The process to liquidate your business in Costa Rica can be straightforward. Although a small territory, it is one of the most stable democracies in the region and known for its legal security and stable legal frameworks. Citizens, residents, and foreign investors find great value in Costa Rica’s commercial offerings. Many foreign companies choose to form a company in Costa Rica due to the government’s pro-business attitude and progressive economic sectors. Entering and exiting the Costa Rican market is relatively straightforward. If your business is exiting the market, it’s important to understand how to liquidate your business.
To liquidate your business in Costa Rica, you need to undertake liquidation proceedings. There are two types of liquidation procedures: voluntary liquidation and insolvency procedure.
In voluntary liquidation, the shareholders must meet and vote to dissolve the company. The liquidation must be agreed upon by majority vote and recorded in the Book of the General Assembly. A liquidator is appointed to oversee the liquidation process. The company’s assets and liabilities are inventoried, and outstanding taxes must be paid. The dissolution agreement must be submitted to the Trade and Companies Register, and a notice must be published in the government gazette. The liquidator then liquidates the assets and property of the company, pays off debts, and distributes the remaining proceeds to the shareholders. The dissolution agreement is filed with the national register to complete the liquidation process.
In the case of insolvency, the process is initiated by a creditor or tax authorities. If the debtor fails to pay the debt or provide sufficient assets, the court will declare the debtor insolvent and appoint a liquidator. The liquidator manages the company’s assets and liabilities and follows a similar process as voluntary liquidation but under the supervision of the court.
Common FAQs for liquidating a business in Costa Rica include questions about the process, appointment of a liquidator, notice to authorities, and handling outstanding debts and taxes.
