Well as is usual in this strange world of ours we go from one extreme to another… Remember the old days when the banks used to fight each other to get a new client?

Well those days are long gone because now we have to fight – and fight hard – just to open an account and then continue fighting to keep the darned thing open.

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In working in professional financial services since 1986 I’ve have had numerous bank accounts with many different firms all over the world and in dealing with my international investments clients here in Costa Rica I have been part of I-don’t-know-how-many transactions with practically every financial institution in Costa Rica and the banking system is worse than ever.

I love Costa Rica, but I’m sorry to say I hate all of the banks in Costa Rica! There’s no difference between them, they’re all bloody awful!

The Costa Rica banks are very much in tune with (and have been trained by) the US banking and “money laundering” authorities. Contrary to the garbage we see on news, Costa Rica banks are incredibly strict with regards to the ‘Know Your Client’ (KYC) rules (Law 8204) or in Spanish Conozca a su Cliente and the source of funds, especially for US citizens.

So please don’t assume that your Costa Rica bank account information is private and NOT being shared with US authorities, the kind of comprehensive reporting that goes on between the US authorities and the Costa Rica banking authorities (SUGEF) would shock you…

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In keeping with the procedures forced on us by our North American Big Brother and the ‘we-need-to-know-everything-about-you’ laws, the banks here want a ridiculous amount of information and, require that you need to verify your income for EACH bank account every two years and if unable to do so, they will close your account.

And working with cash doesn’t avoid these problems either, in sending c250,000 colones to my construction foreman a few weeks ago, the bank had me fill out all sorts of forms because it’s cash – Yeech!

c250,000 is less than $500 for goodness sake!

I was informed by one of my banks – Banco Improsa – where I have one personal account and two corporate accounts that if they did not receive this information – with certified proof of income letters by a CPA (paid for by me of course) for the privilege of keeping my money in their bank – that they would close the accounts which I have had with them for about seven years.

Makes you wonder how well they know me after seven years huh?

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It’s understood that it’s not the bank manager’s fault that she has to do this but after a series of 68 emails (Yes! sixty eight) about one small corporate account which only had about $15K go through it last year, I told her what I thought …

My advice to my international clients is to keep no more than six month’s worth of cash living expenses inside Costa Rica, and where possible, the rest is safely invested ‘offshore’ in multi-currency investment accounts in London, Dublin, Hong Kong or Zurich.

It’s just one more step towards a cashless society where the ‘man’ has total control over you and I and everything we do. In my mind that’s slavery!

Written by Scott Oliver, author of How To Buy Costa Rica Real Estate Without Losing Your Camisa and Costa Rica’s Guide To Making Money Offshore.

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