance on foreign investment consult CINDE, an agency that promotes foreign investment and provides free services: www.cinde.org

If the project might involve tourism, see the information and incentives provided by the Instituto Costariccense de Turismo