Home / Uncategorized  / Escrow  / Outlier Legal launches OLS Escrow in Costa Rica

Outlier Legal launches OLS Escrow in Costa Rica

After hundreds of closings and thousands of hours spent at banks on our clients' behalf, we heard you. Moving large sums of money to Costa Rica for investment or purchase was laborious and exhausting for

Outlier Legal launches OLS Escrow in Costa Rica

After hundreds of closings and thousands of hours spent at banks on our clients’ behalf, we heard you. Moving large sums of money to Costa Rica for investment or purchase was laborious and exhausting for all parties involved. In response to client demand, Outlier Legal quietly began offering an Escrow service at the beginning of 2022. Almost a year later, we are proud to say we have helped ease the stress for those Outliers who have chosen to invest in Costa Rica as their first or second home.

You should know that Escrow accounts are subject to their own Know-Your-Customer (KYC) requirements and compliance falls under a Costa Rican government entity -SUGEF- that might be new to you. Below, please find our explanation for the main reasons to use an Escrow account in Costa Rica, and the sort of steps a company has to take to become custodians of your funds, like OLS Escrow has.

The service for custody of funds while awaiting the completion of a transaction (best known simply as Escrow) was established in Latin America during the last decade. In part due to the great demand of foreign buyers wanting to invest abroad in general,  and in  particular, their interest in investing through the purchase of business and property.

What does an Escrow account do?

The ultimate intent of an escrow account is to get legally begotten funds from point A to B for different purposes. If you’re buying a house, a vehicle, opening a business or embarking on any other investment that requires a direct, large capital injection that is difficult to move abroad, you should absolutely use an escrow.

An Escrow company serves as an impartial third party that guarantees the parties involved the custody of funds by following all the requirements of compliance with the law, while all the contractual and administrative aspects of the transaction are completed before payment to the parties is released. Basically, it provides financial peace of mind when investing large amounts of money abroad.

What are the benefits of using an Escrow?

Due to the fight against money laundering and terrorist financing, international regulations have become very strict regarding the handling of funds. Amounts over $10,000 USD are regularly frozen in bank-to-bank operations. If you are working with countries with internal banking restrictions due to the various global crises as of the date of this writing, amounts under $2,000 USD may be flagged and accounts frozen. (Looking at you: Ukraine, Russia and Lebanon) In short, handling large amounts of money has become a headache for anyone wishing to send or receive money around the world.

Regarding Compliance

Escrow services in Costa Rica must be registered with SUGEF (Superintendencia General de Entidades Financieras) or Banking Commission for the execution of its operations and comply with a series of legal requirements in order to mitigate the risk of money laundering and terrorist financing.

List of benefits:

  • No need to comply with banking requirements. The Escrow service will be in charge of covering and answering all the requirements and documents requested by the local bank according to the information provided by the client.

  • Opening a bank account is not a requirement. For those of you following Outlier Legal’s blog for a while, you are familiar with how difficult this is for a foreigner in Costa Rica.

  • An Escrow account provides security to the Buyer and Seller of a given transaction that the funds are available, just waiting for the completion of the said transaction.

  • Compliance with banking and financial regulations. Using an escrow provides a guarantee that the transfer of funds is compliant with the corresponding regulations.

  • Security. It provides security that the funds are available when needed.

  • The backup of personal information guarantees confidentiality and restricted access, following the highest levels of digital security.

Outlier Legal launches OLS Escrow in Costa Rica

How long does the service take and what does it cost?

The duration of the service will be determined by different factors, which includes:

  • Complete the required information supporting the origin of funds.

  • Review and approval of supporting documentation.

  • How long your local bank takes to send the funds to the escrow account.

  • Receipt, analysis and approval of the supporting information (KYC) by the receiving bank.

The Length of the Escrow process can take about a week in case of compliance of all the information on time. In case of any delays, the process can take a few more days.

The cost of the Escrow service is based on the value of the transaction, but it starts a base of $600 USD. This will likely increase depending on the amount that needs to be in custody, which is more affordable than dealing with opening a bank account and, the legal and accounting fees, that can exceed a few thousand dollars. Not to mention what happens if your funds are frozen.

Outlier Legal is proud to have launched an Escrow service through OLS ESCROW, which of course complies with all legal and SUGEF registration requirements for the administration and custody of our clients’ funds. We have highly trained personnel with attention to detail to understand the needs of our clients.

You can use our services for:

  • One-time transactions

  • Independent management of escrow accounts

  • Trust structure and administration

  • Guarantee

  • Testament

  • Administration

  • Properties

  • Investments

  • Custody of shares or other assets

As always, Outlier Legal is here to help you achieve your dreams. For more information on OLS Escrow please call our offices today.

Share

lchacon@outlierlegal.com

He serves as the Compliance Officer at Outlier Legal. Luis Ángel Chacón has a Law degree with two majors: notarial and registry, and regulatory compliance. He has 6 years of experience at compliance and financial legal firms. He describes himself as an empathetic and committed professional.

Review overview
2 COMMENTS
  • Marlene Paul November 7, 2022

    Excellent information!!

    • Rafael Valverde December 5, 2022

      Marlene,

      Thank you for your comments and support.

POST A COMMENT