Costa Rica Business Prospects – “Excellent” According To New Deloitte Report

Scott Oliver – May 2010

Oh! No! Scott’s found even more positive news about retirement living and business in Costa Rica?

Deloitte is an audit, tax and advisory firm that has a global network of companies and members in 140 countries and, the title of their new April 2010 report about business in Costa Rica refers to: Excelentes perspectivas para el futuro empresarial or, Excellent prospects for the future of business.

Some of our VIP Members happily living here are now have giving me a tongue-in-cheek hard time saying things like: “Scott, what you write about the cost of living in Costa Rica is too true to be tolerated. Please withdraw this article immediately or we’ll be awash in the unwashed of the Northern Hemisphere looking for a place they can survive and thrive. Can’t we just keep Costa Rica our little secret?”

When Deloitte says Costa Rica’s business prospects are “excellent”, isn’t that great news?

Costa Rica Business Prospects – “Excellent” According To New Deloitte Report

When the President of Intel, Paul Otellini says the education system in Costa Rica is “outstanding”, and speaks of his “…incredible engineering team” in Costa Rica and raves about the: “…caliber and quality of the people who work here”, that’s not just great news for entrepreneurs thinking about setting up new businesses in Costa Rica, having a polite, well educated, multi-lingual society is good for everyone living in Costa Rica, including retired people, right?

Deloitte has previously published their Business Barometer report for Spain, Mexico, Argentina and Panama, this is the first time that they have completed the study on Costa Rica.

Good employment outlook and positive expectations

Here are a few highlights from the new April 2010 Business Barometer report done by Deloitte which involved a total of 110 companies in the country who employ 57,100 people and, have an annual turnover of US$10 million:

1. Most of these companies in Costa Rica aim to maintain or increase their staff levels in the next year. Only seven in 100 of them say they may reduce their staff levels.
2. These employers have no plans for layoffs in 2011, in fact 46.3% of them plan to hire more staff.
3. This increased employment outlook means that 74% of respondents felt that they would be paying their workers more over the next 12 months, no one considering a reduction in pay.
4. For 2010, most respondents (46.7%) said they expect the wages to increase by about 5%. For the same year expected inflation by 49% of respondents, would be between 5% and 7%.
5. This projection is similar to that estimated by the Central Bank, whose inflation target of 5% this year.
6. In line with the recovery in Costa Rica, 43.3% felt that production last year improved and 81.8% of respondents believe their companies will expand over the next twelve months.
7. 66% believe the economy is now in a better position than a year ago, 78% believe that there is now a better investment climate, and the same percentage said that unemployment is lower, compared with a year ago.

Higher production and much better than last year.

Alan Saborio, managing partner of Deloitte said that “…the economic recovery has been faster than we all thought.”

In conclusion, the vast majority of business people in Costa Rica and Deloitte believe that Costa Rica has a promising and very optimistic future.

READ ORIGINAL ARTICLE HERE

by Jeff Hickcox

Moving to a foreign country comes with many challenges including finding appliances and furnishings for your new home.  From time to time a new home hits the market “turnkey” with all furnishings, appliances and utensils. This is one of those special homes.

Comfortable kitchen

The seller is highly motivated on this high-quality 2,500 sf home on over a 1/4 acre of land is beautifully landscaped, completely fenced in, and has terrific views of the Central Valley and Puriscal mountain range.

Full of luxury, this single-floor home has 3BR – 2.5BTH with a solar-heated pool, 6-person jacuzzi, stainless appliances, 2-car attached garage and it’s in a great Atenas neighborhood.

Atenas is a small mountain town located about halfway between San Jose and the central Pacific beaches (both 30-minute drives with new highway). Said to have “El Mejor Clima del Mundo” (The Best Climate in the World), Atenas is home to a large expat population who enjoy the tranquility and convenience of this quaint agricultural town

This home is concrete block construction with fine finishing details including wood ceilings with recess lighting and quality ceiling fans, luxury fixtures, granite counter tops, custom cabinets, and top-of-the-line appliances, Sat TV, high-speed internet, electric front gate and an alarm system.

This home is well decorated and fully furnished including outdoor furniture. It is on of the only homes with a fully enclosed garage.

Great valley views

Located on a private road in a very desirable section of Atenas, the property is about 7 minutes from the town center. The neighborhood is an excellent blend of Ticos, Canadians, and Americans and has a local church, school, soccer field with playground, mini-markets, and a great local restaurant and bars. The elevation is around 2,700ft offering a wonderful year-round climate.

The owner must move back to the United States and is highly motivated. They are negotiable on the $349,500K price and open to financing some of the sale. This is a must see for anyone looking in this price range.

Cool off in your swimming pool.

See Virtual Tour of this Costa Rica Home

SOURCE — WeLoveCostaRica

by Michael Anthony

FR-5271-P-01 SAFE Mortgage Licensing Act: HUD Responsibilities Under the SAFE Act is just one more nail in the coffin of American independence: A government-issued license to sell your own property.

The proposal could become law as of May 31st and directly violates the 14th Amendment to the Constitution by depriving the right of the homeowner to dispose of their property as they see fit, free of state interference without due process of law.

Now that Americans have nearly zero access to credit through banks, and hardly anyone can qualify for traditional financing, this proposal aims to slam the door on any alternative route. As stated by Roman Mosqueda, S. J.D. in his article, “Proposed HUD Rule Prohibits Seller Financing Without License Except for Family or Own Residence,” the proposed rule impairs obligations of existing contracts protected by the Constitution in the following ways:

• The contract is the law among the parties. A property owner has the right to sell his or her property, including seller financing to enable a buyer short on cash to consummate the sale.
• Seller financing likewise enables a seller to sell his or her properties faster, and earn income during the duration of the promissory note being financed.
• The proposed rule would impair obligations of existing contracts in cases involving contracts to sell with seller-financing, lease with option to buy with seller financing, and other similar contracts.

This overreach of the SAFE Act has exactly the opposite effect as what the Act was intended to cover. HUD’s own Web site, states that the SAFE act was a major component of HERA (The Housing and Economic Recovery Act of 2008), which “constitutes a major new housing law that is designed to assist with the recovery and the revitalization of America’s residential housing market.”

This new rule actually hinders individual homeowners from aiding in their own recovery and gives more power and money to the very same industry that secretly bet on the U.S. housing crash. By requiring mortgage broker licensing, the individual’s right to the use of his own property is now strictly limited.

Furthermore, it limits any type of real recovery as bank financing simply is not possible in many cases, even beyond the “bad credit” equation, or tight lending policies — homes in flood areas, investment homes, or multiple homes owned but not occupied by the owner or the owner’s family, for example. Under the new HUD rules, even when these homes are owned free and clear, the property will no longer be yours to do with as you wish.

The following statistics posted on ActiveRain by a specialist in owner financing and lease options illustrate the vast limitation that the new rule puts on the real estate landscape across America:

• These rules would prohibit even partial seller financing – i.e. a “seller second.”
• According to HUD’s “Residential Finance Survey” in 2001, roughly 40% of all non-farm residential properties in the US are owned free and clear.
• An estimated 6 million Americans own a property other than their own primary residence.
• An estimated 4.5% of Americans own three or more properties, many purchased solely as investment properties.
• 40% of non-owner occupied residences are mobile homes which are more difficult to sell with bank financing.
• Approximately 5% of homes in US are for sale or for lease… seller financing may be key to liquidating this inventory.

As with all government legislation designed to intimidate those considering non-compliance, here are some of the more tyrannical points sourced from The RescueUS Project:

1. You cannot receive a license if you’ve committed any felonies – ever – meaning you’ll never be permitted to self-finance your property under any conditions if you’re a felon of any kind.
2. Mandates fingerprinting to finance your own property.
3. Threatens a $25,000 penalty for owners who fail to obey HUD’s rules.
4. Forces owners to complete 3 hours of Federal Law training.
5. Mandates owners complete 2 hours of federally approved “ethics” training.
6. Requires that owners complete 2 hours of lending standards training.
7. Puts upon all self-financing owners and their prospective buyers dramatically higher costs and decreased opportunities to engage private property transactions.
8. Stops you from exercising your own constitutionally protected private property rights until the government approves your conduct – and charges you for it.
9. HUD grants itself authority to summon you any time it chooses for a host of reasons.

The above scenario, if it does pass in the United States, is extremely unlikely in Costa Rica. Firstly, banks have no history of the type of predatory lending practices seen in the States. Additionally, seller financing and developer financing is seen as a legitimate parallel system that safeguards the Costa Rican economy during times of global stress.

To a certain extent, it is seller financing that has kept the housing market stable while banks correctly tightened their lending practices, which has allowed excess inventory to be depleted. As the well known US real estate investor Henry Kaufman said in his interview with Scott Oliver, “Costa Rica has made no mistakes during the crisis.”

And, now, as other nations — including the U.S. — are in mass crisis mode, or trying desperately to stave off implosion, Costa Rica has declared their economic recovery to be fully underway. In fact, home and development financing has returned with incentives as all of the major banks are now offering more attractive loan options.

While it is quite disturbing for many of us U.S. expats to see a decline in the most basic forms of independence upon which our country was built, we are doubly thankful to have found Costa Rica.

The article below posted on The Costa Rica News discusses a proposed boost to housing and the middle class in Costa Rica.

by IRENE VIZCAÍNO

The administration of Laura Chinchilla is proposing three alternatives to help increase the chances of the middle class to access credit for housing.

Through these initiatives, the new government intends to give a double whammy: one side will reactivate the construction sector and the other will help the deficit of 160,000 houses.

One alternative being prepared by the Vice President Luis Liberman is a bill to reform the Organic Law of Central Bank.

This amendment seeks to allow banks, mutual funds and other institutions that lend money for housing, to issue bonds for an eight-year period free of the legal reserve requirement.

“Everyone who has bought a home knows that in the first years you can drowned in fees,” said Liberman.

The official felt that this initiative benefits the borrowers and banks, but said that the latter can guarantee that people will risk buying a home and can repay the loan.

“Sounds interesting,” was all the manager of the Banco Nacional, Fernando Naranjo commented.

For its part, Guillermo Quesada, Bancrédito manager, endorsed the terms of the proposal, especially because exempt entities such legal reserve requirement may offer fixed rates.

NOTE FROM PARADISE PROFITS:  As the article below illustrates, traditional gold mining as conducted by large companies is horrible for the environment — particularly the use of cyanide and mercury in gold processing.  There is a new company that will be processing gold in an eco-friendly way.  For full details about this exciting development for Costa Rica — and the full support they have gained from the Costa Rican government — CLICK HERE.  Investors are currently being sought, with the potential to be paid dividends in physical gold.

By Mike McDonald
Tico Times Staff | mmcdonald@ticotimes.net

Digging in: An aerial view of the installations of the Crucitas gold mine in Costa Rica shows the lush setting that environmentalists say is endangered by the mine. The mine’s operators claim the operation poses little threat.

Photo courtesy of Infinito Gold Ltd.

From the pharaohs in Egypt to the forty-niners in California, through the gold standard days to today’s dazzling jewels, the precious metal’s shiny, imperishable glisten strikes awe in the human eye.

The coveted mineral’s magical sparkle has costs that some claim go far beyond what it fetches on the market, but few can deny its unparalleled power.

This force has captured Costa Rica.

Gold deposits in the developed world have been largely diminished and most of the golf ball-size nuggets have been mined out of the earth. As a result, mining companies have begun to search remote corners of the globe in pursuit of the alluring element.

Companies have shown a clear preference for exploring in the developing world, where gold still exists in profitable quantities and where operations have proven cheaper and regulations more lax. In these countries, companies build quarries and haul out tons of rock and ore in order to sift out the ounces of gold that make the endeavor worthwhile.

But the use of cyanide and mercury to extract the gold from the rock in which it is embedded has inspired protests by citizens over environmental and health concerns about the mining business.

In Africa, mines have come under fire for worker rights and human health violations.

Opposition to gold mining in the developing world has grown strong and Costa Rica is no exception.

A proposal by the Canadian company, Infinito Gold Ltd., to open up lands in Crucitas in northern Costa Rica to gold mining has stirred a passionate group of opponents into a fierce whirl.

On April 22, less than a week after a high court ruling gave the constitutional nod to allow the project to continue, thousands of protesters gathered to shout “No to mining!” in the streets of San José and in northern Costa Rica.

Opponents’ arguments against the mine are both legal and scientific. They draw on failed mining experiences from the past, such as the landslide at the Bellavista mine in the hills above the Pacific port city of Puntarenas, which led to major concerns over cyanide leaks and water contamination.

They cite questionable presidential tactics that allowed the project in Crucitas to advance.

But beneath the charges of environmental harm and the debatable legalities that the protesters hurl at the state, many opponents simply don’t see the justifications for Costa Rica’s poor to extract a mineral that the world’s rich demand. That Crucitas has been declared by the country’s government to be in the “public interest” doesn’t pan out.

“We don’t see how this can possibly be a priority,” said 24-year-old Cristina Mora at a recent rally. “Who needs this gold and why? We live fine without it. It’s not the development model we need or want in Costa Rica.”

But in spite of opponents’ doubts surrounding the need for the metal, the demand for gold has risen sharply and its price has soared in the past decade, reaching record highs.

Since 2000, gold prices have rocketed from less than $300 to around $1,200 per ounce. And the price showed little decline during the recent worldwide recession.

The demand comes largely from private investors and central banks around the world, who have flocked to the commodity in the past 10 years as a means to store value. While the days of gold-backed currency are over, governments are increasingly seeing the benefit of using gold as a hedge against economic crises.

“Gold is special,” said Pamela Aden, Costa Rica-based author of a monthly newsletter that forecasts metal prices. “It’s the currency of last resort in the world. During times of economic uncertainty, people run to it.”

In November of last year, India, the world’s leading gold consumer, purchased three tons of gold from the International Monetary Fund. China also helped boost the demand for gold when their central bank expressed more interest in buying gold to hold as reserves.

An ongoing campaign in East Asia that encourages citizens to buy gold has also led to a spike in demand for the metal. In 2007, China became the world’s second largest consumer of gold jewelry.

And lured by the Internet and an increase in the number of coin and bullion trading websites, private investors have found it quicker and easier to buy and sell the mineral online as they please.

“These are the reasons why the price of gold has been going up,” Aden said. “It’s a monetary instrument unlike any other.”

What does it mean for Costa Rica?

The price for gold is still on the rise and Aden predicts that it will continue to climb in the foreseeable future.

Gold’s record prices have led to a 21st century gold rush.

Having struggled to compete with the technology boom in the 1990s, mining companies see more reason than ever now to invest in gold exploration and restart operations that they began abandoning around 15 years ago.

They are looking in new places for deposits and requesting exploration and mining permits at rapid rates.

While gold exploration is expensive – Infinito Gold spent $34 million exploring for gold in northern Costa Rica – its potential rewards are too great to ignore.

“That’s capitalism,” said Bob Zwerneman, investor relations officer for the New Hampshire-based Jaguar Mining Inc. “There is profit to be made and there will be investors to help make it. As long as the price keeps going up, investors and mining companies will spend money to find the stuff and try to generate the most capital they can.”

While mining companies may bring jobs to locals – one of Infinito Gold’s arguments in favor of exploration in Crucitas – the real benefit for the host country comes through fees paid to the government.

In Brazil, where Jaguar Mining has been working, the company pays 34 percent of every dollar that it makes to the local, state or federal government through a stream of royalty, corporate and other state taxes.

“Gold mining is no different than any other operation,” Zwerneman said. “It’s a major source of revenue for the government, and that’s hard to ignore.”

The Costa Rican association of geologists estimates that there are 20 million ounces of gold buried under the nation’s territory. As of last Wednesday’s closing price, that equals more than $23 billion worth of the resource.

Much of the country’s gold is locked away in the Talamanca range, a remote and mountainous region in southern Costa Rica that is largely protected as indigenous territory and as part of the La Amistad International Park. The Spanish daily La Nación reported that during the past 40 years Costa Rica has received 20 requests to explore and mine this region for various metals, including gold.

The Legislative Assembly ultimately denied these requests.

Set to assume presidential powers on Saturday, Laura Chinchilla said in a press conference in April that she will “take all measures necessary that assure that (open-pit metal mining) disappears from our legal framework.”

She promised that she will sign a decree that places a moratorium on all pending metal exploration and extraction permits, and will submit mining law reforms to the assembly to prohibit future open-pit mining in Costa Rica.

But the pressures that Chinchilla and future governments will face are large.

The demand for the world’s most desirable metal has never been greater and its value has never been higher. A mineral that was once deemed the “barbaric relic,” will likely continue to tempt Costa Rica and its future governments.

“The pressure to mine for gold will continue all over the world, and Costa Rica is going to feel that pressure,” Aden said. “Mining companies will continue to see if they can do it. They will ask and see what they can get. It’s a good investment that has an open life ahead and as long as that’s the case, there will be interest in exploring anywhere gold can be found.”

A new ecological community, Rancho San Roque, is being developed in the foothills of the Rincon de la Vieja volcano in Costa Rica.  The developer has engaged the services of The Project Office (TPO) to manage the project; Deppat to create the master plan; and Zurcher Architects to create the architectural detail for a private residential community in harmony with nature.  Each of the 37 fully-titled lots available for purchase has at least 1.25-acres (5000M2) and incorporates sweeping views of the Guanacaste countryside, enjoying cool mountain air and rich volcanic soil.

Residents will enjoy the tranquility of country living with the convenience of modern services.  Located in Cañas Dulces – only 30 minutes from Liberia – where modern shopping, fine dining, and premium services are abundant.  The international airport in Liberia is just 40 minutes away, and some of Costa Rica’s best white-sand beaches and fishing are also an easy drive from the community.

Rancho San Roque is situated at a comfortable 1500 feet above sea level, offering fresh cool mountain breezes.  The area is host to a growing number of ecotourism facilities such as Buena Vista Adventure Center and Spa, which offers adventure sports such as canopy tours, rappelling, waterslides, horseback riding, hiking, thermal spa baths, and much more.  A high-end eco-resort, Borinquen Mountain Spa, showcases hot springs, a luxury hotel, restaurants, nature trails, and many more attractions within just minutes of the community.  The community is also located within minutes from the planned Guanacaste Country Club designed by Jack Nicklaus and being developed by a U.S. group that includes Frank Biden (Joe Biden’s brother).

“Most of the development in Guanacaste has happened at the beaches, but an increasing number of full-time expats find it to be too hot and too touristy,” said Dan Harris the CEO of The Project Office. “That is why we chose a tranquil country setting with a cooler climate for our community.  We’re in a laid-back rural area, yet still close to all modern services and amenities in Liberia.”

The city of Liberia is continually expanding with modern services.  Several banks, shopping centers and restaurants make up the town center along with the Home Depot-style hardware store called the Do It Center.  Large commercial developers are betting that Liberia becomes the business capital of northern Costa Rica, similar to the Central Valley, as evidenced by the million square-meter Solarium office industrial complex.  Furthermore, the best hospital in Central America, CIMA Hospital San Jose, has plans to build a new full-scale private hospital in Liberia.

Rancho San Roque will engage in a permaculture project to restore the pastureland, and will feature a community center with a pool and fitness center, walking trails through orchards, a greenhouse, organic gardens and aquaculture ponds.  The rich volcanic soil is perfect for gardening where the project aims to produce fresh organic vegetables, many fruit and nuts, fresh-water fish, chickens and eggs for the residents.

“Our goal is to restore the land with an edible forest and permaculture gardens producing healthy food security for residents” Harris added. “The intention of permaculture is not only to produce food, but also give immeasurable benefits to the environment while creating a beautiful and diverse landscape to enjoy.”

All environmental permitting is in place and all lots are ready to sell with clear title.  The developers are encouraging alternative energy such as wind and solar power, but are providing electric grid service in the community.  Satellite TV is readily available and high-speed Internet will be on site creating a fully connected community.

Each lot comes with a Costa Rica corporation allowing for clean transfers with low fees, and gives buyers a vehicle to obtain cell phones and other utilities.  The community is currently one of the best values in Costa Rica starting at $50,000 during the development phase. Financing is available with 40% down at 8% interest for 5 years ($20K down, $608/mth).

CONTACT US HERE FOR MORE INFORMATION

Real Estate Investment Consultant Jeff Hickcox

This is continued from Retirement Living In Atenas Costa Rica – Free video part I here.

Many clients ask us “If I retire to Costa Rica what is there to do for retirees?” Well, once you’ve gotten settled and exhausted all of the day-tripping to see the many wonders of Costa Rica, which are often repeated when your guests are in town, there are many activities and social gatherings to keep you busy.

In our town of Atenas, you’ll find just about any activity that would interest in your home country. Within a 30-minute drive there are golf courses, tennis courts, modern malls and movie theaters, beaches, volcano tours, hiking, biking, rappelling, world class fishing and so much more.

Also in Atenas, there are a variety of social groups like womens’ clubs, garden clubs, book clubs, poker clubs, and volunteer groups along with classes for painting, dancing, cooking and Spanish to name a few. All of these activities are in addition to the morning coffee shop chat, the weekly farmers market, expat dinner parties, the countless local fiestas, and other local events.

TO WATCH VIDEO AND READ ENTIRE ARTICLE, CLICK HERE

Retiring to a foreign country comes with many challenges. First, you must decide what type of lifestyle you desire in retirement.

Lifestyle choices like climate, cost of living, access to services (especially quality health care), quality of life, social opportunities, and distance from loved ones seem to be the most important to the average retiree.

Increasingly, it is becoming more difficult financially to retire in the United States. Although real estate prices have come down in popular retirement areas like Florida and Arizona, the cost of taxes, health insurance, food, and other necessities have skyrocketed making it very difficult for North Americans to retire comfortably in the States.

TO WATCH FREE VIDEO AND READ ENTIRE ARTICLE, CLICK HERE