Company Formation in Costa Rica: A Complete Guide
Introduction to Company Formation in Costa Rica
Costa Rica is an attractive destination for entrepreneurs and investors looking to establish a business in a politically stable, business-friendly environment. With favorable tax policies, strong legal protections, and a growing economy, Costa Rica is an ideal jurisdiction for both local and international businesses.
Whether you are setting up a small business, an international corporation, or an offshore company, understanding the legal requirements, business structures, and registration process is crucial for successful incorporation.
Key Benefits of Registering a Company in Costa Rica
✔ 100% Foreign Ownership – No local partner required; foreign investors can fully own companies.
✔ Favorable Taxation – Territorial tax system where foreign-earned income is not taxed.
✔ Business-Friendly Environment – Transparent regulations and pro-investment policies.
✔ Fast Company Registration – Business incorporation within 2-3 weeks.
✔ Free Trade Zones (FTZs) – Tax incentives for companies operating in designated economic zones.
✔ No Capital Requirements – Most business structures do not require minimum capital deposits.
Types of Business Entities in Costa Rica
1. Sociedad Anónima (S.A.) – Joint Stock Company
✔ Suitable for large businesses and public companies.
✔ Requires at least two shareholders and a board of directors.
✔ Liability is limited to capital contributions.
✔ Allows public share issuance and investor participation.
2. Sociedad de Responsabilidad Limitada (S.R.L.) – Limited Liability Company
✔ Best for small to medium-sized businesses.
✔ Requires at least two partners (but no board of directors).
✔ Shareholders’ liability is limited to their capital contributions.
✔ More flexible management compared to an S.A.
3. Sole Proprietorship (Empresa Individual)
✔ Owned and operated by a single individual.
✔ The owner is personally liable for all debts and obligations.
✔ Ideal for freelancers and small-scale businesses.
4. Branch Office (Sucursal de Sociedad Extranjera)
✔ A foreign company can set up a branch in Costa Rica.
✔ The parent company is fully liable for the branch’s activities.
✔ Requires registration with Costa Rican authorities.
Steps to Register a Company in Costa Rica
Step 1: Choose a Business Structure
✔ Decide on the type of entity (S.A., S.R.L., Sole Proprietorship, or Branch).
✔ Consider shareholder liability, taxation, and operational needs.
Step 2: Register the Company Name
✔ Verify name availability with the National Registry of Costa Rica.
✔ Choose a unique name that complies with local regulations.
Step 3: Draft and Notarize Articles of Incorporation
✔ Must be prepared and signed before a public notary.
✔ Includes company name, purpose, shareholder details, capital structure, and management rules.
Step 4: Register with the National Registry
✔ Submit incorporation documents to the Costa Rican National Registry (Registro Nacional).
✔ Pay government fees and wait for approval (usually 1-2 weeks).
Step 5: Obtain a Tax Identification Number (TIN)
✔ Register with Costa Rica’s Tax Administration (Ministerio de Hacienda).
✔ Receive a unique tax identification number (NITE) for legal operations.
Step 6: Open a Corporate Bank Account
✔ Choose a local or international bank in Costa Rica.
✔ Provide company registration documents and shareholder identification.
✔ Some banks may require an initial deposit for activation.
Step 7: Register for Social Security & Permits
✔ Enroll with the Costa Rican Social Security Fund (CCSS) if hiring employees.
✔ Obtain business licenses and operational permits, if required.
Our Advantages
✔ 100% Foreign Ownership – No local partner required.
✔ Fast Registration – Company incorporation within 2-3 weeks.
✔ No Minimum Capital Requirements – Most structures don’t require capital deposits.
Taxation & Compliance in Costa Rica
Corporate Taxes
✔ Costa Rica follows a territorial tax system – only local income is taxed.
✔ Corporate tax rates range from 10% to 30%, depending on annual income.
VAT (Value Added Tax)
✔ Standard VAT rate: 13% on most goods and services.
✔ Some industries and exports qualify for tax exemptions.
Annual Filing Requirements
✔ Companies must submit annual tax returns and financial statements.
✔ Non-resident companies must appoint a legal representative.
Costa Rica’s Free Trade Zones (FTZs) & Tax Benefits
Companies that establish operations within Costa Rica’s Free Trade Zones can benefit from:
✔ Corporate tax exemptions (0% to 6%) for eligible businesses.
✔ Import duty waivers on raw materials and capital equipment.
✔ Reduced VAT and employment taxes for qualifying firms.
✔ Customs and logistical advantages for export-based businesses.
Industries such as technology, pharmaceuticals, manufacturing, and logistics often benefit from FTZ incentives.
Why Start a Business in Costa Rica?
Costa Rica’s stable economy, investor-friendly regulations, and strategic location make it a prime choice for entrepreneurs. The country is known for its high-quality workforce, excellent infrastructure, and ease of doing business. Whether you’re looking to start a local company or expand internationally, Costa Rica provides a flexible and efficient corporate environment.
📩 Need help with company registration? Contact our experts today for a hassle-free incorporation process!
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