Types of legal business structures in Costa Rica

Costa Rica is one of the most politically calm and financially attractive regions in Central America with a territorial tax policy. This allows residents and non-residents of the jurisdiction to be completely exempt from corporate tax if the profit is received in another country in the world.

Registration of a company in Costa Rica is no different from a similar procedure in another state, except for the new requirements for annual reporting established in 2019 for all business owners without exception.

Costa Rica for inactive (offshore) companies – benefits

Why are many foreign entrepreneurs seeking to register a company in Costa Rica, which is not one of the cheapest countries after the 2018-2019 tax reform, which completely nullified the previously existing rules on anonymity and tax reporting?

To get an answer to this question, it is enough to correctly understand the legislative aspects, which, although they are in solidarity with the requirements of the OECD on transparency and the fight against illegal financial transactions, still have a lot of positive aspects, primarily for the beneficiaries/founders and shareholders of the business.

Costa Rica has a stable economy and is in “good standing” with the OECD, which is very important for business and investment.

For foreign and local entrepreneurs in the country, there is a single taxation regulation – territorial. This means that taxes are calculated on the net profit received only in the territory of the jurisdiction.

Both a foreigner and a local citizen can open an offshore company in Costa Rica.

Good territorial communication with different countries, allows you to conduct business activities in several directions at once.

It is possible to open a corporate account for an international offshore company in Costa Rica if the interests of the legal entity are represented by a resident of the state. Banks are very reluctant to work with foreign founders. Our experts will help to solve such a problem, who will help you choose a bank and open an account for your offshore company on the most favorable terms and absolutely in any country.

Register a company in Costa Rica – business forms and requirements

In order not to pay taxes at the place of registration of the company, as well as to have a real presence in the country of Central America, it is enough to choose one of the organizational and legal forms for international business and go through a few simple steps of incorporation:

1. Rent an office – the legal address of the company.
2. Select a company name with a Spanish translation that is verified for compliance.
3. Prepare documents for the Register of Beneficiaries / Companies: tax number, passports of each of the founders, data of shareholders and directors, capital contribution to the account, etc.
4. Prepare the company’s charter, which must have a translation into the language of the country of incorporation of the business.
5. Pay the state fee.
6. Receive constituent documentation and start the work process.

Costa Rica is a party to the Hague Convention and accepts apostille documents from foreign citizens.

Registration of LLC in Costa Rica (Sociedad de responsibilidad limitada)

The most popular form of business among foreigners is a Limited Liability Company (Sociedad de Responsabilidad Limitada; Sociedad Limitada, SRL). This structure implies:

• The presence of at least 1 director and 2 shareholders, who can be local citizens or tax residents of another country.
• The minimum value of 1 share is 1 USD.
• The amount of the authorized capital for an LLC in Costa Rica is not established by law but is usually at least $ 100, 25% of which must be deposited into the company’s account.
• A prerequisite for the formation of a legal entity on behalf of a foreign or local entrepreneur is a registered office in the country of registration, where accounting records should be kept in Spanish.
• In the absence of a local director (resident), the authority to register a company and maintain constituent documents is transferred to a registered agent (individual/legal entity).
• The company secretary is one of the mandatory rules for LLC.

Non-public joint stock company (Sociedad anonima)

The registration of a non-public joint-stock company in Costa Rica (Sociedad Anónima, SA) is also carried out according to general principles, including prior approval of the company name and the transfer of documents to the registration authorities of the country. What you should know about SA:

• Shareholders’ rights are limited to the amount of the contribution to the authorized capital of the company.
• The number of directors is at least 3, which cannot be legal entities.
• The shareholders of the company are at least 2.
• The minimum authorized capital is USD 1, but as a rule, it is at least USD 100.

The CA must have a local representative (lawyer), which cannot be a director of the company. Also, the company must have at least 4 officials – president, secretary, financial manager (treasurer), and controller.

As in the case of SRL, the Costa Rica AO must have an office in the country of registration.

Note: Public Joint Stock Company (Sociedad Anónima Abierta, SAA) has no restrictions on the number of shareholders and can list shares on the stock market.