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When starting a business in Costa Rica, choosing a corporate structure should be the first step, especially if the business is developed by two or more stakeholders. The two most common business structures under Costa Rican Law are the Sociedad Anónima (SA) and the Sociedad de Responsabilidad Limitada (SRL or Ltda.). Below you will find a chart comparing the relevant features and differences between these entities:

Similar to a U.S. Corporation.

Similar to a U.S. Limited Liability Company

Capital may be in any currency.

Capital must be in Costa Rican colones and stated in multiples of 100.


Ownership interest is represented by shares, which are deemed securities and are freely transferable (except for a shareholder agreement requiring the authorization of the Board of Directors or the shareholders). Shares are transferable by endorsing the share. Certificates. Shares may be of different classes and certain classes may have preferences or limitations compared to others.


Ownership interest is represented by Partnership Interests (“Cuotas”). Partnership Interests (“Cuotas”) are not securities and they are not freely transferable. A statutory right of first refusal in acquiring Partnership Interests (“Cuotas”) exists for the benefit of remaining partners. The transfer of Partnership Interests (“Cuotas”) requires the approval of 100% of the partners (unless the articles of association provide for a lesser majority, but never less than 75%). The transfer must be done through a formal assignment agreement.


No statutory preference for acquiring new shares in capital increases.


Statutory preference for existing partners to subscribe to new capital in proportion to their respective stake, in the event of a capital increase. If a Partner is not present at a meeting authorizing a capital increase, he/she must be notified and allowed to exercise this right.


Board of Directors comprised of at least a President, a secretary, and a treasurer.


No Board of Directors. The company is administered by one or more managers or submanagers with the authority granted to them by the partners.


Costa Rican law requires that all companies appoint a Statutory Examiner (“Fiscal”). The main responsibility of the examiner is to determine that all corporate rules, statutory obligations and procedures are duly and adequately followed to ensure protection of the interests of shareholders.


No Statutory Examiner (“Fiscal”) is required.


Definite Term.


Definite Term.


Limited liability for its shareholders. Shareholders are only liable up to the amount of their capital contribution.


Limited liability for its partners, who are only liable up to the amount of their capital contribution.

Incorporation process

  • Once the corporate structure is chosen, then the first step for incorporating a Costa Rican company is to check the availability of the proposed company name; however, the Public Registry will assign you a corporate identification number (“cédula de persona jurídica” in Spanish) that can be used as a corporate name in the meanwhile. In less than one day the proposed name can be verified.
  • Then, a Notary Public drafts and notarizes public deeds of the incorporation charter or bylaws for registration before the Public Registry online. The incorporation deed must be executed by the founding shareholders/partners of the company; at least two persons must concur as founding partners, but once the company is duly incorporated the shares can be transferred, or the Partnership Interests (“Cuotas”) can be assigned to one or more different persons than the founding partners.
  • As a prerequisite for registering the company, 25% of the capital stock indicated in the bylaws (if paid in cash) must be deposited in a national bank. The amount deposited may be withdrawn once the company has been duly recorded. If the founders chose to sign a promissory note, there is no enforceable obligation to deposit capital in a bank account later.
  • Once the incorporation process has been completed, the Public Registry will issue a corporate identification number, assigning a number that becomes evidence of the company’s readiness to start operations lawfully. With the constitution of the company, the Public Registry will assign a number for issuing the legal books of the company.

A company can be incorporated within 5 to 8 business days from the date of execution of the incorporation deed.


All legal entities and other legal vehicles must annually provide the information to the platform managed by the Central Bank of Costa Rica to comply with their declaration. Our director Bernardo van der Laat, explains everything we need to know about the Declaration for the Registry of Transparency and Final Beneficiary in Costa Rica.


Corporations must be registered as taxpayers, even if the company does not have an economic activity yet. The following are the main obligations a company must comply with before the Tax Administration:

Every company must be formally registered as a taxpayer using a D-140 form, where it will specify its economic activity (if any), operational address, legal representative information, and contact information. If the company does not conduct economic activity, then it must be registered under the description of “Legal person incorporated in the country that does not carry out economic activity of a Costa Rican source.”

All corporate entities that are duly registered in the Public Registry must pay corporate taxes. This applies whether or not the company actively engages in a commercial activity.

For companies that are registered as active taxpayers, the payable amount will be determined based on the gross income reported during the prior fiscal year.

If the company is not engaged in commercial activity and is not registered as a taxpayer, it should annually pay fifteen percent (15%) of one monthly base salary.

Those who fail to pay on time, are liable to economic and operational penalties.

The Costa Rican tax system is based on the principle of territoriality. Therefore, only Costa Rican source income derived from real estate, movable assets, goods, operations, and services rendered or located in Costa Rica is subject to taxation. This is regardless of citizenship, residence, or domicile.

Under territorial taxation, the Costa Rican income tax regime encumbers continuous or temporary income received or earned by individuals or entities with legal domicile in Costa Rica. The profits, income, or benefits of a Costa Rican source shall include the services, assets, or capital used in the national territory, obtained during the fiscal year. Any income produced outside Costa Rica is not subject to taxation.

Income tax filings are completed electronically through a digital platform (“ATV” in Spanish).

Legal entities incorporated in the country that do not develop economic activity from a Costa Rican source, must file an Income Tax Return using form D-101. The information to be submitted must include assets, liabilities, and social capital.

This form should be filed within two months and fifteen calendar days following the end of the fiscal year.

All distributions made by a Costa Rican company from its net profit, are subject to a fifteen (15%) withholding tax. However, dividends received by a Costa Rican entity registered as a taxpayer, from another Costa Rican entity are exempted. However, it is advisable to get the assessment of a tax advisor to confirm exactly what kind of fiscal implications will apply for the Costa Rican entity.

Dividend-related tax filings are completed electronically through the ATV digital platform.

With the recent approval of the Tax Reform, the existing Sales Tax evolved into a Value Added Tax (“VAT”) as of July 2019.

The VAT taxes most sales of goods and services at a 13% rate (exceptions are found in the law, such as private education and medical services). Therefore, taxpayers that offer taxable services are obliged to add the 13% applicable VAT rate and report the amounts collected with a monthly report.

Sales tax filings are completed electronically through the ATV digital platform.

All Costa Rican taxpayers are obligated to employ electronic invoices.

Electronic invoices replace paper invoices, to allow the Tax Administration a more efficient way to control tax evasion; while providing real information of sales amount to properly calculate income taxes.

Companies must select an electronic invoice provider that is properly registered before the Tax Administration.

Costa Rican legal entities including, corporations, LLCs, branches, and all those foreign entities which have appointed a local agent with the authority to act on their behalf must complete an annual filing in the digital platform administered by the Costa Rican Central Bank, to provide all the information to determine and identify its ultimate beneficial owners. This requirement came into effect last year as part of the Government´s efforts to prevent money laundering and the obligations provided by the Law to Improve the Fight against Tax Fraud (Ley para Mejorar la Lucha contra el Fraude Fiscal)..

The filing can only be completed by a legal representative with full authority to act and sign on behalf of the Costa Rican entity. Such agent must be a Costa Rican citizen or a resident with DIMEX, given that the filing can only be processed with a special device known as the Digital Signature (“Firma Digital”). However, companies can also appoint a special agent and grant him/her a limited power of attorney, solely for purposes of completing the filing.

The filing must be supported by proper corporate and legal documentation (i.e. certificate of good standing, affidavits, copies of the bylaws, stock ledger, etc.) as applicable according to the place of incorporation of the Entity All documents issued abroad must be duly notarized, apostilled, and up to date.

Costa Rican Companies will be subject to both administrative and economic penalties, for not completing the filing on due time. First, they will not be able to register any amendments to their corporate bylaws or complete any appointments (agents, board members, etc.), before the National Registry, nor will they be able to obtain certificates of good standing. Also, they will be subject to an economic fine.


Zoning Certificate (“uso de suelo”)

The first step to receiving authorization for operating in a specific venue is to obtain a zoning certificate from the local government. Such permit indicates certified zoning and any applicable restrictions on property usage.

Sanitary Operations Permit

In accordance with the General Health Law, companies must request authorization, or an Operation Certificate, from the Ministry of Public Health prior to the initiation of operations. This Certificate is required before obtaining the municipal business license. The activities that are subject to said process, as well as the requirements for obtaining the permit and the duration of such a permit, are defined in Executive Decree N° 30465 which classifies activities in three categories in accordance their level of environmental and health risk: A (high risk), B (moderate risk) and C (low risk).

Operations or municipal license

Law # 7247 and article 79 of the Municipal Code establishes that any entity or individual developing lawful for-profit activities in Costa Rica should obtain a Municipal Permit (Patente Comercial) and pay a tax. The application is filed once before the corresponding Municipality. No additional periodic filing for this permit is required aside from the payment of tax on a yearly basis. Because of municipal autonomy, the forms and requirements to obtain a license may vary among municipalities, according to their legislation and administrative dispositions.


Registering your company name will not automatically grant you the right to use it as a trademark. To register a trademark in Costa Rica, you need to complete the following process:

Availability search

DBased on the process described above, if there are no oppositions filed against the trademark application the registration procedure normally takes from 3 to 4 months.

The trademark registration is valid for 10 years, subject to renewal.


As a general overview, please consider that labor laws and policies in Costa Rica are very protective of employees. Labor regulations are categorized as essential public welfare, and all employment agreements should include all guaranties and rights granted under Costa Rican labor ordinances.

Any clause or provision that may be deemed as a waiver of employees’ statutory rights will be considered null and void under the local legislation.

However, not all parties that assist your company will be classified as employees. Based on the nature of your contract agreements, those relations could also be classified as professional services agreements that are not subject to labor regulations..

As a rule, labor relations are characterized by: (a) a service provided personally; (b) salary, and (c) work schedule and other forms of subordination conditions.

If you hire employees under such conditions and are hence deemed an employer under Costa Rican regulations, you must consider the following:

Social Security registration and payment

To become an employer under Costa Rican law, it is necessary to register the Company as an employer at the Caja, the Costa Rica Social Security Fund (CCSS). According to Costa Rican law, the employer must contribute to the social security fund on behalf of its employees with a fixed percentage of the employees’ salary. The employee must also contribute a fixed percentage of his or her salary. Therefore, the company should register every employee before the CCSS.

While CCSS registration as an employer is a single event, each time a new employee is hired the updated payroll should be reported to the CCSS.

Payments of social security contributions for each employee and withholdings made by the employer should be deposited with the CCSS on a monthly basis. The company’s incorporation as an employer and the registration of its employees must be done within the first eight days after the hiring of employees.

Labor Risk Insurance Policy

In addition to registration before the CCSS, every employer should file a registration before the National Institute of Insurance (INS) to obtain insurance for all employees in order to protect them against labor-related risks. INS is a governmental institution and currently, the only entity offering such insurance.

For these purposes, the employer has to underwrite a policy from INS, starting at the beginning of operations and remaining in force during operations. To underwrite an occupational risk policy, the applicant has to apply at either the Central Office or a branch of the INS, a commercial Insurance Agency, or an authorized Insurance Agent. At the moment the policy is underwritten, the company will be automatically registered as an employer at the INS, and the employer has to remit to the INS on a monthly basis a status form indicating the names of the employees, days and hours worked, and the salaries paid. De-registration of employees should also be filed before INS as necessary.

Salary Income Tax Retentions

Under Costa Rican tax laws, employees are required to pay taxes on any income earned as a result of an employment contract. The employer is required to apply the appropriate withholdings on a monthly basis and report the taxes to the Tax Authorities. To calculate the withholding tax, a progressive tax rate schedule up to 25%, is applicable.

Generalities of Costa Rican labor system

The Costa Rican Labor Code (Código de Trabajo) is the legal reference for most labor regulations. According to the Code, “… an employer-employee relationship exists when there is an exchange of services for money and the employer exerts direction and control over the employee’s duties…”

Standard process to transfer or purchase titled property

In order to subdivide and purchase titled property in Costa Rica, the following steps should be followed:

Before purchasing property, it is highly recommended to perform title research to acquire all information regarding the current and legal status of the property. Due diligence should also consider the review of zoning regulations, environmental restrictions, utility availability, and general regulatory compliance.

Depending on the type of property and its location, the due diligence items may vary. It is common to enter into an Option to Purchase Agreement before executing a transfer deed to provide the buyer time to review the property to its satisfaction.

A common practice in Costa Rica is to acquire property through a new company. This instrument is especially useful if the buyer wishes to sell the property in the future using a share transfer, or if the property would be managed from outside Costa Rica.

If the property to be purchased is already owned by a company, it may be acquired by share purchase, provided that proper due diligence is conducted on the company.

Once the buyer has a clear view and understanding of the property status, the parties may execute a property transfer public deed. The transfer deed shall contain all of the stipulations regarding the transfer of real estate, including basic information on the property, the buyer, seller, the purchase price, and any other terms and conditions of the sale.

The transfer deed must be executed before a Costa Rica public notary and recorded before the Real Estate Department at the Public Registry. If the buyer elects to purchase the property through a share acquisition, the agreement may be executed in a private document.

Once Counsel executes and prepares the public deed, it will be filed immediately before the Public Registry.

As soon as the public deed is filed before the Public Registry for its annotation, the property will be protected against any third-party interest. Although the presentation of the public deed guarantees its priority, it does not automatically guarantee registration. The Public Registry must first approve the purchase agreement and verify that all legal requirements have been fulfilled and that the corresponding taxes and expenses have been duly paid.

Property transfer registration takes from five (5) to (10) working days.


All companies and individuals that want to open a bank account in a Costa Rican public or private bank must comply with certain requirements. The banks, at their sole discretion, can request documents and information that will serve as support to authorize the opening of bank accounts for their users.

However, it is common to request the following from the interested parties, which must be submitted for the bank to authorize the opening of the account:

  • For Costa Rican individuals, the original identification document, which must be valid and in good condition. This applies to the owner of the bank account and all the persons that will be included as authorized account signatories.
  • Original migratory identification document for foreigners known as the “DIMEX.”
  • Original identification document for diplomats (“DIDI”).
  • For non-resident foreigners, a valid passport that must have the entry stamp of the border´s authorities and, if applicable, the visa stamp.
  • For companies, an updated certificate of incumbency, a copy of the bylaws, notary certification attesting to the company´s ultimate beneficial owners, and in some cases, a certification from a licensed accountant regarding the company’s projected cash flow, must also be provided.
  • The “Know Your Customer” form.
  • Supporting documentation attesting to the source of funds of the account´s beneficiary.

At PredictaBill we constantly support our clients in their bank account opening process. In addition, we have communication with certain banking executives who will help make your account opening process faster and more efficient.


Once the company has been registered in the Public Registry and has permits to operate, it is advisable to take a few precautions to guarantee the protection of your business. These include:

Employment Agreements.
Service Agreement
Lease Agreement
Confidentiality Agreement

If you are ready to operate, implement, and execute the contracts described, please complete the following forms, so that PredictaBill´s team can immediately start drafting the agreements:

Service Agreement
Employment Agreement
Lease Agreement
Confidentiality Agreement

We are available at any time

Our team is standing by to help you find innovative legal solutions at a fixed cost for your business.

+506 2205 3900

[email protected]