Business Formation in
Costa Rica
Handling all of your business matters in Costa Rica. As a foreign business owner/entrepreneur, there is no doubt that legal issues will arise that require the guidance from a skilled legal professional. We help with buying, selling, and helping manage your ongoing legal enterprise.
Business Ownership
Unlike most countries, foreigners in Costa Rica do not need to be a resident of the country in order to own a local buisness. In most cases, only a tourist visa is required. However, foreigners are barred from working locally within their own business. This is a complex relationship, but one that can be understood with correct legal assistance.
Business Types
For most clients, the SA or "Socio Anonima" and the "Sociedades de Responsabilidad Limitada" or “Limitada” or “Ltda.” are the types of corporations we reccomend creating. These two options are very similar to an LLC in western countries where owner's assets are not directly liable. There are also Sole Proprietorship Companies, also known as “One Man Companies”; Partnerships; and Collective Name Companies. All of which are governed by the Costa Rican Code of Commerce.
Required Partnership
Formation of any commercial company must be done by at least two persons. This requirements applies to both foreign and national citizens.
Resident Agent
Every corporation in Costa Rica must have a legal representative based within the Costa Rican territory, named in the Articles of Incorporation. The duties of the Resisdent Agent are passive and deal with legal matters addressed to the company. This is only required if the Corporate representative is domiciled outside of Costa Rica.
Local Investment
A foreigner can apply for an Investor Residency if they invest USD $200,000 or more in a local business. If the investment is in an industry of tourism, reforestation or a state-sponsored area, the minimum investment can be lowered.
Corporate Taxes
Corporate taxes in Costa Rica are required to be paid annually, depending on the corporation's income. This is an increasing scale, costing no more than USD $375 or 213k colones for major businesses.
Income Taxes
Both residents and non-residents of Costa Rica are taxed only on their income made from a Costa Rican source. This also applies to corporations registered within Costa Rica.
Reserve Fund
Costa Rica requires corporations to maintain a separate reserve legal fund called "Fondo de Reserva Legal". For local companies, the Commercial Code of Costa Rica requires that 5% of the corporation’s annual profits go in this fund. This is a temporary requirement. Once the allotted reserve funds reach the equivalent of 20% of the corporation’s declared value, the requirement is removed.
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