Being known as a business-friendly country for foreign investors and tourists, Costa Rica is one of the most ideal countries for investors and entrepreneurs looking to start businesses in Latin America.
Political stability, high education levels, as well as the fiscal incentives offered in the free-trade zones, are the major incentives that attract international investors and entrepreneurs to Costa Rica.
Also, a lot of flexible practices in business, tax advantages, and good privacy are more reasons why investors and entrepreneurs choose to start a business in Costa Rica.
Choose the right type of business corporation in Costa Rica
The first step in starting a business in costa Rica is to decide on the right company structure for the business. Costa Rica has different business structures that differ in terms of complexity, number of people involved, and liability protection. There are a few different types, but here are the most common.
- Sociedad Anonima (Anonymous Society/S.A): this business structure is similar to a corporation in the U.S. To form an S.A. in Costa Rica, several people are required, including a minimum of two shareholders, three board members, and a resident agent.
- Sociedad de Responsabilidad Limitada (Society of Limited Responsibility/S.R.L.): this business structure is similar to a limited liability company in the U.S. Forming an S.R.L. in Costa Rica is much simpler since only two people are required to be shareholders, also no board of directors and usually no resident agent is imposed.
Entrepreneurs can also choose to form a Branch in Costa Rica.
Decide on a legal name
In Costa Rica, a legal name must be assigned to the new company and the company name must be unique and approved by the registry before incorporation. The company name may be in English, given that the name is accompanied by the corresponding Spanish translation. You can check the proposed company name at the National Registry ( Registro de Personas Jurídicas) to verify the availability of the name and (if available) register it.
Choose a registered office / legal address
All companies in Costa Rica must have a registered office in Costa Rica. This is a location where all official company documents and correspondents may be served.
Prepare and sign all required documents
Among the required documents is the Articles of Incorporation.
The Articles of Incorporation authorize the constitution of the company in Costa Rica. This document is necessary for business formation as it is going to work as the backbone of the company and dictate the way it is run.
This document requires the legal advice and signature of a lawyer in Costa Rica to make sure that it covers all mandatory aspects. The Articles of Incorporation must also be signed by all the shareholders, and the signatures must be notarized.
Costa Rica has a platform that enables companies to submit their Articles of Incorporation online. It’s called “Crear Empresa” and its objective is to reduce the time it takes to review and approve the documentation.
Open a bank account and deposit share capital in Costa Rica bank account
As a requirement for company registration in Costa Rica, applicants must open a bank account and deposit 25% of the initial capital in the bank.
Applicants must also make payment for registration fees, stamp duties, and other applicable costs from this bank account.
In Costa Rica, each bank provides different types of accounts with many advantages depending on the agreement and objectives of the company. It is recommended that the bank chosen offers good pricing structures for multinational transactions.
Register the company as a taxpayer
For this step, all documents must be submitted to the Ministry of Finance of Costa Rica to get a taxpayer identification number or Número de Identificación del Contribuyente (TIN).
Register as an employer at the Costa Rican Social Security
The company must also be registered as an employer with Caja Costarricense de Seguro Social (CCSS, Social Security Institution). After submitting the required documents, the CCSS will issue a registration form that allows the company to start operations.
Get the required business licenses
Depending on the type of business the company is involved in, the company may be required to apply for a variety of licenses and permits.
A company incorporation process in Costa Rica is simple. It doesn’t require the owner to be present in the country as long as he/she has a Power of Attorney and an incorporation agent.
Interested in company registration in Costa Rica? – Let’s go ahead and contact your Damalion expert now.
