By: Manuel Porras – GLC Abogados

Investing in the Costa Rican coastline remains a top priority for both national and foreign investors. However, the Maritime Zone Law (Law No. 6043) establishes a unique regulatory framework that requires sophisticated legal counsel to ensure the legal security of your capital.

1. The Property Regime on the Coast

Unlike properties with a traditional Folio Real (fully titled private property), the Maritime Zone (ZMT) consists of the first 200 meters of land measured from the high-tide line. This strip is divided into:

• Public Zone (50 meters): Inalienable and public; it is intended for public use and cannot be subject to private ownership or concessions.
• Restricted Zone (150 meters): This is where concessions are granted. These are rights of use and enjoyment granted for a specific term (usually 20 years) by the local Municipality and ratified by the Costa Rican Tourism Board (ICT).

2. Limitations for Foreigners and Restrictive Municipal Criteria

Article 47 of Law 6043 prohibits granting concessions to foreign individuals who have not held official residency in the country for at least five years. However, the application of this rule has evolved into complex administrative interpretations that every investor must understand.

The Case for Legal Entities: The law states that concession-holding companies must have at least 50% of their capital stock held by Costaricans.

A Warning on Local Interpretations: It is vital to note that certain Municipalities, such as the Canton of Parrita, maintain an extremely restrictive interpretation of Article 47. Under this criterion, these municipalities mandate that 50% of the capital stock must obligatory belong to Costa Rican citizens by birth or naturalization. This effectively prevents foreigners with more than 5 years of residency from directly owning more than 50% of the shares in a concessionholding company.

This discrepancy between the literal law and local administrative practice makes prior legal structuring indispensable to avoid the nullity of the concession or the rejection of renewals.

3. Transparency and Beneficial Ownership (RTBF)

In the past, the verification of capital stock was merely a declaration. Today, through the Registry of Transparency and Beneficial Owners (RTBF), Municipalities and the ICT have full access to the traceability of all shareholders. At GLC Abogados, we specialize in ensuring that investment structures comply with these reporting requirements without compromising the security of the partners.

4. The Importance of the Regulatory Plan (Plan Regulador)

The validity of a concession depends on the Regulatory Plan in effect. This document defines whether the land use is tourist, residential, or commercial. Furthermore, the payment of annual canons (based on appraisals by the Ministry of Finance) is an essential requirement to keep the right in good standing; failure to pay is a direct cause for immediate cancellation.

5. Challenges in Transfers and Collateral

Concessions are not perpetual assets and face specific limitations in the financial market:

• Collateral: They can only be encumbered (mortgaged) in favor of institutions within the National Banking System.
• Inheritance: The death of a foreign owner can trigger a legal conflict if the heirs do not meet the nationality or residency requirements demanded by the respective municipality.

Conclusion

Legal security on the coast is not presumed; it is built through a due diligence process that considers not only the law but the specific interpretation of the Municipality where the project is located. At GLC Abogados, we protect your investment against these administrative complexities.