Introduction
Richard Bexon: Good afternoon, Cristina. How are you doing?
Cristina Guerrini: I’m great. Thank you. How are you?
Richard Bexon: Good. I think it’s you and David Carr who are competing for the most podcasts, but we always like to get you on and get an idea of kind of what’s going on, especially as the ever world of residency and now this perpetual tourism, and I think now vacation rentals, you know, things are starting to get a little bit more or they’re threatening to get a little bit more organised, should I say, because of course, Costa Rica talks a lot, but half the time doesn’t do what it, you know, it talks about. But, but yeah, but I think we’ve seen a lot of volatility recently. And again, I mean, I’ve been talking about that in the last podcast, I think there’s probably here to stay, to be honest with you, I can’t see it changing, you know, tourism numbers, you know, down January, down February, I’m sure that we’ll continue to see that, you know, as kind of a normality returns here as well.
And again, I say down, but it’s been a crazy post pandemic, like we like we’re getting to a new normal. So, you know, I think anyone was expecting this to continue is absolutely nuts. But it’s settling down, you know, we’d estimate that we think anywhere from like a 5 to 8%, you know, kind of reduction this year.
But I mean, what are you seeing on your side? And directly? How is it impacting your workload?
Market Trends in Legal Services
Cristina Guerrini: Okay, so we’re still pretty busy, I will say, and I’m very happy and proud about that. I did notice that the market is going back to a pre pandemic situation. So I think we’re probably stable because we are growing.
And so when when the big hit post pandemic was taking place, we were a new company. So we had to get new clientele. Now we’re stable.
But I think it’s because we are growing, even though the market is slowing down a bit. Yeah. And I agree with you, it makes sense.
We are, it’s, it should not be a surprise that the boom post COVID will not last forever.
Richard Bexon: Well, I mean, you’re in Nosada, you know, and I’m sure that you’ve seen a bit of a slowdown there. I mean, just looking at data from vacation rentals, it’s one of the areas that’s been hardest hit in occupancy numbers, you know, and we’re actually just finishing a build here for a client at the moment, you know, estimating what their income is going to be and be like, look, guys, we’re going to have to kind of throttle the dampen this down a little bit. And we’re based on, you know, it’s still good.
Don’t get me wrong. I mean, you know, of course, but it’s not as good as it was.
Nosara Market Conditions
Cristina Guerrini: Of course. Yeah, I think it was a nice parenthesis. And everyone is again, going back to normal, legal fees are also going down, which is sometimes tough when you have like, like has quotation in, in dollars, and you make money in dollars.
And with the exchange rate that we have now, that means that it’s a big piece of the cake that we are letting go. But that’s fine. That’s fair enough.
You know, as long as you do a good job, and you have a fair and stable reputation, because we can still a very good country to do business in.
Richard Bexon: I think it’s returning to a fair market value demand and supply, which is correct. You know, it might just take some people a little longer to understand the demand and supply, you know, access, but we shall see. But I think one of the most recent things that’s been pushed through that we’ve been having a lot of noise about is this perpetual tourist visas, you know, this bill to be passed.
And again, you know, Costa Rica talks a lot of time about a lot of stuff, but really, then actually passing it and implementing it are two very different things, you know? I mean, what’s really happening? What’s the new motion?
And what’s the likelihood it’s really going to get passed?
Proposed Perpetual Tourism Legislation
Cristina Guerrini: Okay, so the new motion has been presented by Priscilla Vindas, a congresswoman, and it is entirely about perpetual tourism. So this, it’s a bill of law, first of all, let’s make it clear, it’s a bill of law, it’s a project, it may pass, eventually, it may never pass, it may pass with amendments, we don’t know. At the moment, it’s just a proposal.
That’s what it is. Okay.
Richard Bexon: So it hasn’t even gone through the first debate yet?
Cristina Guerrini: No, of course not.
Richard Bexon: Okay.
Cristina Guerrini: And as you know, there are two debates, and there could be the veto, there are many factors to consider. And Costa Rica is not the fastest country in the world.
Richard Bexon: And the change of government in a year.
Cristina Guerrini: The change of government. Yeah.
Richard Bexon: Yeah.
Cristina Guerrini: But let’s see what the proposal is. Okay, what they are proposing is to triple the sanctions for tourists who overstay their visa. So they’re saying that if you overstay the fine, the economic fine will no longer be $100, it will be $300 per month, you stayed past your tourist visa.
And they’re saying that you can still be banned to come back to the country for three times the time you overstayed.
Richard Bexon: Okay.
Cristina Guerrini: And as a general rule, applying automatically to anyone, if you’re a tourist, you come here and you’re granted a tourist visa, you have to leave the country for at least 90 days before being able to renew it. There is a 90 day entry ban. Proposed.
Okay, again, it’s a proposal. So they’re proposing, if I come here on vacation, I guess six months, or I get one month, whatever I get, I leave, I cannot decide, oh, it was amazing. I want to go back in one month.
No, you have to be away for at least 90 days. That’s the proposal.
Richard Bexon: I can already tell you that’s never going to pass, Christina. I mean, it sounds like someone’s grabbing headlines. You know, it’s going to pass first debate, no one, her party doesn’t have a majority.
Like, yeah, it’s, I feel like it’s headline grabbing.
Cristina Guerrini: And I think both of you have, you know, waited to have this podcast because we didn’t want to give more importance to the appeal. But I think it’s just necessary. You know, we have to discuss this.
But I don’t see it. It’s been approved.
Election Year Politics
Richard Bexon: It’s an election year. Let’s not get wrong. This year is an election year.
So you’re going to see a lot of stuff thrown around and people are going to see what sticks on the walls. gentrification, taxes, vacation rentals, perpetual tourists, you know, taxes, social security, like they’re going to try everything and just see what sticks with people.
Cristina Guerrini: Exactly. And don’t get me wrong. It’s not that I don’t think that we should do something about perpetual tourists.
I do think that the government should find a solution to motivate to ensure that the foreigners invest and follow the rules in Costa Rica so that there is a fair competition with locals. But I do not think the proposal is the solution. This proposal is not the solution, in my humble opinion.
Richard Bexon: Look, I agree. I think if you’re going to be like, hey, I’m out here for a couple of months, a year, two, three months, I might there should be some form of insurance that the country issues for you to buy for social security. Because if you get into an accident, you’re not going to a private hospital, you’re going to a public hospital and using those resources like that’s happening, if you know what I mean.
But also is, you know, and this kind of comes back to taxes of like 0.25% property taxes is just too little in some areas, if that makes sense. You know, and that’s money the municipality gets. And really, they can’t do with that.
Like, they need to relook at that. But you know, and then they come back to gentrification, etc. But if someone’s worried about this, what are their options?
I mean, you know, can they come into the country? Can they come in the country have a flight that leaves after six months to make sure they do get six months, but sometimes you come in, you get 90 days, we get 30 days, or sometimes you get six months. But if you come in with no, I’m here for six months and have a flight out, are they ever going to go?
No, no, you can only stay for 30 days.
Tourist Visa Entry Practicalities
Cristina Guerrini: They could. It is always left at the discretion of the official the time that they give you. Of course, if you have an exit ticket, which may be a flight or a bus ticket, after 180 days, it’s more likely that you will get the most, you know, the longest visa.
If you come here with a plane ticket after 10 days, then it’s more likely that you will get just 10 days, you know. But there’s there are no guarantees at the moment, it’s always at the discretion of the official. One thing to say is that if you get less than 180 days, you may get immigration and request an extension so that you get the full 180 days.
I do have noticed that they are not giving 180 days to anyone. So I was contacted by a few people that were like, oh, why didn’t I get the 180 days?
Richard Bexon: I just had a couple of friends come through, they’ve got 180 days. I mean, maybe Liberia is clamping down on it more than San Jose. I have no idea where these clients are coming through.
But yeah, it’s but yeah, but I mean, I think it’s at the border.
Cristina Guerrini: It’s the border that they’re probably trying to prevent perpetual tourists with the tools they have, with what tools they have. What can they do? Give you less time to, you know, discourage you from being a perpetual tourist.
Richard Bexon: Yeah. Well, I mean, look, the other option here is, I mean, if you’re spending six to nine months a year here in Costa Rica, don’t become a perpetual tourist. I mean, get residency.
It makes life a hell of a lot easier. And, you know, join the community. Otherwise, again, this gentrification rift is just going to get wider and wider.
Healthcare for Tourists
Cristina Guerrini: You know, exactly. And let’s remember that if you’re here on a tourist visa and you don’t have an insurance as a tourist and something happens to you, because Costa Rica is an amazing country, you will be treated, but you will have to pay.
Richard Bexon: Correct.
Cristina Guerrini: Public health care is not cheap.
Richard Bexon: No, it’s not.
Cristina Guerrini: So I was contacted by a foreigner to remember like, oh, my brother is in a very serious situation and now they want me to pay. I’m like, well, unfortunately, if your brother doesn’t have an insurance, a travel insurance is enough, but at least have that. You don’t have anything.
And if you’re living here, you may want to pay the car. You may want to contribute with the country, not just because it helps you, but it’s the country that has given you the opportunity to have an amazing life. So you want to give back to this country and make it right.
Vacation Rental Regulation
Richard Bexon: Well, let’s change gears a little bit and talk about Airbnb, you know, patentes, ICT regulation, because, you know, this goes round every couple of years, Cristina. I mean, my friends are pushing for this, you know, they’re hotel owners, they’re pushing for more regulation of vacation rentals, which I completely agree. Like if you have staff, you should be paying Caja, you should be paying taxes, you should be registered, etc., etc. But, you know, I mean, even we were talking to some engineers in the municipality of Santa Cruz the other day, and they were like, look, no, Tributación Hacienda is breathing down our throat at the moment, about collecting taxes on some of these vacation rentals there. But like, what is the reality of the situation? Because again, there is what should be done, and then there is what actually gets done.
Cristina Guerrini: So what should be done are, you know, you need to comply with more different requirements. You have an Airbnb, you have to pay taxes in Costa Rica, that’s for sure, you know. And that’s also important, you know, we’ve seen lower tourists and more tourists that are using Airbnb.
So if the government is not collecting those taxes, they are losing a big piece of the cake of the tourist income. Okay, so that’s fair. So you need to pay taxes, meaning you have to register as a taxpayer, and you have monthly and annual obligation.
Monthly, you have to declare and pay the value of the tax, and you have to declare the income rent from real estate activity. Those are two monthly declarations and two monthly payments that must be done. And every year, of course, you have to submit the income tax declaration, tax returns that are due in the middle of March, we just declare them.
So this is from the tax perspective. Additionally, there is a requirement to register before the ECT, the Costa Rican Tourism Institute. That’s something very easy, you have to complete information, you put the link to the Airbnb website where you’re promoting your property, and that’s done.
That’s also very important, because I do think that the Costa Rican Tourism Institute is an amazing institution that can provide very important data. You just had someone recently in your podcast, and it was one of my favourite episodes, and very useful. So that’s something that needs to be done.
Nicoya Municipal Business Licenses
And another thing that is more new and less people know is the municipal licence, municipal patente. And that is being implemented right now. Now, will that be implemented?
I don’t know. Is it possible? Totally.
Is it likely? I would say yes, at least for example, in Nicoya, you may have heard that a few weeks ago, or if not less, the tax administration and the municipality of Nicoya joined forces, and the tax administration gave to the municipality the email address of every taxpayer registered with an address in Nicoya, and they send them an email saying you need a patente. So the municipality of Nicoya people are being told if there’s a taxpayer, they must have a patente.
Richard Bexon: The business licence.
Cristina Guerrini: The business licence, exactly. The business licence. So in Nicoya, they have what is called patente no domiciliada.
It has different names in different municipalities, as always, you know. But yeah, they want property owners or vacation rentals to get this licence. It’s kind of easy, I will say.
So they’re being fair in terms of requirements. But yeah, it’s important that people start making sure that they have all the permits, which is why at Blue Zone Legal, we have created a packet for vacation rentals. If you are not up to date yet, we can get you registered as a taxpayer.
We have an accountant that can submit a declaration. We can get the ECT registration, the Conservatory of we can get everything for the client. And we are promoting this.
This is something that needs to be done.
ICT Registration Requirements
Richard Bexon: It’s funny you say this. Because again, you know, I’m in the midst of setting up a property management company throughout Costa Rica at the moment throughout for our projects that we’re working on. I needed insurance.
In order to get insurance from INS, they required me to be ICT registered. Okay. But MAPFRE did not.
So I went with MAPFRE. And so they did not require me to ICT registration, if that makes sense. So it’s closing, that’s for sure.
But like, joining the ICT is great. But like, you’re not gonna get any benefit from it. I’m gonna be honest with you, Cristina.
The ICT government organisation that, you know, brands Costa Rica and markets Costa Rica. And that’s it. You know, I mean, if you need help, they’re probably not going to help you that much.
You know, you can get data online. But like, it’s just I think, again, it’s a good thing to do anyway.
Cristina Guerrini: You know, and it’s, you know, pretty cheap, I will say, at least we are charging, I can see a very fair fees. Yep. You just wait and there you go.
You know, why wouldn’t you? Yeah, they may not help you. But why would you not do that?
Trademark Protection in Costa Rica
Richard Bexon: If that’s the requirement, you know, and you’re, it’s funny, we’re doing this podcast, because I’m going through this at the moment, you know, I mean, I’m just about here to talk about trademarks of business names and stuff, you know, I mean, I’m trade, I’ve trademarked my business names, and also my property names as well, if that makes sense.
Cristina Guerrini: Yeah.
Richard Bexon: Because they’re pretty unique brands. So I’ve done that, you know, I’ve gone through that process. But like, what should people understand about like, I think your, I think your rights here are very different than they are in the US or anywhere else in the world when it comes to trademarks.
Like, you know, if you trademark a brand, and someone had it before, like, who owns that trademark?
Cristina Guerrini: Exactly. So I think a trademark is a topic that is not addressed, as it should, you know, people think in Costa Rica, they set up a corporation with the name that they have registered it, and they are protected. False.
The only way for you to protect your commercial name is to register as an intellectual property. Okay. And that’s the way to do.
And it’s also very important to remember that the intellectual property law is based on the territoriality principle. So if you had it, if you have a register in the US, because you’re a multinational, and you want to use it in Costa Rica, you have to register it in Costa Rica, you’re not protected by the US registration, you need to do the same process here. And the good news is that it’s kind of easy to do.
Richard Bexon: It’s a very easy process.
Cristina Guerrini: Super easy. You may even do that without an attorney, honestly.
Richard Bexon: Well, I’m lazy. I’m lazy. So I would definitely do it with an attorney just, you know, to make sure it gets done properly.
But I just trademarked, you know, I trademarked my business name. Also, all of these villas names, you know.
Cristina Guerrini: Good. That is, I think there are many benefits of registering a trade name.
Richard Bexon: Yep.
Cristina Guerrini: I can give you my example. I had a former business. And look at me, I did not trademark it.
I did not register the trademark. And then when I, when I decided to split with my former business partner, then what we do, I’m like, I will just let it go. I will not fight over that.
I have a new name. And I’m so happy that I did register the Blue Zone legal trademark, the name, the logos, everything. Because here I am, I’ve been, I have had people try to prevent me from using it or try to steal it from me, but I’m protected.
What does it mean I’m protected? Having registered it means that they have the exclusive right to use the trademark. So everyone, you want to have your name, you want to have it protected.
You don’t want to be confused with someone else. You go, you register a trade name, and then you can get protection. It’s pretty easy.
Richard Bexon: Well, let’s say, Christina, you like, I don’t know, Blue Zone legal, okay. Or via Blue Zone, let’s say.
Cristina Guerrini: Yeah.
Richard Bexon: And someone comes along or someone’s had that name for a while, but they never registered the trademark or someone comes along and takes the same villa name as you. I mean, apart from sending them a decease and desist letter, like if they don’t follow, I mean, you have to go through the courts, which, you know, is never a quick process here.
Cristina Guerrini: Yeah, well, first of all, before you trademark and you submit the trademark registration and you carry a brand and a business, you should do your homework. You should see if someone else has been using the name, what’s going on, just to prevent what you just described. But it’s important to know that once you, if you are the first, if they have been using your name, but they never registered, they are not protected.
Richard Bexon: Yeah.
Cristina Guerrini: So the first one that registers the trademark is going to be the winning one.
Richard Bexon: Yeah.
Cristina Guerrini: Of course, the other person can oppose, can submit in a position and you will fight. But if you’re the first one and you demonstrate you have to use it, it’s not as strict as it is in the US to the rule about using, but it still is. I mean, I was able to protect my trademark without issues.
Richard Bexon: It’s a pretty quick and easy process as well. It really is.
Cristina Guerrini: Absolutely. And it also, I mean, reputation for me is very important. Credibility.
If you have a business and then the person is like, oh, they don’t even have the trademark registered. You know, you want to be a professional. You want to do things right.
You have all the permits registered. And then it also gives value to your business. Let’s say that you create now this business, now a property management, and you want to sell it in a few years.
If you never register the trademark, if you don’t have your accounting books and financial statements, then the value may be equal to zero, even though you made income. If you cannot certify and document everything. I have clients, not clients, but people reach out to me and like, oh, I have this Airbnb business and rentals.
It’s very profitable. We made a lot of money. It’s an inactive corporation.
And all the money was abroad. I’m like, in Costa Rica, that’s zero.
Richard Bexon: Correct. You’re selling real estate.
Cristina Guerrini: You’re selling real estate. You’re not selling a business.
Richard Bexon: Correct. Yeah. Well, I mean, Cristina, I mean, we’ve touched on quite a few things here.
And again, I think that the Costa Rica is starting to get, I would say, a little bit more serious, if you know what I mean. But again, you know, every so often, you know, these conversations kind of come around, etc. But we’ll see.
And again, I think we’re going to see a lot of it this year, just because it is an election year, you know, next year, next month, we have a new president, or, you know, at least the first round anyway, because we probably won’t get onto the second round as always. I always say here, like, it’s like chicken bones trying to figure out who’s going to be the next president. Because, like, I asked someone the other day, who is actually one of the presidential candidates, he was like, Rich, I have no idea.
But like, there’s no frontrunner. You know, so. But my last question for you, Cristina, as I’ve kept you long enough, if you inherited $500,000, and you had to invest in a new business or real estate in Costa Rica, what would you invest it in?
And why?
How Would You Invest $500,000 Inheritance in Costa Rica?
Cristina Guerrini: Vacation rentals.
Richard Bexon: You’d still do vacation rentals, even though that they’re kind of… I mean, what would you do, though? I mean, now, like…
Cristina Guerrini: I will just do it right. Buy a property, get the municipal permits, register with the estate, do everything, have the accountings in order, submit, and everything is still profitable. It can still be profitable, even if you do it the right way.
Richard Bexon: If you register, it’s just like having a rental income, you pay like 12.75% tax flat, you don’t have to deduct, just pay the 12.75%, you don’t have to even dictate your expenses, you just pay that on the income, that’s it. And you’re done.
Cristina Guerrini: Exactly.
Richard Bexon: They’ll never audit you, because all you do is go, here’s my income, I pay this tax on it under this regime, done.
Cristina Guerrini: Exactly.
Richard Bexon: I had the conversation the other day with a very large property management company, he was like, Rich, I don’t even bother with the income and expenses. It’s just so much easier. I’ve got the tax authority here just would create stuff for me, not accept certain invoices and so I just went, you know what, it’s easier for me to just pay the 12.75%. They come along, I say, here’s my income, here’s the 12.75%. I paid, like, that’s it. And then they just leave me alone.
Cristina Guerrini: Exactly. And there you go.
Richard Bexon: Yeah. But what would you build? And where would you build it?
It’s the question, Christina, because everyone’s answers like vacation rental, but like where and what?
Samara-Nosara Investment Location
Cristina Guerrini: Oh, wow. I don’t know if I want to answer this. Because then I will probably not say Nozada because of the situation at the moment, and then people may not like my answer.
I will be honest, I will probably build close to where we live, which is in between Samara and Nozada. Yep. And it’s a developing area.
They’re finished to pave the roads. Thank you. Thank you, Costa Rican government.
Thank you.
Richard Bexon: It took a long time.
Cristina Guerrini: And I will do small apartments. First of all, with 500K, your options are limited. But I will build like maybe two bedrooms, two, three bedrooms, if I can.
Keep it simple. And let it function. The smaller the rentals, the higher is the likelihood of building it with people.
Richard Bexon: Awesome. Well, Christina, it’s been an absolute pleasure having you on the podcast as always. If anyone wants to get into contact with you, I’ll put all of your contact details there down in the description.
I know your company, Bluezone, offers a wide variety of different services. So if anyone wants to talk to you, they can. But very much appreciate you taking the time to share your knowledge with us on the podcast.
Cristina Guerrini: Thank you. That was my pleasure. Thank you, Richard.
Richard Bexon: No worries. Bye.
Cristina Guerrini: Bye.
