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Company Formation in Costa Rica

Even though it is not a traditional offshore jurisdiction, Costa Rica offers great incentives for foreign companies that want to open businesses here. Foreign investors who want to open a company in Costa Rica have several legal entities to choose from. Also, one of the best ways of moving here is through citizenship by investment in Costa Rica.

 Quick Facts  
Types of companies

– general and limited partnership,

– private limited liability company,

– stock corporation

Offshore company availability

It is possible to open an offshore company in Costa Rica.

Minimum share capital requirements

USD 1
Minimum number of shareholders

At least 2 shareholders are required to open a company in Costa Rica.

Local manager required (YES/NO)

No

Incorporation timeframe (approx.)

Approx. 5 weeks

Corporate tax

– Standard rate: 30%,

– lower rates of 5% to 20% apply for small companies

Dividend tax

15% for non-resident companies and individuals

VAT rate

– 13% standard rate,

– lower rates: 1%, 2%, 4%

Number of double tax treaties (approx.) 3 double tax treaties with: Germany, Spain and Mexico
Registered address availability (YES/NO)

Yes, virtual offices can be used for company formation in Costa Rica.

Shareholders annual meeting required

Yes, within the first 3 months of the year.

Availability of electronic signature

Yes

Annual return filing requirements

Annual tax returns must be filed within 10 weeks from the end of the financial year.

Full foreign-ownership availability 

Yes, full foreign ownership is available.

Tax exemptions/incentives (YES/NO)

– import duties,

– income tax,

– VAT,

– export tax,

– real estate transfer tax

These are exemptions available under the Free Zone Law.

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For example, if the activities of the offshore company are carried out outside Costa Rica, no taxes on income or profits are charged. The activities of the company are not subject to the exchange of information between Costa Rica and other countries, since it didn’t sign any double tax treaties. If you are interested in company formation in Costa Rica, our agents are at your service. We also offer assistance for immigration to Costa Rica.

How to obtain citizenship by investment in Costa Rica

Immigration to Costa Rica is possible through the usual route, which implies employment or family reunification, or investment. The latter is dedicated to 3 categories of applicants:

  • persons who are financially independent;
  • retired persons;
  • investors.

Businessmen can obtain residency in Costa Rica if they invest minimum 200,000 USD in a company, real estate, or other types of assets, or if they inject minimum100,000 USD in plantation of forests.

The main advantage of this program is that it enables applicants to move to Costa Rica with their close family members and they can also obtain citizenship in an expedited manner.

Steps to open a company in Costa Rica

No matter if you are a foreign or local investor interested in company formation in Costa Rica, here are the steps you need to complete:

  1. select the type of company;
  2. draft the incorporation papers;
  3. file the documents with the Companies Register;
  4. obtain a tax identification number;
  5. register for social security purposes;
  6. apply for national and occupation risk insurance.

As a foreign investor, you also need to consider that you need to apply for a residence permit. You can do that through the scheme for citizenship by investment in Costa Rica. If you cannot be present there for the incorporation of the company, you can appoint a proxy. This will lead to an additional step in business registration: submit an Ultimate Beneficial Owner (UBO) affidavit with the Trade Register.

In May 2021, Costa Rica was accepted as a member of the Organization for Economic Co-operation and Development (OECD) which has transformed it into a very appealing investment destination. Even so, foreign direct investments contributed only by 7.8% to the country’s gross domestic product (GDP) before the 2019 pandemic.

If you decide to open a business in Costa Rica, get in touch with our experts who are at your service. You can also rely on our immigration lawyers in Costa Rica for assistance in moving here.

Types of companies available for registration in Costa Rica

These are the legal structures that can be used to start a company in Costa Rica:

  • the limited liability company which requires at least 2 shareholders and one director;
  • the corporation which requires at least 2 shareholders and a minimum of 3 directors;
  • the branch office which can be set up by foreign companies that need to appoint at least one representative.

In most cases, the offshore company is registered as a limited liability company or stock corporation.

Foreign citizens who are interested in immigration to Costa Rica can use any of the above-mentioned structures to set up businesses and relocate here. Apart from this option, they can also use the golden visa program through which they can obtain residency in Costa Rica.

Documents to prepare for starting a company in Costa Rica

In order to register a company in Costa Rica, including an offshore one, the future business owner must prepare the following papers:

  • the application forms released by the Trade Register;
  • the Articles of Association;
  • the power of attorney for the representative in the case of foreign shareholders;
  • decision for the appointment of the director(s).

Even when using external company formation services in Costa Rica, you should know the preparation of the documents take around 24 – 48 hours. So, feel free to use our solutions if you want to open your business as soon as possible.

Offshore companies procedures in Costa Rica

There are some restrictions for those who want to start a business in Costa Rica in the following sectors: public investment management, banking, mutual fund management insurance, alcohol distilleries, petroleum refining, telecommunication, electricity, television broadcasting. For the activities not totally forbidden is required that the foreign company be part of a joint venture where the majority is owned by the residents, including those who have moved through citizenship by investment in Costa Rica.

The name of an offshore company must be in Spanish. If it is written in another language, an official Spanish translation must accompany it.

Every year, an annual tax of 300 USD must be paid, and also a registration fee of 300 USD is required. If you want to open a business in Costa Rica, our agents can present the main fees you need to pay.

In the free zones, the offshore companies created in Costa Rica benefit from a large number of advantages, such as the fact that the income tax on profits and the customs duties on equipment, materials, and machinery are fully exempted for a period of 12 years, followed by an exemption of 50 % for the next 6 years. Also, the VAT and the selective consumption tax are not payable for a period of 12 years and then only 50 % is payable for a period of a maximum 6 years. The payments to non-residents are not subject to withholding taxes. We can also help offshore company owners who want to apply for residency in Costa Rica.

The offshore companies opened in Costa Rica may take many forms of business, but the most advantageous one is the SA (stock company). The procedure for company formation in Costa Rica is not complicated, however, for a quick procedure, you can use our specialized services. If you are interested in immigration to Costa Rica, our advisors can help you.

Stock companies features explained by our Costa Rica company formation agents

A stock company is incorporated by at least two founders and is managed by a Board of Directors, composed of the president, one treasurer, and a secretary. Another requirement is that each offshore company must have a resident agent (a lawyer) and a registered office in Costa Rica.

The liability of the members is limited to the extent of their contribution to the company’s capital. There are no requirements for minimum share capital and the provided capital is divided into transferable shares.

The general meetings require a 50% presence of the members and the decisions of the Board of Directors are approved by at least 50 % of the members. If the company doesn’t operate in Costa Rica, there is no need to keep general meetings every year.

If you are interested in relocating to Costa Rica as an investor or through any other means, do not hesitate to request our services. Our company formation agents and immigration specialists work together to offer personalized, quick, and reliable solutions.

If a company doesn’t perform any commercial activity in Costa Rica, it is not necessary to fill the financial statements. If you decide to start a company in Costa Rica, do not hesitate to contact us. Assistance in obtaining residency in Costa Rica is also among the services we provide. Feel free to address our immigration lawyers in Costa Rica for guidance in moving here.