If you are one of the many people who come to Costa Rica and buy property for investment purposes then you would be keen to the trends in tourism. Costa Rica has been growing every year in tourism for the past 10 years and all indicators point to continued growth. For rental property investors or if you are considering buying a Costa Rica property the report below can give you some good indication of the potential earnings.

Costa Rica Tourism Report Q1 2010

After increasing from 2.06mn in 2006 to 2.29mn in 2007, the report expects arrivals to have increased to 2.51mn in 2008 before dipping down to 2.29mn in 2009. Arrival numbers are forecast to tick up again in 2010, and to grow to 3.5mn in 2014, at the end of our forecast period. The majority of tourists visit Costa Rica during the peak season (January-May) and come from the Americas. Arrivals from the country’s three most important source markets – the US, Nicaragua and Canada – increased steadily during 2004 to 2007. However, looking at the inbound tourism data by region, although 2008 continued to trend upwards in North America and Latin America, the report is forecasting arrivals numbers from both regions to decrease by 9.45% and 8.60%, respectively, in 2009. The next most important source markets in terms of arrivals are, in order, Panama, Mexico and Spain.

The main growth drivers for the industry are ecotourism and health tourism. Costa Rica has 32 national parks, eight biological reserves, 13 forest reserves and 51 wildlife refuges. The industry is estimated to suffer slightly in 2009 due to the ongoing recession, particularly in the US, and the H1N1 virus (swine flu), however it is forecast to see relatively quick turnaround beginning in 2010. The continued expansion of the Daniel Oduber Quirós International Airport in the north and the growing amount of chartered flights from Europe all have the potential to drive growth in the market. Furthermore, the planned development of the Caribbean province, looks set to bring more tourists to this less-developed Costa Rican province. Indeed, already the province’s port has served as the finish line for the Transat Jacques Vabre sailboat race in 2009 and the race is scheduled to finish there in 2011, 2013 and 2015 as well. The port has also been added as a port of call in 2010 to two luxury cruise liners’ schedules.

Costa Rica’s tourism industry is a major contributor to the economy, accounting for about 7.8% of GDP in direct terms in 2008 and nearly 3% of total employment in 2006 – 49,000 individuals – according to data from the World Tourism Organization (UNWTO). However, the industry’s contribution to GDP is forecast to steadily decline, from 7.1% in 2009 to just 4.6% in 2014. Collective government expenditure on tourism was an estimated US$29.7mn in 2008, a 4% increase year-on-year (y-o-y). Collective government expenditure is forecast to slump slightly in 2009 to 27.9mn, bouncing back to 30.0mn in 2011. Expenditure is then forecast to rise to 35.5mn by the end of the forecast period in 2014. The government has proposed a tax on inbound airfares. The legislation, which has yet to pass in the Assembly, requests the addition of a fee of US$15 to all airfares, to replace the current 3% hotel tax. Part of the revenue from the tax, which is expected to be more than US$80mn a year, will fund some activities of Instituto Costarricense de Turismo (Costa Rican Tourism Board, ICT), including marketing, promotion and planning. The change in taxation came about due to the increasing amount of condominium and other private rentals that were not included under the umbrella of the hotel tax. New hotel developments are ongoing in the country, with major international companies including Intercontinental Hotels Group, Marriott Hotels & Resorts and Barceló constructing hotels near the beaches and in urban centres.

If you are interested in learning how to purchase a condominium or beach home for your own enjoyment or to earn rental revenue, please call Lisle Head at 866-403-1345 Lisle can discuss your options with you that are the right ones! Coldwell Banker Jaco prides itself on its integrity and its track record of success. Take a look at our Costa Rica Real Estate Testimonials section, these are real people just like you.

To get a copy of the complete report you can find it here

As one of our sister sites mentioned back in March 2009:

“In order to mitigate the effects of the economic crisis on Costa Rica, the Costa Rica Tax Administration authorized a special accelerated depreciation for all new assets (as in tangible property) increasing the acceleration of the useful life to 60% from the previous 50%. This measure applies to all new assets purchased from January 2009 until the end of the year. The move comes as part of President Arias’s new “Shield Plan” that hopes to protect the country from recession by implementing a series of temporary fixes to promote commerce and protect Costa Rica jobs.”

On one hand, the Costa Rican government is offering local businesses the opportunity to get some tax relief while the raw investors or new capital infusion is being heavily taxed. Today is the first day of the newly coined term “Luxury Tax.” This tax is directed at the rich. In Costa Rica, being rich means earning more than $50K per year, which makes this tax applicable to almost every investor who chooses Costa Rica. For this tax, it is any dwelling that is valued at more than 100 million colones, converts to $171,000 based on todays currency conversion.

The tax is for a period of 10 years and is calculated on the value of the Costa Rica property. Under Article 6, tax is based on market price. This will of course now draw in more issues since what a property is worth in Costa Rica is totally subjective despite investment records since there is not a standardized valuation process. In addition, there is no mention of how the tax will be assessed for dollar investments. Most investors buy property using dollars and all transaction data is in dollars,what will be used to assess the tax? Dollars or Colones?

Another noteworthy mention is Article 5 of the new tax law. Article 5 includes Maritime Zone concessions will have to pay the same tax even though they do not own the land the dwelling is built on. The government makes no excuses for this tax, they said the proceeds will be used for “social programs” The government hopes to collect $45,000,000 per year for the next 10 years.

If you need a tax advisor, please take a look at our Costa Rica Business Directory which offers you reputable professionals in the Jaco area.

If you are a surfer or have always promised yourself you would learn one day, Costa Rica is the place for you. The ISA chose the Jaco Beach area of Costa Rica to host this year’s World Surfing Games over other famous surfing destinations like Brazil and even South Africa. The 2009 Billabong World Surfing Games was held in Costa Rica this year at Hermosa Beach just south of Jaco. Billabong and the ISA chose Jaco Beach, Costa Rica because of the beaches and that Jaco has the infrastructure to house a large number of visitors.

I, myself, live in Jaco. I can fully appreciate “the best of both worlds” that this area has to offer. Jaco is a great city with all the comforts of home and yet travelling just a few miles in any direction can lead you to exotic rain forests, incredible uninhabited beaches and beautiful mountains. And as both the ISA and Billabong have so graciously pointed out; Costa Rica has the best waves anywhere in the world.

The cost of living here is really low, especially compared to the United States and I have been advising clients for years to consider buying an affordable home or condo in Costa Rica for any one of three great reasons:

1. It makes a great vacation or second home, especially if you love to surf
2. It is a great “plan B” if things get really bad in the US
3. This is an incredible place to live; there are new jobs coming here all the time, the cost of living is low and it is absolutely beautiful here

Any avid surfer would do well to consider relocating or at least having a vacation home in Jaco. Many of my friends have relocated here and spend a good part of each day surfing while working online remotely and none of them, myself included, would trade this life for anything in the world.

People in the United States are becoming increasing concerned about losing their jobs and it’s not just auto-workers and other manufacturing jobs that are disappearing—it’s the college educated white collar jobs that are on their way out. As if things in the US weren’t bad enough already, more and more companies are moving their operations off-shores in search of greener pastures. Many smart Americans are following suit and looking for their own greener pastures as well and Costa Rica is looking pretty green these days—in more ways than one.

While people in the US are growing increasingly concerned over a depressed economy, a horrible real estate market and fewer available jobs, people in Costa Rica are celebrating a lot of projected growth in these areas. HP recently announced that 3000 new jobs were opening up in Costa Rica and other big name companies like Proctor and Gamble, already have a growing portion of their company’s good jobs located here.

If there was ever a good time to consider relocating to another country it is now. If there was ever a great place to relocate to—it’s Costa Rica. This is a beautiful country with a bright future ahead. There is just something about this place that makes it feel like home. I moved here from California back in 1995 and I have never looked back. It was probably one of the best decisions I ever made and I am increasingly thankful not to be facing the economic difficulties that many of my friends and family back home are dealing with now.

So what does your future hold? Growth, stability and promise or dread and uncertainty? I would urge you to think about making a change before it’s too late…at least have a back-up plan in place.

While news in other parts of the world talks of downsizing and disappointment, Costa Rica continues to thrive. More evidence of this phenomenon that I have been sharing with you is that additional funding for the Juan Santamaria International Airport this week. A bigger and more up-to-date airport helps support the image that Costa Rica wants to show to the rest of the world and helps them establish themselves as the exotic yet business savvy country that they are becoming. Everyone knows that first impressions are lasting and a person’s first impression of a country they are visiting begins in the airport.

Another positive note for the airlines and Costa Rica is that a recent deal was struck between Canada and Costa Rica allowing an open-air agreement. This allows “select pair cities” to offer seats on other airlines’ flights to allow visitors to find a more convenient flight to Costa Rica. Combine that with the recent addition of new flights from the US to Costa Rica on JetBlue airlines and you will quickly see how it is becoming more and more convenient for people to get here.

This is just another sign of Costa Rica’s upward progress as new jobs continue to come into the country and the business here continue to flourish and more and more people are coming to Costa Rica to do business. I, for one, remain optimistic that the economy around the world and in the United States is going to get better sooner than later, but meanwhile I know for sure that the economy in Costa Rica is moving from good to great right now. I can’t state this enough, the time is now to secure real estate here while the prices are still reasonable and there is still plenty to go around.

Real estate professionals expect that the real estate in Costa Rica will expand two fold in the next five years. The Costa Rican government has made it easier for foreign investors to inject capital into the moderately utilized industry through proper laws. As such, the government treats both local and foreign investors the same with no extra taxes or duty to foreign investors.

Prime land favorites among investors include Costa Rica oceanfront real estate, which targets the beachfronts. The mountainous countryside and other areas with wonderful sceneries and climate are also included. Except through the winter months, Costa Rica has a moderate good climate, which offers homeowners an edge when selling their property to Europeans and North American residents. This is because the country borders the Pacific Ocean and the Caribbean Sea to the east and west respectively.

The Costa Rica real estate industry is diverse. Depending on whether the person has met the standard requirements of planning and development, he or she can develop condominiums for leasing and commercial property residential homes. However, unlike what one would expect, the local Costa Ricans do not invest much in the real estate industry, as a result, the industry is relatively inactive and only vibrant when the European and North American markets target Costa Rica estate investment.

The resulting low demand often gives people investing in Costa Rica real estate ideal opportunities through which they can get prime property at fair prices. Property sellers often let the potential buyer rent the property first before finally deciding on whether it fits their needs. A house can either be furnished or unfurnished, with the previous attracting a higher price meant to cover for the cost of furniture. Furnished houses are less popular as most investors prefer choosing their interior furnishings.

The beautiful, warm Costa Rican climate and the friendly people are among the main boosters for the industry that keep on bringing more investors to the country. Getting property in the country is also easy as the public is conversant with property development in their area, and all one needs to do is ask

Costa Rica Business Set to Benefit from New Tax Law.

In order to mitigate the effects of the economic crisis on Costa Rica, the Costa Rica Tax Administration authorized a special accelerated depreciation for all new assets (as in tangible property) increasing the acceleration of the useful life to 60% from the previous 50%. This measure applies to all new assets purchased from January 2009 until the end of the year. The move comes as part of President Arias’s new “Shield Plan” that hopes to protect the country from recession by implementing a series of temporary fixes to promote commerce and protect Costa Rica jobs.

Accelerated depreciation refers to any one of several methods by which a company, for ‘financial accounting’ and/or tax purposes, depreciates a fixed asset in such a way that the amount of depreciation taken each year is higher during the earlier years of an asset’s life. For tax purposes, accelerated depreciation provides a way of deferring corporate income taxes by reducing taxable income in current years, in exchange for increased taxable income in future years.

According to the Costa Rica Tax Administration, the accelerated depreciation is a smart move to confront the weakening economy by promoting investment because this measure allows companies a larger deduction when determining how much income tax is due. This should help soften the decision to acquire new assets when the world’s economists are telling people to save big purchases for later.

Once this resolution is published in “La Gaceta” it won’t be necessary for companies to specifically request authorization to use the special accelerated depreciation from the Tax Administration. The only requirement is that the owner prove that the assets were acquired during 2009. This can be proven with the accountant register or with legal documents.

For more information about Costa Rica tax laws, please contact ICS Tax: www.icstax.com

Foreign Companies Offering Business Opportunities and Jobs in Costa Rica.

A group of representatives from 19 Spanish companies will visit Costa Rica this week to promote business between the two countries. The goal of the business mission, which will take place mainly next Thursday and Friday, is to contact new clients and search for local representatives and distributors for their products and services. The visit is being coordinated by the Official Spanish Chamber of Commerce and Industry in Costa Rica.

The visit will represent business opportunities across many distinct sectors including book publishing, lamps and lighting, white line furniture, car parts and accessories, information systems, consulting and industrial welding. The business representatives will meet with those interested in negotiations via planned meetings.

Costa Rica exports about million annually to Spain and imports about 0 million, according to Procomer, the Promoter of Exterior Commerce. Pineapples represent 34 percent of total exports to Spain, while the top imports include petroleum, ceramics, medicine and books.

Multinational Jobs

In addition to business opportunities with Spain, a bilingual job fair set for this Feb. 20 through Feb. 22 will offer 3,500 jobs in Costa Rica from many large multinational companies. The fair, organized by the Costa Rican Investment Promotion Agency (CINDE) will be held at the National Cultural Center in the old National Liquor Factory.

A total of 27 companies will be on hand to accept resumes and arrange interviews with anyone interested, granted you speak Spanish and English. Companies include Citibank, Fujitsu, Western Union, Amazon.com and Sykes.

After last Saturday’s job fair at the Colegio Universitario Boston in San Jose saw 5,000 people show up to apply for 1,000 positions, it is recommended that those interested arrive early if you hope to get to the front of the line! This job fair invited 14 companies including McDonalds, Pricewaterhouse Coopers, Credomatic and Empleos.net.

For more information about this weekend’s bilingual job fair, visit www.cinde.org.