Costa Rica offers numerous opportunities for foreign investors looking to establish a business. Its strategic location, favorable business climate, and well-educated workforce make it an attractive destination for entrepreneurs. This guide will walk you through the steps to successfully register a company in Costa Rica, ensuring compliance with all legal requirements and leveraging the benefits offered by this vibrant economy.
Business Opportunities in Costa Rica
Costa Rica presents profitable investment opportunities across various sectors, making it a prime business destination in Central America. The country’s strategic location near the United States facilitates exports, and its Caribbean and Pacific coast ports enable seamless product shipping. Additionally, the nation boasts a bilingual workforce, favorable business climate, and excellent infrastructure.
The diverse economy includes agriculture, manufacturing, and service sectors, with tourism being a significant contributor. Other sectors with potential for investment include pharmaceuticals, education, hotel and restaurant equipment, auto parts, construction equipment, renewable energy, and technology.
Benefits of Starting a Business in Costa Rica
Setting up a company in Costa Rica offers several advantages:
- Strategic Location: Proximity to both the U.S. and South American markets.
- Favorable Business Climate: Supportive of foreign investment with reasonable taxation rates.
- Free Trade Agreements: With countries like the U.S., Canada, Chile, and Mexico, eliminating or reducing tariffs.
- Privacy and Anonymity: Company shareholders enjoy complete privacy.
- World Trade Organization Membership: Enhances business and trade opportunities.
Requirements for Starting a Business in Costa Rica
To start a business in Costa Rica, you must fulfill several legal and regulatory requirements:
1. Choose the Company Structure:
Business structures in Costa Rica include sole proprietorships, partnerships, corporations (Sociedad Anónima, S.A.), and LLC or limited liability companies (Sociedad de Responsabilidad Limitada, S.R.L.). Selecting the appropriate structure depends on your business needs.
2. Obtain a Digital Signature Certificate:
A Digital Signature Certificate (Firma Digital) is mandatory for setting up an offshore company. It allows business owners to digitally sign and authenticate legal documents.
3. Reserve the Legal Company Name
Check the availability of your desired company name with the National Registry (Registro Nacional) and register it. The name must comply with legal requirements and be unique.
4. Register the Company with the National Registry
Submit the articles of incorporation, including company bylaws and shareholder agreements, to the National Registry. This process includes paying the registration fee.
5. Get Necessary Permits and Licenses
Depending on the nature of your business, additional permits and licenses may be required. For instance, businesses with a physical presence must obtain a business license from the local municipality and an occupancy permit from the health department.
6. Register as a Taxpayer
Register with the Costa Rican Tax Administration to obtain a taxpayer identification number (TIN). This involves registering for appropriate taxes such as income tax, value-added tax, and corporate tax.
7. File the Ultimate Beneficial Owner (UBO) Declaration
Since Costa Rica’s membership in the OECD, it is mandatory for all legal entities to file a UBO Declaration, disclosing information about shareholders and ultimate beneficiaries.
8. Register with the Social Security Agency
After incorporation, register as an employer with the Costa Rican Social Security Agency (Caja Costarricense de Seguro Social, CCSS).
Types of Business Structures in Costa Rica
Costa Rica offers various business structures, each with unique requirements and benefits. The three main types are Corporations (Sociedad Anónima, S.A.), Limited Liability Companies (Sociedad de Responsabilidad Limitada, S.R.L.), and Sole Proprietorships. Below is a detailed look at each type, including the costs, requirements, and specific roles like the Fiscal.
- Corporations (Sociedad Anónima, S.A.)
Corporations are the most widely used business structure in Costa Rica. They are suitable for larger businesses or those planning to have many shareholders. Key features include:
- Directors and Shareholders:
- Requires at least three directors (President, Secretary, and Treasurer) and two shareholders.
- The Board of Directors must include at least three members, and additional positions such as Vice President or Vocal can be established.
- Shareholders can be individuals or legal entities, domestic or foreign.
- Share Transfer: Shares can be transferred without requiring other shareholders’ approval, offering flexibility in ownership changes.
- Legal Representation:
- The President acts as the legal representative, but this power can also be granted to other members.
- Representation can be unipersonal or joint, with or without limitations.
- Comptroller:
- A Comptroller must be appointed who cannot hold any powers of attorney on behalf of the company.
- The Comptroller must not be a spouse or relative up to the second degree of the administrators.
- Fiscal (Auditor):
- A Fiscal (Auditor) is required, who may be a shareholder or not.
- However, the Fiscal cannot be the spouse or a close relative of the directors up to the second degree.
- The Fiscal’s role is crucial for overseeing the financial integrity of the corporation and ensuring compliance with regulations.
- Fiscal Requirements: The company must register before the Tax Authorities and maintain corporate books authorized by local tax authorities.
- Limited Liability Companies – LLC (Sociedad de Responsabilidad Limitada, S.R.L.)
Limited Liability Companies are simpler than corporations and are ideal for smaller businesses or those preferring easier management. Key features include:
- Management and Quota Holders: Requires only one manager and one quota holder, making it easier to establish and manage.
- Share Transfer: Shares (quotas) cannot be transferred without the consent of other shareholders, providing more control over ownership.
- Legal Representation: No Board of Directors is required. The company is represented legally by one or more managers and submanagers, simplifying the structure.
- Flexibility: This structure is beneficial when the investor does not want to publicize the names of additional individuals as part of a Board of Directors.
- Sole Proprietorships
A sole proprietorship is the simplest business structure, ideal for individual entrepreneurs. Key features include:
- Liability: Does not provide limited liability protection, meaning the owner is personally responsible for all debts and obligations.
- Management: Managed solely by the owner, offering full control but also personal risk.
Company Registration Process
The registration process involves several steps:
- Pre-registration
- Choosing the company structure
- Obtaining a Digital Signature Certificate
- Preparing powers of attorney (POAs) and articles of incorporation
- Registration
- Submitting the articles of incorporation to the National Registry
- Paying the company registration fee
- Post-registration
- Register as a taxpayer with the Costa Rican Tax Administration
- Getting necessary permits and licenses
- Naming a registered agent (for companies domiciled outside Costa Rica)
- Filing the UBO declaration with the Central Bank of Costa Rica (BCCR)
- Registering with the Costa Rican social security agency
- Applying for insurance
- Paying taxes
- Costs of Incorporating a Company in Costa Rica
The cost of incorporating a company in Costa Rica depends on various factors:
- Type of business
- Volume of business activities
- Fees of service providers
Business owners must pay a one-time incorporation fee and annual fees based on the type and structure of the business. Costs typically range from US$3,000 to US$15,000.
HOW TO REGISTER A COMPANY IN COSTA RICA
Starting a business in Costa Rica is a structured process requiring careful planning and adherence to legal requirements. By following these steps, you can efficiently establish your company and take advantage of Costa Rica’s numerous business opportunities.
Engaging with a professional legal firm, such as BGA Abogados, can simplify the process and ensure compliance with all local regulations, allowing you to focus on growing your business.
For expert guidance and support in registering your company in Costa Rica, contact BGA Abogados (info@bgacorp.com). Our extensive experience in corporate law will help streamline your incorporation process and ensure your business is set up for success.