5 Tips for Banking In Costa Rica

If, like me, you came from a country where there are a huge number of banks, and the options seem limitless... adjusting to life in Costa Rica can be tough.

Of all of the challenges we have faced since we arrived- baggage and dog in hand 6 years ago- banking has been the most complicated.

This post is my way of giving you some ideas of what to expect. However, I am not a banker, or a financial advisor and banking rules do change periodically. Also, this post is based on my own understanding of the system and experiences as an Expat. SO, be sure to do your own research!

Having said that, here are my Top 5 Tips for banking in Costa Rica:

1. Do not expect to be able to do things the way you did in your home country! Every country has it own laws and regulations with regard to banking. Costa Rica is a Central American country located between some of the most prolific drug-producing countries in the world. The government takes great pains to ensure that both the drugs themselves and the profits from the drugs cannot be moved easily through the country. That means restrictions and oversight. That's just the way it is. If you are hoping to move your money someplace safe and hidden for tax purposes- this may not be the idea place to do it.
2. Residency makes a huge difference! The government is not trying to target non-residents because they don't want immigration. They are assuming that people in the drug trade are transient and therefore non-residents. Once you become a resident (and in some cases, as soon as you start the residency process) some of the restrictions will no longer apply and you will have access to a wider number of account types and services. Of course this will still vary from bank to bank. If you need help deciding whether or not to seek residency, I highly recommend you speak to Oscar Lopez.
3. Spanish is a must when setting up your bank account! We know this because we did NOT have enough Spanish to deal with all the banking terms and so the process was very long and very painful. In the end we had to enlist the aid of a bilingual friend. Even so, we did not end up with the kind of dual currency account that we wanted- because we didn't know enough to ask the right questions. Save yourself a lot of frustration. Hire a translator for the day, or bring your bilingual friend. You don't need to give them access to sensitive information, you just need them to translate back and forth so the process goes smoothly and nothing is missed.
4. Non-Residents CAN get accounts that by-pass the $1000/month limit if you do it right! This is one I wish we had known years ago! The secret is to get a referral letter from a known and trusted source. This is like finding a guarantor for your passport application- so think lawyer/doctor/accountant. Take the referral (or introduction) letter to the bank with you when you open your account. If you read the last sentence and panicked, just know- the general rule is that non-residents are very limited on what type of bank account they can open, and that account will be limited to a deposit amount of $1000 a month. Obviously that is NOT ideal, and they need to up the amount for inflation- but there it is...
5. The only currencies accepted in most places are the US Dollar and the local Costa Rican Colone. If you are Canadian, like we are, you will need to factor in the extra exchange rate (from Canadian to US and then from US to Colones) any time you make a purchased based on a US dollar amount. So choose your currency wisely. Here is a for instance... if we go to a restaurant, and the bill comes in Colones, but we only have US dollars in our wallet- we will be facing the double exchange because we paid the exchange from Canadian to US when we withdrew the money from our Canadian account. Then the restaurant will typically do an exchange from the US to Colones which is based on whatever rate is easiest to calculate in their heads. (You will only get the current bank rate at the bank). So- what's the best solution? In this situation we have learned to pay with our credit card and ask that the charge be made for the colones amount. The credit card company will then charge an exchange rate from Canadian dollar to colones, saving us one exchange. Any time you are given a bill... try to pay with the currency on the bill, so you aren't charged an exchange!

Obviously, learning the ins and outs of banking here is a process. The system quite often just doesn't make sense to us, but the bottom line is that to function here successfully, you have to work with what you've got.

A few other points to remember:

1. Financing for non-residents is complicated, and often very expensive. Thanks to the real estate boom, more options are becoming available in the form of private financing companies like VOLO Loans, a company that our clients have used successfully in the past. (https://vololoans.com/) Even so, the best advice we can usually give is to find a way to do your financing in your home country and pay cash for your large purchases to save on the high interest rates... a line of credit can be your best friend!
2. If you bring in more than $10,000 at a time it must be reported. Don't try to get around this rule... they will just confiscate your money. This rule goes back to the people moving drug money- it's not meant to stop you from bringing in money to buy your car- or your house, and there aren't going to charge you for bringing it in. They simply want to know the purpose of the transfer and the source of the cash, so they know that its a legal source. 
3. Some Preconstruction Developers have a payment plan which allows buyers to pay in installments over the course of the build. This is another way to organize your home purchase so that it is easier to manage in cash.
4. The best way to move money in and out is usually an international bank transfer. They will take a few days to complete, so plan ahead. The most popular money movers seem to be Wise, Western Union, and WorldRemit. Here is a post from Forbes that helps explain your options. https://www.forbes.com/advisor/money-transfer/best-ways-to-send-money/

I think that's enough about banking for today. I know it's not MY favourite topic! I hope that this post has helped answer a few of your questions.

Until next time,

Pura Vida