Real estate business

How SUGEF is making real estate in Costa Rica evolve:

As of this year, the government of Costa Rica has extended the authority of SUGEF to include oversight of real estate agencies. This article will examine how this new requirement affects the real estate industry in Costa Rica.

What is SUGEF?

“SUGEF” stands for “Superintendencia General de Entidades Financieras” (Superintendence of Financial Institutions). This organization audits financial institutions such as banks, savings and credit unions, and employee credit unions, to ensure that they comply with federal and international financial regulations. SUGEF is like the Office of the Comptroller of Currency (OCC) in the United States.

According to the SUGEF website, their mission is to “dictate the general standards and guidelines that it deems necessary to promote the stability, solvency and transparency of the operations of the audited entities”. There is no doubt that the real reason behind these new requirements is to prevent money laundering and to protect buyers from fraud.

This new arrangement has resulted in several changes in the way real estate companies operate and report transactions to the Costa Rican government.

The SUGEF registration process

Approval by SUGEF requires real estate agencies to provide detailed financial and property information. Here is an example of some of the things they need:

  • Who owns the business?
  • Is the owning entity local or foreign?
  • A complete history of transactions since early 2019.
  • A list of vendors providing services to the agency (such as lawyers, accountants, banks).
  • The number of employees who earn enough wages to be affiliated with the local social security system.
  • Associated bank accounts

SUGEF registration is an online process and a digital signature (Spanish: firma digital) is a requirement. You can get digital signatures at most major banking institutions in Costa Rica. It is important to note that digital signatures are only available to Costa Rican citizens or legal foreign residents.

Effects of the new SUGEF regulation on real estate companies

There is no doubt that these new regulations will increase overhead costs for all real estate agencies. More paperwork means more time, more time means more money and / or higher legal or accounting fees.

Large real estate companies should be able to absorb these costs without significantly increasing their overheads. Most large agencies have multilingual administrative staff trained to handle this paperwork, reducing the need to use external legal or accounting services. They can also spread the costs over several monthly transactions.

Small agencies will have a harder time complying with the new regulations for several reasons. First, many agents in Costa Rica are foreigners who do not speak Spanish fluently. They may have to hire external service agencies (lawyers, accountants) to handle the documentation. Even with training, the language barrier can hamper the ability to perform basic tasks that are not a problem in places where the native language is English. Second, some agents are not legal residents of Costa Rica and therefore cannot obtain a digital signature required for the completion of the SUGEF registration. As a foreigner, the law allows them to own a company, but only a person with a digital signature can register said company with SUGEF. There are ways around this (like giving a resident or citizen a power of attorney to obtain the digital signature), but there are risks in giving such authority to someone who is not the legal owner of the company.

Without a doubt, the new regulations will cause a sifting within the real estate industry. Most foreigners who sold real estate “next door” are likely to disappear altogether. Most full-time agents I’ve spoken to see this as a good thing, as these “pseudo” agents rarely provide post-purchase assistance to the buyer, and they’re not as knowledgeable about the potential pitfalls associated with buying property in Costa Rica. . Some full-time freelance agents may have to go out of business or join larger agencies. Small real estate agencies can merge with other small agencies to share overhead costs. Hard to say at this point – the reshuffle is still in progress.

Effects of the new SUGEF regulation on the buyer

First, transparency is the law. SUGEF requires real estate ownership details and confirmation of sources of funds to approve any transaction. They will also require details of the owners of any company used in the purchase of a property.

Second, buyers can have a higher level of trust in their agents. Before SUGEF surveillance went into effect, anyone with a laptop and a website could promote and sell properties from anywhere with Wi-Fi. This made Costa Rica fertile ground for shady real estate dealers. From now on, only real estate agencies registered with SUGEF are authorized to process real estate transactions in Costa Rica. This is a big step forward in security for buyers and sellers. The first step in your due diligence process should be to confirm that your agent is registered with SUGEF. If you are unsure of how to proceed, ask your local lawyer for help.

Third, closing costs unrelated to the real estate agent may increase. For example, some law firms may increase fees to cover additional overhead costs associated with SUGEF compliance. I guess it won’t be a lot, but it’s worth asking the law firm you choose if the SUGEF requirements add a lot or a little to the closing costs.

Based on my discussions with several well established real estate agents in the country, and in my opinion, the new oversight from SUGEF is a great thing for the industry. Yes, it does slightly increase the cost and the registration process was laborious, but it also legitimizes the real agents and weeds out most of the scammers who have taken advantage of naive homebuyers in the past. The customer is well served by these new requirements, and that is what matters.


Originally from New York, Joseph Emanuelli has been a permanent resident of Costa Rica for over 12 years and a registered SUGEF broker with RE / MAX Tres Amigos in Playa Hermosa. You can reach Joseph by visiting his website, Costarican American Connection, or calling him at 506-8358-6617 (cell) or 506-2672-4100 (office), or toll free from the United States and Canada 1- 877-661-6074.

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