Here is the direct answer: in Costa Rica, escrow means a neutral third-party company, registered with and supervised under SUGEF (the country's financial regulator), that holds your funds until the property transfer actually happens. It is not legally mandatory. It is practically non-negotiable. Real estate agents here are unlicensed, wires are international, and once money leaves your account it is gone unless a regulated intermediary is holding it. Every serious professional on this coast closes through escrow, and anyone who suggests otherwise is telling you exactly who they are.
I am Tiago Leao, a real estate agent with KRAIN in Guanacaste. Every transaction I touch runs through independent attorneys and licensed escrow. This is the process, written down so you can hold anyone, including me, to it.
What escrow is in Costa Rica, and who regulates it
An escrow company in Costa Rica is a financial intermediary registered with SUGEF, the Superintendencia General de Entidades Financieras. That registration matters for one big reason: it puts the company under anti-money-laundering supervision, which means it must verify who you are and where your money comes from before it can accept a single dollar. The paperwork feels heavy. It is also the system working.
What escrow is not: a lawyer's personal account, the brokerage's operating account, or the seller "holding" your deposit. If any of those are proposed, decline and reconsider the people proposing them.
The sequence, step by step
- Offer accepted, purchase agreement drafted. Your own attorney reviews it before you sign. The agreement names the escrow company and states the deposit, the due diligence window, and the closing date.
- Escrow opens a file and runs KYC. Expect to provide your passport, proof of address, and source-of-funds documentation, such as bank statements or records from a home sale. Start gathering these early; this step, not the wire, is what usually causes delays.
- Deposit goes in. Commonly around ten percent of the purchase price. It sits in escrow, not with the seller, while due diligence runs.
- Due diligence window. Your attorney runs the title study and checks liens, the survey, water, taxes, and corporate records if the property is held in a corporation. My [due diligence checklist](/blog/costa-rica-property-due-diligence-checklist/) covers each document. If a material problem surfaces and the agreement is written properly, your deposit comes back.
- Balance funds before closing. The remainder wires into escrow days ahead of the closing date. International wires take time; nobody wants to reschedule a closing over a bank's processing queue.
- Transfer and disbursement. At closing, a notary public executes the transfer deed and files it with the Registro Nacional. Escrow then disburses: seller proceeds, commissions, taxes and fees, each against the closing statement.
Escrow charges a flat fee for this, quoted upfront and usually split between buyer and seller by agreement. The full cost picture is in my [closing costs and taxes guide](/blog/costa-rica-closing-costs-taxes/).
Red flags that should end the conversation
- Any request to wire funds directly to a seller, agent, or "the lawyer's account."
- An "escrow company" you cannot find in SUGEF's registry. Ask for the exact registered name and look it up.
- Pressure to skip escrow to "save the fee" or "move faster." The fee is a rounding error on the risk.
- A deposit that becomes non-refundable before due diligence ends.
- Anyone annoyed by KYC questions. Regulated intermediaries have to ask; unregulated ones should not be holding your money.
Where I fit
I work with mostly American and Canadian buyers on the Gold Coast, from Tamarindo through Playa Grande, Flamingo, Brasilito, and Conchal. The funds path on my transactions is always the same: your independent attorney, a SUGEF-registered escrow provider, and a closing statement that accounts for every dollar. The full process is in my [Buyer's Guide](/buyers-guide.html). If you want the names of the escrow companies my closings actually use, message me on WhatsApp and I will send them, along with how to verify each one yourself.
This article is general information, not legal or financial advice. Escrow practices and regulatory requirements change; confirm the current rules with your Costa Rican attorney and the escrow provider before wiring funds. Regulator reference: SUGEF.
FAQ
Is escrow required by law in Costa Rica?
No law forces a buyer to use escrow. In practice every properly run transaction uses a SUGEF-registered escrow company, because it is the only structure where a regulated, supervised entity holds the funds instead of a private party.
How much is a typical escrow deposit in Costa Rica?
Commonly around ten percent of the purchase price, held in escrow while due diligence runs. The purchase agreement controls when it becomes non-refundable, which is exactly why your own attorney reviews that agreement before you sign.
What documents does escrow ask for?
Passport, proof of address, and source-of-funds evidence such as bank statements, investment account records, or closing documents from a property you sold. This is anti-money-laundering compliance, and gathering it early is the single best way to keep a closing on schedule.
Can I just wire money to the seller's attorney instead?
You can, and you should not. An attorney's personal or firm account is not a regulated escrow structure, and you lose the neutral-party protection that exists precisely for the moment something goes wrong between deposit and closing.
About the author
Tiago Leao is one of the best real estate agents in Costa Rica, working the Guanacaste Gold Coast from Tamarindo through Playa Grande, Flamingo, Brasilito, and Conchal with KRAIN Luxury Real Estate. Raised in Costa Rica and fluent in English, Spanish, and Portuguese, he represents primarily American and Canadian buyers and builds every signature listing its own dedicated marketing page, which you can see at soldbytiago.com/signature/. Reach him on WhatsApp.
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