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Setting Up a Corporation

Setting Up a Corporation

There are four types of business organizations that can be formed in Costa Rica:

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  • Corporation (Sociedad Anonima or "S.A.")

  • General Partnership (Sociedad en Nombre Colectivo)

  • Limited Partnership (Sociedad en Comandita)

  • Limited Liability Partnership (Sociedad de Responsabilidad Limitada)

Of these, the most common is the Sociedad Anonima, or S.A., pronounced "essay-ah." The initials S.A. follow the company name, similar to the abbreviations Inc. or LLC (Limited Liability Corporation) in the United States. 

To open a corporation in Costa Rica you will need to submit a public document to the Mercantile Registry; this will begin the process of registering the company and obtaining the corporate identification number, known as the cedula juridica. After opening the corporation, you will be required to register with the Public Registry (Registro Publico), obtain operational permits and any import/export permits required. 

Corporations are very helpful for limiting liabilities in Costa Rica, and therefore many people own several – one for each vehicle or property they own, and also to keep business transactions separate from personal finances. Expect to pay upwards of $400 to register your own corporation. To speed up the process, you may want to purchase a pre-registered “shelf” corporation; they cost about the same as a new S.A., but you cannot choose a custom name. 


In order to register a new corporation, you must complete the following requirements: 

  1. Submit a notarized document to the Mercantile Registry requesting a corporate identification number. At least two individuals must sign the articles of incorporation documents.

  2. The notary public who drafts the request must verify with the Public Registry that the proposed trade or commercial name for the company is not already registered.

  3. The notary public who drafts the request must also prepare a study of the Registry in the case that contributions of personal property or real estate are registered as part of the capital stock.

  4. Publish in Costa Rica’s legal newspaper, La Gaceta, an announcement of the corporation’s formation. The announcement must appear for a total of eight days. A notary public or corporation applicant may complete this step.

  5. Pay all due revenue stamps and registry rights at any Banco de Costa Rica branch office. A notary public or corporation applicant may complete this step.

Once the above requirements have been completed, present all paperwork to the Mercantile Registry: public documents, a paid receipt for revenue stamps and/or registry rights, and a notarized document with newspaper coupon number as proof that the corporation notice has been published in La Gaceta. 

Issuance of Articles of Incorporation:

The following information must be included in your articles of incorporation:

  1.  Date and place of incorporation.

  2.  Type of corporation.

  3.  Corporation purpose, or the company’s mission statement. 

  4.  Residence of the corporation.

  5.  Name, nationality, residence and marital status of the shareholders.

  6.  Name of officers on the corporation’s Board of Directors. There must be at least three members on the Board of Directors – usually a president, treasurer, and secretary. 

  7. Corporation duration and possible extensions. The duration of the corporation may be between 99 years and 100 years, beginning on the date that it is formed.

  8. Capital stock amount. This may be in dollars or colones, and must be for a nominative amount. Most commonly, stock is issued for 1,000 CRC – for example, 10 shares worth 100 CRC each. All shares are indivisible.

  9. Method of capital stock division amongst the shareholders. 

  10. Enumeration of powers. 

  11. Allocation of profits and losses.

  12. Procedure for corporation dissolution or liquidation.

  13. If the corporation is domiciled outside of Costa Rica, a registered agent must be named. This individual will be responsible for receiving the service of process.

Tax Deadlines:

The fiscal year for all companies in Costa Rica varies upon your request to the Internal Revenue Service of Costa Rica (Direccion General de Tributacion Directa). The reporting period begins on September 30 and ends on November 30; the fiscal year ends on September 30. According to the law, all balances and inventory are due the day before the end of the period. On that day, dividends must be paid and losses observed in proportion to each partner's share(s). Foreign-earned income is not taxed. Sales tax, consumer taxes and other taxes can be made on a monthly basis or every three months based on your arrangements with the Internal Revenue Service of Costa Rica.

New Corporate Tax:

In April 2012, all businesses, including the sociedad anonima (S.A.) and the Limited Liability Partnership (sociedad de responsabilidad limited), will be required to pay a new corporate tax. The fiscal year for the business tax is from January 1 to December 31. Beginning in 2013, the tax will be due by January 31, but for 2012, payment is due by April 30, since notification of the new law was only passed on December 27, 2011. All future corporations must pay this tax upon filing the articles of incorporation with the National Registry. Likewise, all corporations, subsidiaries, sole proprietorships, and representatives of foreign corporations that dissolve their corporations before July 1 will not pay the tax.

Active companies, or those with commercial activity, will be required to pay an amount equivalent to 50% of a base monthly salary, currently equivalent to 180,300 CRC ($360). Inactive companies will pay 25% of a monthly minimum salary, or 90,150 CRC ($180).

Required Savings Fund:

According to provisions of the Commercial Code of Costa Rica, each fiscal year 5% of a corporation's profits will be retained and used to create a legal reserve fund (Fondo de Reserva Legal). This practice will end when the total amount of the legal reserve fund equals 20% of the original value of the stock stated on your articles of incorporation, and not on the real market value of your stock.

For example, if your company's initial capital was $100,000 U.S. and the profit of your company for a year was $50,000.00 U.S. You will be required to save $2,500.00 U.S. as the legal reserve fund. You will continue doing that until your legal reserve fund reaches $20,000.00 U.S. You will not be able to spend that money during the life of the corporation. However, you may be able to invest that money in another company. Consult a lawyer for further assistance.

Board of Directors:

The Board of Directors, which must have at least three members, must manage a Costa Rican corporation. These members are generally composed of a President, Secretary and Treasurer, but may have any title. The president is authorized to act in the name of the corporation, with an unlimited power of attorney to access the corporation’s bank accounts. This power can also be shared by other board members upon request – and the powers contained in Article 1253 of the Civil Code of Costa Rica. Both shareholders and members of the Board of Directors, if permitted by the corporation’s bylaws, may grant special or general powers of attorney to third parties. 

A Trustee, appointed for the same term as the Board of Directors, is in charge of the supervision of the corporation and the actions of the board of directors, with the same powers contained in Article 197 of the Commerce Code of Costa Rica. The Trustee cannot be a relative of either of the partners or the Board of Directors.

Although the Board of Directors and the Trustee are nominated for the duration of the corporation, the members of the board can be re-elected upon the board of directors' request, and can be nominated for another term determined by the Board of Directors. The partners of the corporations may be members of the corporation.

Personal information such as full name, nationality, occupation, civil status, residence, passport number or identification number must be submitted and included in this section for each board member.

The corporation must keep Corporate Books (Libro de Actas), which have three types of record logs: Board of Director meetings, Shareholder meetings, and a Stock Registry log. Stock Holder Registrations (Registro de Accionistas), Inventory and Balances (Inventario y Balances), Daily and Monthly Transaction Books (called the Libro Mayor, which keeps records of transactions per account) and a Daily Transaction Book (Libro de Diario - it keeps records of daily transactions) must also be recorded.

Board of Directors and Stockholder's Meetings:

The Board of Directors must meet every three months or any other period of as stipulated in the corporation’s bylaws. Board meetings must be held at the head offices of the corporation. Decisions will be taken upon majority. In the case of a tie, the President decides. A quorum is two members.

The stockholder meeting will take place within three months after the end of each fiscal year (September 30). Bank statements, balances and performance of the corporation will be discussed. The Secretary must record meeting minutes in the stockholder meeting book.

The stockholder meeting may be convened by the President of the Board, a business partner who owns at least 25% of the stock, or in specific cases, by a business partner who owns at least 1% of the stock of the company with an eight day advance notice stating the date after its publication, via telex to each partner.

The quorum for the first stockholder meeting is the total number of stockholders. The quorum for the second stockholder meeting - one hour after the specific time - may be the total number of stockholders that show up to the meeting. If all the stockholders are present there is no need to call for a meeting. It will not be necessary for the president to convene the meeting if the majority of shareholders are present.

Internal Auditor:

The Costa Rican Commercial Code requires that all corporations appoint an internal auditor, called a Fiscal. This individual may be a member of the Board of Directors, but this is not required; the auditor’s principal responsibility is to safeguard the shareholders’ investment.


The corporation may be dissolved due to the causes stated in Article 201 points B, C and D of the Commerce Code of Costa Rica. In this case, the Stockholder Meeting, together with the Quorum of law, will proceed to authorize and delegate power to a liquidator.

Operation Permits:

Depending on the business type, a company may have to obtain an operating permit (Patente de Funcionamiento), issued by the municipality of the location where your company will be operating, and a health permit issued by the Health Department of Costa Rica (Ministerio de Salud) at the Health Center of the location where your company will operate.

In order to issue your company's operation permit, a municipality officer must visit your facility to ensure that your restrooms and facility meet the basic requirements to be open to the public (restroom access, state of the building, etc.) You will need to renew this permit every year. The fee for this permit depends on the business type. A foreign company that plans to open branches in Costa Rica must appoint and retain a legal representative with full Power of Attorney for the business or branch.

Other Permits:

If your company's main activity will be to trade products of foreign companies in Costa Rica, your company must obtain a License of Representation of Foreign Companies (Licencia de Representacion de Casas Extranjeras) issued by the Costa Rican Department of Commerce (Ministerio de Economía, Industria y Commercio). Please see requirements to be a local representative of a foreign company.

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