Banking in Costa Rica is one of the earliest topics that expats encounter when moving to Costa Rica. We are confident to assure our clients that banking in Costa Rica is safe and easy, as long as you know and follow the rules. Below is a short outline of everything you need to know about banking in Costa Rica.
Types of banks in Costa Rica
Banks in Costa Rica are either state-owned or private. Four public banks were established in 1949 and they have remained open and public since. There are also 29 other licensed banks, mutual associations and credit unions in Costa Rica.
State-owned banks are more prevalent around the country and therefore more popular. The three state-owned banks (the fourth being the central bank) — Banco Nacional, Banco de Costa Rica (BCR), and Banco Credito Agricola de Cartago (the smallest) — account for nearly half of total banking assets.
According to the World Bank, Costa Rica has some of the most stable banks in the world. State owned banks offer good protection and less fees. No state owned bank has failed in Costa Rica in over 30 years and all deposits are insured.
Private banks are more likely to employ bilingual staff but they are only found in major cities. They are also the only option for foreigners getting a loan in Costa Rica (see section on loans below.) Each will have different fees depending on their services. Private international banks in Costa Rica include Citibank and Scotiabank.
Costa Rica’s banking policy is set by the Banco Central de Costa Rica (central bank). SUGEF (the general supervisory agency of finance) enforces compliance with the banking policy. Aside from the state-owned banks, there is also a state-owned mortgage bank, 18 commercial banks, four mutual house-building companies, 12 private finance companies, 27 savings and loans cooperatives and thirty investment and retirement funds. The state insurance company is called Instituto Nacional de Seguros (INS).
Types of bank accounts
Anyone can open a restricted account with a bank in Costa Rica. But if you have a residence in Costa Rica, you have more options available.
Most banks in Costa Rica offer credit or debit cards. You can also choose to set your accounts to colones, dollars or both (BCR also offers accounts in euros). These dual currency accounts are great for expats, who can convert between currencies for cheaper and more easily. Colones accounts receive higher interest rates but there is a monthly devaluation trend of the colon to the dollar.
Opening hours for most bank offices are from 9 to 5, Monday to Friday. But most banks now offer efficient online services to pay bills, make transfers and more. If you do need to go into the bank office, keep in mind that bank lines are longest in the early morning, on paydays and around the holidays.
Opening a bank account in Costa Rica does not generally happen on the same day you apply. It may take a couple of days for the bank to review all the information provided. It is also worth noting for US citizens that Costa Rican banks are required to report income to the IRS.
How to open a bank account in Costa Rica
A basic savings account is the most common type to open, and the easiest. Most banks require the customer to physically appear at the bank in order to sign the application in the presence of the banking officer.
The basic paperwork requirements for opening a bank account differ by bank and are always evolving. They typically require:
- Identification (DIMEX/cedula or passport)
- Minimum deposit (anywhere between $20 and $200, depending on the institution)
- Proof of residency (a physical document like a utility bill or lease agreement — something that states your local address)
- A ‘Know Your Client’ form for US clients that verifies personal information
- Proof of income to ensure that your funds are coming from legitimate sources. Salaried employees need proof of income from their local employer like a letter or pay stub. Independent contractors need to produce a letter of income from an accountant.
- Reference letter from your home bank
You may also be required to provide a reference letter from a previous banking institution or three months of bank statements from your current bank or financial account. US citizens will also have to fill out various tax forms to inform the IRS of offshore bank accounts.
Non residents can open an account with just a valid passport and cell phone number, but this account will have a restricted monthly deposit limit of around $1000. Costa Rica is serious about money laundering and terrorism and all customers must provide a statement and pay stub from employers to open an account. If you are self-employed, you must make sure that your business is registered and operates legally.
If you are opening an account in the name of a Costa Rican corporation then the additional requirements will be:
- A certificate of corporate standing to show the legal representative.
- A certificate of beneficial shareholder ownership to show the beneficial owners of the corporation.
Can you get a loan?
Securing a loan in Costa Rica is difficult for expats. Personal loans, car loans and mortgage loans are all available but challenging to have approved. Credit requirements are tight and not likely to loosen in the near future. Credit history is very important for securing a loan in Costa Rica so expats who bank in Costa Rica with an international bank at which they also have an account in their home country will have an easier time proving their credit history.
Expat loan applicants can also expect to make a big downpayment, which might be around 50%. Applicants must also agree to pay high rates and put down collateral. Interest rates in Costa Rica are significantly higher than in the US. The record low was around 7% and the record high was 20%. The current rate for loans in Costa Rica sits around 11% – 12%
Since 2008, only private banks offer loans to foreigners as a measure to prevent fallout from the international economic crisis. In some cases, expats may need their consulate to approve their loan in Costa Rica. And applicants over the age of 65 are likely to be declined for any loan in Costa Rica due to their age.
Securing a loan or mortgage from a bank is super challenging, cost prohibitive and virtually none of our clients choose this route. Fortunately, if financing is the only way that you can proceed with a home or land purchase, we do have a variety of sellers that will consider a personal financing option. This option typically comes with a 50% down-payment and a short-term mortgage of 3-5 years at a more reasonable interest rate of around 5% – 10%.