The business environment in Costa Rica is known for its friendliness and openness towards foreign direct investment (FDI). When it comes to corporate compliance requirements, there is little distinction between national and foreign companies. If you want to learn more about Corporate Compliance Requirements in Costa Rica, you can find detailed information on our website.
There are numerous advantages to conducting business in Costa Rica. Firstly, English proficiency levels in the country are higher than the Latin American average. Additionally, Costa Rica shares the same time zone as the majority of the United States, which facilitates business relations between the two regions. Moreover, the country has a highly educated population.
Setting up a company in Costa Rica is a relatively easy process. Much of this ease is due to the digitalization of the institutional procedures required for company formation. Many constitution processes can now be completed online through various platforms. To start a company in Costa Rica, the sole requirement is to have two partners and a unique company name that is not already copyrighted. There are no specific requirements regarding minimum capital or currency.
The legal representation of your company will depend on the chosen legal structure. In the case of a Sociedad Anónima (SA) or a Sociedad de Responsabilidad Limitada (SRL), the difference lies in the format of administration and the individuals responsible for it. An SA typically has a management board, while an SRL usually has a single manager. Foreigners can hold any of these positions, and if none of the legal representatives reside in Costa Rica, a resident agent must be appointed.
Every company operating in Costa Rica must have a fiscal address. This address serves multiple purposes, including receiving notifications and messages from the Costa Rican Social Security and serving as the registration address for the company as an employer. The address must be a real one, as authorities may conduct on-site visits to inspect working conditions.
Administration differs between an SRL and an SA. An SRL only requires one manager, whereas an SA often has a management board. Shareholder meetings and management board meetings have specific legal requirements, but these can be further specified in the company’s constitution documents.
All companies must maintain up-to-date legal books noting bylaws and share divisions of partners. These books are generally kept private but must be made available if requested by shareholders or public judges. Additionally, accounting records containing all transactions must be maintained. These records are not required for annual tax declarations but may be requested during inspections. It is advisable to keep copies of all transactions for the past 10 years.
Regarding tax obligations, all commercial activities in Costa Rica are subject to several taxes, including the Tax on Legal Entities, Income Tax, and Sales Tax. Additional taxes may apply depending on the company’s specific activity. The company must register with the Treasury and fulfill its tax obligations accordingly.
Once a company is registered with the Costa Rican National Register, further steps must be taken before commencing business operations. These steps include registering as a contributor with the Treasury, registering the company with the Costa Rican Social Security Board, registering with the National Insurance Institute, obtaining municipal permits, and obtaining specific permits related to the company’s activities.
For additional information on entity legal compliance in Costa Rica, check out our FAQ section on our website. It addresses common questions and concerns raised by individuals looking to operate within the country.
If you need assistance navigating the institutional systems and ensuring compliance in Costa Rica, our team at Biz Latin Hub is here to help. Contact us to start your business adventure in Costa Rica.
