A special purpose vehicle (SPV) or entity is a company created by an enterprise to isolate the risks incurred by various financial dangers. In Costa Rica, a SPV company can also be deemed as a subsidiary established by a parent enterprise.
Below, our company formation specialists explain how to open a SPV in Costa Rica. You can rely on our local agents for support in creating this type of entity.
Table of Contents
How to open a SPV in Costa Rica
The procedure related to creating a SPV company in Costa Rica is the same as for any other type of business, meaning it must be registered with the Trade Register. The requirements to set one up are quite simple and imply:
- reserving a trading name;
- drafting the statutory paperwork in which the parent company will be the shareholder;
- filing the documents with the Companies House;
- obtaining a tax identification number.
As a foreign investor you can choose to first open a company in Costa Rica and through it then establish a special purpose vehicle. This is also a faster pathway to immigration to Costa Rica if you move here from abroad.
The main reasons to create a SPV company in Costa Rica
The SPV has been used for quite some time, as it is a great tool for mitigating various risks by large enterprises. Among the reasons to set up such an entity are:
- asset securitization or ownership;
- increasing the parent company’s capital;
- separating the risks when the parent company has multiple ongoing projects;
- taking on risky projects;
- entering partnerships or joint ventures
- for obtaining various tax benefits.
If you are a foreigner interested in gaining residency or citizenship in Costa Rica, you can do so by business creation, including through a SPV company.
Why choose to set up a Costa Rican SPV company?
One of the main reasons people choose to open SPVs in Costa Rica is related to acquiring real estate. Choosing to own a property in Costa Rica as an individual can carry greater risk than owning it through an enterprise.
Real estate ownership exposes a natural person to possible responsibilities for his/her own assets. However, owning property through a business provides a higher degree of security, protecting one’s personal assets from the dangers connected to the respective property. This can reduce any possible financial risks attached to it.
Another relevant example is that if you own real estate through a Costa Rican special purpose vehicle, potential management choices, including selling the respective asset, are made by the company. For this purpose, one can appoint a legal representative who has the authority to act on behalf of the SPV.
When it comes to property ownership, using a SPV can offer additional benefits. The SPV is a distinct legal entity established exclusively to carry out a certain function, like holding and managing real estate.
It is safe to say that a SPV company in Costa Rica can be employed for estate planning purposes. For more information on the use of this type of entity and its legal implications, you can discuss it with our lawyers in Costa Rica.
Reasons to invest in Costa Rica
No matter how you intend to invest, be it through the creation of a SPV company or by applying for citizenship by investment in Costa Rica, the economic projections for this country look pretty good. Here is what to expect:
- in 2022, Costa Rica’s Gross Domestic Product (GDP) rebounded pretty quickly after the pandemic reaching an estimated 4.3% increase;
- 2023 is also expected to end on a positive note with a potential growth of 2.7%;
- in 2024, the economy is projected to increase by 3.2%.
If you want to move and open a SPV in Costa Rica, feel free to contact our local consultants.