Costa Rica Maritime Zone Law (ZMT): Concessions, Terms, and Fees

Costa Rica’s Maritime Zone Law (Ley No. 6043, 1977) treats the first 200 meters inland from the high tide line as inalienable national heritage that no one can privately own. The strip is divided into a 50-meter public zone where permanent construction is banned and a 150-meter restricted zone where land can be used only through a concession granted by the local municipality. Foreign ownership is capped, concessions expire, and buildings on concession land revert to the state when they do. For anyone thinking about buying, building, or investing near a Costa Rican beach, those rules define what is actually possible.

The Public Zone and the Restricted Zone

The 200-meter belt splits into two areas with very different legal treatment.¹

The first 50 meters from the tide line is the Public Zone. No one can build here permanently, and the law guarantees open access for everyone. You cannot fence it, wall it off, or otherwise keep people from reaching the ocean. The only exceptions involve infrastructure approved for genuine public benefit, such as docks or drainage.

The next 150 meters inland is the Restricted Zone. Development and residential use are allowed here, but only through a concession. You cannot buy the land. Properties marketed as “beachfront” in Costa Rica often sit within this zone, and the rules governing them are not the rules that apply to ordinary real estate.

When the Law Doesn’t Apply

Not every parcel near the coast falls under the Maritime Zone Law. Urban areas on the shoreline and properties already registered as private land in Costa Rica’s Public Registry are outside its reach. Around 1970, the government briefly permitted a small number of landowners to formally register properties within what later became the Restricted Zone as fee simple holdings. Places like Flamingo Beach have parcels that date to that window. Those registered titles remain valid and are not subject to the concession system.

If you are evaluating a coastal property, resolve this first: does the seller hold a registered title (a “finca inscrita”) or a concession right? The two look similar in a listing and behave nothing alike in practice. A registered title works like any other private property in Costa Rica. A concession is a different instrument, and treating them as interchangeable is where most foreign buyers get into trouble.

What a Concession Actually Is

A concession is not ownership. It is a long-term administrative permission granted by the state through the municipality, giving the holder the right to use a specific parcel of government land for an approved purpose. The state keeps ultimate ownership at all times. It functions closer to a structured lease than a purchase, though it carries more legal weight than a rental.

The concession is formalized in a contract between the holder and the municipality and then recorded in the Concessions Section of the National Registry, which gives the holder an enforceable real right. That registration allows the concession, under the right conditions, to be transferred, used as collateral, or passed to heirs.¹

Because the land itself belongs to the state, the holder’s rights survive only as long as they follow the contract terms and pay the required annual fees. The municipality can cancel the concession if the holder violates the agreed land use, fails to pay, or breaches the law. You get the right to use prime coastal land, but you never own the ground beneath you.

Who Can Hold a Concession

Article 47 disqualifies several categories of applicants. Foreign individuals must have at least five years of continuous legal residency in Costa Rica before they are eligible. Corporations domiciled outside the country cannot hold concessions at all. Neither can entities formed inside Costa Rica by foreigners if more than 50% of the shares or capital belongs to non-citizens.²

Bearer-share corporations are flatly excluded. They were once a common vehicle for holding Costa Rican assets anonymously, but they are incompatible with the transparency the concession system requires.

The rule applies beyond the initial grant. Any subsequent transfer of shares or membership interests to foreigners is automatically void if it would push foreign ownership past the 50% ceiling. A foreigner who buys into a concession-holding corporation without checking the ownership math can end up with shares that have no legal effect. The Costa Rican Tourism Institute (ICT) verifies these ownership structures before concessions receive final approval.²

Trust Structures for Foreign Buyers

Some foreign buyers try to work around the ownership restrictions using a trust arrangement (fideicomiso), where a local bank holds the concession rights and the foreigner keeps beneficial ownership. These structures exist in the market and get promoted by real estate agents, but they carry real legal risk. The law’s foreign ownership prohibitions focus on who controls the capital, and a trust arrangement that effectively gives a foreigner economic control over a concession may not survive regulatory scrutiny. Anyone considering this route should get independent legal advice from an attorney who specializes in maritime zone law rather than relying on assurances from the seller.

The Regulatory Plan Requirement

No concession can be granted in an area that lacks an approved regulatory plan (plan regulador). This local zoning document, adopted by the municipality, dictates which parcels are available for concession and what uses are permitted on each one: residential, commercial, hotel, mixed-use, or other categories. Without a plan, the municipality cannot process applications.

Many coastal municipalities still do not have approved regulatory plans, so large stretches of the Restricted Zone remain legally frozen. Development cannot proceed, concessions cannot be granted, and structures built without a valid concession are illegal. Before spending time or money on a specific location, confirm the municipality has an active regulatory plan covering the area.

Applying for a Concession

Applications start at the maritime zone department of the local municipality. You identify the specific lot within the regulatory plan, complete the municipality’s official form, and submit supporting documents. Individuals provide notarized identification. Corporations provide current standing certificates showing legal status and shareholder composition. The application must describe the intended use of the land and include technical drawings of the proposed project, so the municipality can confirm the proposal fits the zoning for that parcel.

After internal review, the municipality publishes a notice (edicto) in La Gaceta, opening a window for third parties to oppose the application. If no valid objection is filed, the municipality drafts the concession contract, then sends it to the ICT for mandatory review. Only after the ICT authorizes can the contract be executed and recorded in the National Registry. The full process runs months, and delays at each stage are normal.

Environmental Permits

Separate from the concession itself, any construction project in the maritime zone requires environmental clearance from SETENA (Secretaría Técnica Nacional Ambiental). Depending on the scale and location, SETENA may require a full Environmental Impact Assessment or a simpler environmental declaration.

SETENA evaluates whether the proposed construction will damage sensitive ecosystems such as mangroves, wetlands, or protected forests. If the project passes, SETENA issues a Resolution of Environmental Viability with binding conditions for mitigation and monitoring. Approvals generally take two to six months, and projects near ecologically sensitive areas draw more intensive review. Holders remain subject to ongoing compliance audits after approval.

Starting construction before obtaining environmental viability is not a shortcut worth taking. Unauthorized construction in the maritime zone can trigger demolition orders and criminal penalties regardless of whether you hold a concession.

Term, Annual Fees, and Renewal

Article 48 sets the concession term at no less than five and no more than 20 years. The specific duration is negotiated with the municipality. Many concessions are granted at the 20-year maximum, but shorter terms exist for smaller or lower-investment projects.²

Holders pay an annual fee called a canon to the municipality in place of traditional property taxes. The law delegates the specific rates to its implementing regulations, and municipalities set the amount based on the zone, land use category, and appraised value of the parcel. In practice, canons typically fall between 2% and 5% of assessed value, though the exact rate varies by jurisdiction. Appraisals are updated periodically to reflect current coastal land values.¹

Article 50 allows concessions to be renewed successively for additional terms of up to 20 years, provided the holder requests renewal before expiration, the municipality agrees, and the ICT approves. Renewal is not automatic. The municipality has discretion, and while most compliant concessions get extended, there is no legal guarantee.²

Transferring a Concession

Because the land belongs to the state, you cannot sell a concession parcel the way you would sell a house. The standard approach is to hold the concession through a Costa Rican corporation and sell the shares of that corporation to the buyer. The concession stays with the entity; the entity changes hands.

The transfer still requires municipal approval. The buyer must meet every eligibility requirement, including the foreign ownership cap. If the incoming shareholder is not Costa Rican, the transaction must keep at least 50% Costa Rican ownership of the corporation’s capital. Transfers that violate this rule are void under Article 47.²

Due diligence on a concession purchase is more complex than a standard property transaction. Verify the concession is current, that annual canon payments are up to date, that the regulatory plan has not changed in ways that affect permitted use, and that the concession term has enough time remaining to justify the investment. Buying a concession with two years left before renewal means accepting the risk that the municipality declines to extend it.

What Happens When a Concession Ends

This is the point that catches the most investors off guard. If a concession expires and is not renewed, any buildings and improvements on the land revert to the municipality. The former holder has no right to compensation for structures they built. The law does not recognize vested property rights the way fee simple ownership does, and a court challenge on those grounds is unlikely to succeed.

Cancellation for cause produces the same result. If the municipality terminates a concession because the holder violated its terms, the holder loses both the right to use the land and everything built on it. Article 65 goes further: if the holder committed or participated in a crime related to the concession, cancellation is automatic and the holder is also liable for any damages caused.³

Every dollar spent building on concession land depends on the concession remaining in good standing. There is no safety net if it lapses.

Enforcement and Penalties

Costa Rica does not treat maritime zone violations as paperwork problems. Authorities have the power to demolish unauthorized structures once discovered and to charge the full cost of demolition to the person who built without permission. Neither the municipality nor the enforcing authority bears any liability for the destruction.³

Criminal penalties apply alongside the administrative ones. Under Article 62, building in the maritime zone in violation of the law or obstructing a demolition order carries one month to three years of imprisonment.³

Enforcement has historically been uneven, with some municipalities pursuing violations aggressively and others looking away. The legal authority to demolish exists regardless of local practice, and a change in administration or a complaint from a neighbor can trigger action on structures that went unnoticed for years. Relying on lax enforcement is gambling with the whole investment.

Financing a Concession Property

Because concession land is not private property, getting a mortgage on it is significantly harder than financing a titled property. Banks view concessions as higher-risk collateral since the underlying asset belongs to the government and the holder’s rights depend on ongoing compliance and periodic renewal. Many Costa Rican banks are reluctant to lend against concession rights at all, and those that do impose stricter terms, higher interest rates, or lower loan-to-value ratios.

Foreign buyers face a second hurdle. Costa Rican banks are generally cautious about lending to non-residents even for titled property, and the combination of foreign borrower plus concession collateral makes conventional financing rare. Most concession transactions in practice involve cash, seller financing, or private lending arrangements. Build this into the budget before committing, because discovering the financing gap after signing a purchase agreement is an expensive surprise.

1
Sistema Costarricense de Información Jurídica. Ley 6043 – Ley Sobre la Zona Maritimo Terrestre
2
Sistema Costarricense de Información Jurídica. Ley Sobre la Zona Maritimo Terrestre
3
Asamblea Legislativa de la República de Costa Rica. Ley Sobre la Zona Maritimo Terrestre (Ley 6043)