Costa Rica offers many flexible business practices along with beautiful weather and a rich cultural history. It is a favourable destination for starting a business for many reasons — including tax advantages, a high degree of privacy, local fluency in English in addition to a fast incorporation timeline. Investor confidence is growing, with Costa Rica is fast becoming the Central American jurisdiction of choice for individuals and companies looking to set-up operations.
Business Setup in Costa Rica
Taking into account that the process of registering an existing company (as a branch office) can be somewhat complicated, our professional advice, in most cases, is to register a new local company that would only require a few documents and has a shorter company incorporation timeline.
To give you a bit of background information on legal entities (companies) in Costa Rica, 100% foreign ownership is allowed in Costa Rica and the best type of legal entity is the SA or the SRL, which allow for the initial company capital to be in any foreign currency. However, the type of legal entity you wish to establish will be based on your business needs and requirements in the country.
See below some characteristics of The Corporation/Joint Stock Company (Sociedad Anónima – S.A) in Costa Rica – the most common form of legal entity in Costa Rica:
– Allows two or more shareholders.
– Can be 100% foreign owned.
– Shareholders are liable according to the amount of capital they have invested in the company.
– When forming this type of company, different kinds of business activities can be recorded in spite of the fact that only a few of them will be executed.
– Can sponsor the visa of foreign employees.
– No minimum share capital required.
The formation of an SA takes approximately 4-6 weeks once all required documentation has been received and submitted.
The SA can sell and trade shares on the public stock market.
Following on from this, please find below the basic steps to incorporate an SA in Costa Rica:
– Draft and Sign a Power of Attorney (POA) – this allows a local partner to incorporate the company on your behalf.
– Create and sign the company bylaws.
– Register the company with all relevant government authorities.
– Obtaining a local company tax ID number.
– Open a corporate bank account.
– Deposit of the minimal capital to activate the corporate bank account.
There are a number of different types of legal entities in Costa Rica, and the decision to choose one or the other will be based on your planned business activities.
Corporate Requirements in Costa Rica.
– All companies in Costa Rica must meet some minimum statutory requirements, which include the following:
– Appoint a legal representative in Costa Rica (this can be a foreigner individual).
– Register a fiscal/legal address in Costa Rica.
– File monthly tax declarations with the national tax authority.
If the company legal representative is not located within Costa Rica, a resident agent must be appointed. The resident agent must be a Costa Rican lawyer whose role to receive legal and administrative notifications. Many companies owned by foreign persons choose to hire the services of a local group who can assist with the above requirements – ensuring 100% corporate compliance when operating in Costa Rica.
How we can help you
If you are considering forming a business or you need expert help with company registration in Costa Rica, LegalGenius™ is ready to assist you with its skilled team of lawyers, consultants and tax experts. We are committed to making the process as stress-free and streamlined as possible for you, and we will take care of all your document preparation and administrative tasks regarding the registration forms, payment of government fees, local address registration, banking support, etc., whilst always keeping your exact objectives and unique vision in mind throughout the process.
Please use our Company Formation Wizard if you would like to set up your registered company in Costa Rica or if you would like to know the costs involved prior to proceeding with our exceptional services. For other queries and special requests for complex or customised company formation services, please contact us at firstname.lastname@example.org