Costa RicaCosta Rica

Opening a Business in Costa Rica

Many Costa Rican residents choose to open a corporation, most commonly a stock corporation known as a sociedad anonima, or S.A. Owning a corporation affords you several benefits, such as the ability to open a business bank account, request a cell phone line, or apply for a loan, even if you do not have Costa Rican residency.

Corporations are also used to protect investments, such as real estate, cars and other large purchases. In the event that someone brings a lawsuit against your company, only your company's assets will be at stake. For example, if you are at fault in an accident and the injured party decides to sue you for damages, they would file against the company that owns your vehicle, not your person. Any assets you hold, whether in your own name or in another company, would not be considered in a court of law. 

In August 2011, the Costa Rican Congress voted to impose an annual tax on stock corporations. Active corporations, defined as those that carry out some sort of business activity, will pay annual taxes of 158,100 CRC (approximately $316).  Inactive corporations, or those that do not participate in profit-making activities, will be taxed 79,050 CRC (about $158) annually. According to current plans, corporations will pay taxes in January each year. New corporations opened during the course of the year will pay pro-rated taxes. Micro and small businesses are an exception to the rule and will not pay annual corporation taxes; talk with your corporate lawyer if you think you are eligible for this tax exemption.  

Opening a stock corporation is a relatively simple process that takes 2 to 8 weeks and costs $300-$500, including requisite accounting materials. There are five basic steps: 

1. Contact a reputable lawyer. Make sure that your lawyer has good response time to your phone calls or emails. By law, the minimum cost to open an S.A. is about $300. As soon as you get the ball rolling, your lawyer will draft the corporation's articles of incorporation.

2. To form an S.A., at least two individuals must sign the articles of incorporation; these will be known as the poderosos, or company representatives with decision-making power. The corporation must also have a minimum of three board members, most often defined as the president, treasurer and secretary. There are no nationality or residency requirements for any of these individuals. Choose people you trust, and keep in mind that after the company has been registered, original members may be written out of the company.

3. Your lawyer will collect identifying documentation, including your Costa Rican ID or passport, civil status, occupation and address. You will choose a company name, and your lawyer will double check the National Registry database to verify your chosen name is unique in Costa Rica. 

4. Once the articles of incorporation are executed, your lawyer will file the paperwork with the National Registry. At this time, you must purchase six accounting record books and their corresponding government stamps, usually for $15-$20. Your lawyer may take this step on your behalf. At this time, you must also publish legal notice of incorporation in the country's legal newspaper, La Gaceta, for a period of eight days.

5. When the National Registry approves your corporation, it will be recorded as a persona juridica in the Corporate Registry and you will be issued a corporate ID number (cedula juridica). Your lawyer will provide you with a certified copy of your articles of incorporation. To save a few dollars in lawyer fees, you may choose to request a certificate of incorporation directly from the National Registry.

If you plan to do business or reside in Costa Rica, owning a corporation – or several corporations – is a good idea. The best piece of advice throughout this process is to choose business partners you trust. A good idea is to incorporate with your spouse, good friends or family members with whom you maintain a solid relationship. 

Opening a Business in Costa Rica in Pictures

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