Escrow in Costa Rica: How Your Money Stays Safe
A plain guide to how SUGEF-regulated escrow protects your money when you buy property in Costa Rica.
Escrow in Costa Rica works much like it does in the US or Canada: a neutral third party holds your money until every condition of the purchase is met. The key difference is who holds it. Here, escrow companies that manage third-party funds must register with SUGEF, Costa Rica's financial regulator, which gives buyers a real layer of oversight.
Why does Costa Rica handle escrow differently?
In the United States, a title company or a closing attorney usually holds the funds. Costa Rica has no title insurance industry in the American sense, and banks here are slow to open accounts for foreigners. So a small group of specialized escrow companies grew up to fill the gap. They exist for one purpose: to receive your wire, hold it in custody, and release it only when the purchase agreement says they can.
That structure matters more here than it might at home. Most buyers in Playas del Coco are wiring six or seven figures from abroad to a country where they may not yet have a bank account, an attorney they have worked with before, or much local history. A regulated middleman is what makes that leap of faith reasonable. We cover the broader purchase process in our guide on how to buy a home in Costa Rica.
Who regulates escrow companies in Costa Rica?
Escrow providers that administer third-party money must register with SUGEF (Superintendencia General de Entidades Financieras), the same public entity that supervises Costa Rica's banks. The obligation comes from the country's anti-money-laundering law, Law 7786, which requires fund administrators, among other businesses, to register and comply with know-your-customer rules, transaction records, and suspicious-activity reporting. The legal publisher CostaRicaLaw.com has a good plain-English summary of these gatekeeper rules.
Registration is not a formality. A registered escrow company must document who its clients are, where their money comes from, and where it goes. That is exactly what you want from the entity holding your life savings for sixty days.
One honest caveat: SUGEF registration means the company is supervised for anti-money-laundering compliance. It is not a government guarantee of the deposit itself. That is why your attorney should still review the escrow agreement before you wire anything. We wrote about this in why hiring a good lawyer in Costa Rica is essential.
How does the escrow process work, step by step?
Nearly every sale we are involved in follows the same sequence:
- Offer accepted. The purchase and sale agreement names the escrow company and sets the deadlines.
- Escrow account opened. You complete the company's onboarding paperwork (more on that below). This can take a few days, so start early.
- Earnest money deposited. Buyers typically wire a deposit of about 5 to 10 percent of the purchase price. It sits in escrow, not with the seller and not with us.
- Due diligence. Your attorney checks title, liens, surveys, corporate books, and permits. If a serious problem surfaces within the agreed period, the deposit comes back to you under the terms of the contract.
- Balance wired. A few days before closing, you send the remaining funds to the same account.
- Closing and disbursement. Once the transfer deed is signed before a notary public, escrow pays the seller, the brokers, the attorney, and the taxes, then sends you a final accounting. Your attorney files the deed with the National Registry.
At no point does your money pass through the seller's hands, the agent's hands, or ours. That is the whole design.
What does escrow cost in Costa Rica?
Escrow is one of the smaller lines in your closing budget. Current guides for foreign buyers, such as this 2026 overview of Costa Rica escrow, put typical pricing at a flat fee of roughly $500 to $2,000, or about 0.5 to 1 percent of the purchase price, depending on the company and the deal size. Wire fees and currency conversion can add a little more.
Who pays is negotiable. In our market the buyer usually covers escrow, though we also see 50/50 splits. Ask for a written quote before you sign the purchase agreement, and confirm all closing numbers with your attorney, since fees change and every transaction is different.
What paperwork will the escrow company ask for?
This is the part that surprises North American buyers. Because escrow companies answer to SUGEF under anti-money-laundering rules, they must verify both you and your money before they accept a single dollar. Expect to provide:
- A passport copy and a completed know-your-customer form
- Proof of address
- Documentation of the source of your funds: bank statements, a home sale settlement, investment account records, or business income
If the request feels intrusive, remember it cuts both ways. The same rules that make you dig out bank statements also mean the seller's money trail, and everyone else's in the transaction, gets scrutiny. Gather these documents the week your offer is accepted, not the week you need to fund. Slow paperwork is the most common cause of delayed closings we see, and it is entirely avoidable.
What are the red flags to watch for?
Escrow fraud is rare in Costa Rica, but wire fraud and sloppy practice are not unheard of anywhere. Keep these rules:
- Never wire to a personal account. Not the seller's, not an agent's, not a lawyer's personal account. Funds go to the escrow company's designated account only.
- Verify wire instructions by phone or video call using a number you already trust. Email accounts get spoofed, and altered wire instructions are the classic scam.
- Check the registration. SUGEF publishes a public lookup of entities registered under Law 7786 on its website, so you can confirm the escrow company's status yourself.
- Read the escrow agreement. It should state exactly what triggers a release of funds and what happens if the deal dies during due diligence.
If anyone in a transaction suggests skipping escrow to "keep things simple," treat that as your cue to slow down. Foreign buyers have the same property rights as citizens here, as we explain in our guide for American buyers, but those rights are protected by process, and escrow is the financial half of that process.
How we handle escrow at Expat Properties | CR
We are SUGEF registered ourselves, and we work alongside established escrow companies and independent attorneys on every sale. We never hold client purchase funds, and we would not want to. Our job is to make sure the contract names a registered escrow agent, the deadlines are realistic, and your questions get straight answers.
If you are starting to look at homes or condos in Playas del Coco or Ocotal, browse our current listings or send us a message. We are happy to walk you through how a closing actually unfolds here, with real timelines and real numbers, before you commit to anything.
Frequently asked questions
Is escrow legally required to buy property in Costa Rica?
No law forces you to use escrow, but it is standard practice in nearly every transaction involving foreign buyers. The alternative is wiring money directly to a seller or holding funds in a personal account, which removes every safeguard. Virtually all reputable attorneys and brokers in Guanacaste will insist on a SUGEF-registered escrow company.
How do I verify an escrow company is registered with SUGEF?
SUGEF's official website, sugef.fi.cr, includes a public lookup for entities registered under Law 7786, Costa Rica's anti-money-laundering law. Search for the escrow company by name and confirm its registration status is active. Your attorney can also confirm this for you. If a company is not listed, do not send funds.
How much is the earnest money deposit in Costa Rica?
Deposits of about 5 to 10 percent of the purchase price are typical in our market, held in escrow while due diligence runs. If your attorney finds a title defect or another serious problem within the due diligence period, the contract normally entitles you to the deposit back. The exact terms depend on your purchase agreement.
Cover photo: rawpixel.com, CC0, via Wikimedia Commons · Photo: Spamguy at English Wikipedia, CC BY 2.5, via Wikimedia Commons
