The ultimate intent of an escrow account is to get your funds from point A to B for different purposes. If you’re buying a house, a vehicle, opening a business or embarking on any other investment that requires a direct, large injection of capital that is difficult to move abroad, you should absolutely use an escrow.
Guarantees the custody of funds
An Escrow company serves as an impartial third party that guarantees the parties involved the custody of funds by following all the requirements of compliance with the law, while all the contractual and administrative aspects of the transaction are completed before payment to the parties is released.
Usage of Escrow
Escrows can be used for the purchase of a property, the deposit on a rental property, and on the deposit of a property from a developer that has not been built yet.
You should know that Escrow accounts are subject to their own Know-Your-Customer (KYC) requirements and compliance falls under a Costa Rican government entity known as SUGEF. OLS Escrow was started in 2019 to complement the Real Estate services of Outlier Legal and is registered and fully compliant with SUGEF.
When was it established
The service for custody of funds while awaiting the completion of a transaction (best known simply as Escrow) was established in Latin America during the last decade. In part due to the great demand of foreign buyers wanting to invest abroad in general, and in particular, their interest in investing through the purchase of business and property.
To set your expectations, you should be prepared for the compliance aspect of the Escrow process to take about a week. In the event the receiving bank has additional questions about the source of funds, the process can take a few more days.
The cost of the Escrow service is based on the value of the transaction and is a sliding scale that will increase depending on the amount that needs to be in custody. Keep in mind that amounts over $10,000 USD are regularly frozen in bank-to-bank operations. If you are working with countries with internal banking restrictions due to the various global crises as of the date of this writing, amounts under $2,000 USD may be flagged and accounts frozen. In short, handling large amounts of money has become a headache for anyone wishing to send or receive money around the world. Outlier Legal launched OLS Escrow to help clients purchase their property headache-free.