Costa Rica


Costa-Rica was discovered in 1502 by Christopher Columbus during his fourth voyage to America. Originally these territories were inhabited by the Indians. Spanish colonization started in 1530. Lack of natural resources and climate of the country became the reason why it was mainly poor immigrants from Spain who inhabited Costa Rica. This caused growth of small and medium households in the country. Costa-Rica declared itself an independent state in 1821 and before long it founded the Federal Republic of Central America with Guatemala, Honduras, Nicaragua, and Salvador. In 1844 the first Constitution was adopted. In the following periods of the history of Costa-Rica several presidents came to power. In 2010 Laura Chinchilla won at the presidential elections and became the first woman president in the history of Costa-Rica.

Service packages

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Service item Express Standard Optimum
Company registration
Legal address per year
Secretarial services for the first year
Fees and duties for the first year
Apostilled bound set of incorporation documents
Compliance fee
Nominee service per year
Bank Account Pre-approval
Price

3 500 USD

6 500 USD

7 000 USD

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Core Services

3 500 USD

— Incorporation

including incorporation tax, state registry fee, including Compliance fee

Included

— Annual government fees

1 000 USD

— Corporate legal services

including registered address and registered agent, NOT including Compliance fee

110 USD

—Delivery of documents by courier mail

450 USD

— Apostilled set of Statutory documents

Optional services

3 000 USD

Nominee Director

Nominee Shareholder

Paid-up “nominee shareholder” set includes the following documents

Related services

Tax Certificate

Company’s tax residence certificate for access to double tax treaties network

Certificate of Good Standing

Document issued by a state agency in some countries (Registrar of companies) to confirm a current status of a body corporate. A company with such certificate is proved to be active and operating.

Certificate of Incumbency

Compliance fee

Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)

150 USD

Basic

simple company structure with only 1 physical person

50 USD

For legal entity in structure under GSL administration

additional compliance fee for legal entity in structure under GSL administration (per 1 entity)

100 USD

For legal entity in structure not under GSL administration

additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)

250 USD

For client with high risk Status

Cost of incorporation, including first year servicing 3500
Cost of nominee director services per year, including an apostilled set of documents 3000
Cost of annual service, starting from the second year 1000
Open account in 28693
Incorporation timescale for a turnkey company 2 weeks
Country 26705

General information shortly

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Total area Population Capital Unemployment Corruption perceptions index rank
51,100 sq. km 4 805 000 (2012) San Jose 7.8% (2012) 49
Location Central America
National currency Costa Rican colon
Conditional reduction of currency CRC
Against USD 0.002
Climate, average max and min t° Tropical and subtropical; dry season (December to April); rainy season (May to November); cooler in highlands; avg. maximum temperature (January) +33°; avg. minimum temperature (August) +23°
Time difference from Moscow - 10 hours
Dialing code +506
State language Spanish
Ethnic groups White 65.8%, mestizo 13.65%, mulatto 6,72%, Indian 2,4%, black 1,03%, Asian 0,21%, etc.
Literacy rate 88.3%
Credit rating BB
Government type democratic republic
Executive branch President and the Cabinet
Legislative branch unicameral Legislative Assembly (57 seats)
Judicial branch Supreme Court;appellate courts; district courts
GDP per capita rank 71 (2012)

Corporate info

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Shelf companies permitted Legal system Incorporation timescale for a turnkey company Cyrillic alphabet permitted in company name Local registered office
Yes based on Spanish Civil Law 2 weeks No Yes
Types of entity Stock Corporation (Sociedad Anónima); Limited Liability Company (Sociedad de Responsabilidad Limitada); Public Limited Company (Sociedad Anónima Abierta; S.A.A.); Limited Partnership (Sociedad en Comandita Simple); General Partnership (Sociedad en Nombre Colectivo).
Incorporation timescale for a new company 2-3 days
Company suffix Sociedad Anónima (S.A.)
Sensitive words “Bank”, “Finance”, “Building Society”, “Chamber of Commerce”, “Chartered”, “Cooperative”, “Imperial”, “Insurance”, “Municipal”, “Royal”, ‘Trust Company”, “Trustee Company” or related words
Local registered agent Yes
Information to be kept at the registered office copy of the entire charter of incorporation, register of directors, powers of attorney and legal representation, capital stock of the company
Seal required, type of seal not required
Redomiciliation (to, from) permitted permitted

Director and secretary

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Minimum number of directors Residency requirements for directors Corporate directors permitted Disclosure to local agent Disclosure to public
3 (President, Secretary and Treasurer) No No No No
Directors’ meetings/frequency/location Yes / according to articles
Company secretary required Yes
Residency requirements for a secretary No
Qualified secretary required No
Corporate secretary permitted No

Shareholder and beneficiary

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Minimum number of shareholders Residency requirements for shareholders Corporate shareholder permitted Disclosure to local agent Disclosure to public
2 No Yes No No
Meetings/frequency/location Yes / annually / no requirements
Beneficiary info disclosure to No

Shares and share capital

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Minimum authorized share capital Minimum issued share capital Minimum paid share capital Authorized capital payment deadlines Bearer shares permitted
No requirements No requirements 25% No requirements No
Issued capital payment deadlines Upon incorporation
Standard currency CRC
Standard authorized share capital 50500
Standard par value of shares 1
Shares with no par value permitted No

Taxes

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Min. rate for corporate tax Capital gains tax VAT Withholding tax Exchange control
30% 15% 13% 15%/15%/25% No
Personal tax 0-25%
Corporate tax (in detail) Income tax is levied at the rate of 30%. However, for companies with gross income up to CRC 109.337.000, a progressive taxation scale is established from 5% to 20%.
Capital gains tax. Details Tax on gains from the sale of assets is levied at the rate of 15%.
VAT. Details The standard VAT rate is 13%. Reduced rates of 4%, 2% and 1% apply to some goods and services.
Other taxes Social contributions, Property taxes, Real estate tax
Stamp duty 5 CRC for every thousand of the contract value in relation to various transactions

Accounts

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Requirement to file accounts Publicly accessible accounts Audit required Requirement to file Annual Return Publicly accessible Annual Return
No No No No if the company has no activity in Costa-Rica No
Requirement to prepare accounts No
Double tax treaties network 3
Tax Exchange Information Agreement network 21
OECD member No
Offshore/onshore status according to the RF laws No

GENERAL INFORMATION

General info

Republic of Costa Rica is a country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west, and the Caribbean Sea to the east.
Total area of Costa Rica is 51.100 sq.km. Population of Costa Rica is 4 805 million people (2012). It includes the following ethnic groups: 65.8% – white, 13.65% - mestizo, 6,72% — mulatto, 2,4% — Indian, 1,03% — black, 0,21% — Asian, etc.
The capital of Costa Rica is San Jose.
The official language of Costa Rica is Spanish.
The national currency is Costa Rican Colon (CRC) which equals approximately 0.002 USD.
The climate of Costa Rica is tropical and subtropical; dry season (December to April); rainy season (May to November). The average maximum temperature in January is +33°C; average minimum temperature in August is +23°C.
Time difference with Moscow is +10 hours.
Literacy rate is 88.3%.
Calling code of Costa Rica is +506.

History

Costa-Rica was discovered in 1502 by Christopher Columbus during his fourth voyage to America. Originally these territories were inhabited by the Indians.
Spanish colonization started in 1530. Lack of natural resources and climate of the country became the reason why it was mainly poor immigrants from Spain who inhabited Costa Rica. This caused growth of small and medium households in the country.
Costa-Rica declared itself an independent state in 1821 and before long it founded the Federal Republic of Central America with Guatemala, Honduras, Nicaragua, and Salvador. In 1844 the first Constitution was adopted. In the following periods of the history of Costa-Rica several presidents came to power. In 2010 Laura Chinchilla won at the presidential elections and became the first woman president in the history of Costa-Rica.

Government Type

By government type Costa Rica is a democratic republic.
The Head of State and the Head of Government in Costa Rica is a President.
Executive power is the Cabinet selected by the President.
Legislative power belongs to the unicameral Legislative Assembly which 57 seats. The members of Parliament are elected by direct, popular vote to serve four-year terms.
Judiciary power include the Supreme Court where 22 judges are elected for renewable eight-year terms by the Legislative Assembly; appellate courts and district courts.

Economy

Prior to the global economic crisis, Costa Rica enjoyed stable economic growth. The economy contracted 1.3% in 2009 but resumed growth at about 4% per year in 2010-11. While the traditional agricultural exports of bananas, coffee, sugar, and beef are still the backbone of commodity export trade, a variety of industrial and specialized agricultural products have broadened export trade in recent years. Tourism continues to bring in foreign exchange, as Costa Rica's impressive biodiversity makes it a key destination for ecotourism.
Foreign investors remain attracted by the country's political stability and relatively high education levels, as well as the incentives offered in the free-trade zones; and Costa Rica has attracted one of the highest levels of foreign direct investment per capita in Latin America.
Unlike the rest of Central America, Costa Rica is not highly dependent on remittances as they only represent about 2% of GDP. According to GDP rating, Costa Rica ranks 71st, unemployment rate is 7.8% (2012).

CORPORATE INFORMATION

Legal system

The laws of Costa Rica belong to civil law with some Latin American elements. Originally Costa Rican laws are based on Spanish law. Constitutional law follows the model of the US, civil and criminal laws are influenced by French law.
The principle law sources in Costa Rica: Constitution, acts and statutes, Parliament laws and resolutions, President decrees, subordinate legislation of other government authorities. Corporate law is based on Commercial Code, Law No.3284.

Types of entity

Under Thai legislation, the following types of commercial entities may be established in Costa Rica to carry on business:
  • Stock Corporation (Sociedad Anónima);
  • Limited Liability Company (Sociedad de Responsabilidad Limitada);
  • Public Limited Company (Sociedad Anónima Abierta; S.A.A.);
  • Limited Partnership (Sociedad en Comandita Simple);
  • General Partnership (Sociedad en Nombre Colectivo).

The Stock Corporation (Sociedad Anónima) has been the most commonly used structure by foreigners.

Company name

According to Costa Rican law, there are following requirements to the company name:
  • it is not allowed to use such words as "Bank", "Finance" “Building Society”, “Chamber of Commerce”, “Chartered”, “Cooperative”, “Imperial”, “Insurance”, “Municipal”, “Royal”, ‘Trust Company”, “Trustee Company” or related words unless it would be previously approved by the Central Bank of Costa-Rica and the Superintendence of Banks;
  • Cyrillic alphabet is not permitted in company name;
  • Standard languages are English and Spanish;
  • it should not be identical or similar to the existing names;
  • may contain such words as “Corporation”, “Incorporated”, “Ltd”, “Corp”, “Inc”;
  • must have a company suffix: for Stock Corporation - Sociedad Anónima or S.A.

Besides, companies can also be registered by number, in which case the name would not have to be verified.

Registration

There are 9 main steps to setting up a stock corporation in Costa Rica as follows:
  1. Check the availability of the proposed company name (1 day): the company name can be verified online (https://www.rnpdigital.com) free of cost. In addition, the company can request a name certificate for a cost of CRC 250 at the registry.
  2. A notary public drafts and notarizes public deeds of the incorporation charter for registration before the Mercantile Section of the Public Registry online http://www.crearempresa.go.cr (1 day).
  3. Deposit capital in the bank account, pay registration fees and stamp duties (1 day).
  4. Register the incorporation charter in the mercantile section of the public registry and obtain authorization to legalize the company books; send the notice of constitution of the company (edicto): Since February 2012, all incorporation documents can be submitted electronically.
  5. File Form D-140 with the before the Tax Department to register the firm as a taxpayer online (2 days).
  6. Register for labor risk insurance with the National Insurance Institute (Instituto Nacional de Seguros) – 1 day.
  7. Apply for sanitary permit (1 day).
  8. Register the company as an employer with Caja Costarricense de Seguro Social (CCSS, Social Security Institution) -1 day: after submitting the documents required, the CCSS issues a registration form (inscripción ante CCSS de persona jurídica) that allows the company to start operations. Within 15 days after registration with the CNSS, the company will receive an ex-post inspection from an officer, which consists on a simple verification of the information provided by the company about the business activity and the employees.
  9. Apply for the business license (patente municipale) from the municipality (15 days).

Local registered office

It is required to have the local registered office. Copy of the entire charter of incorporation, register of directors, powers of attorney and legal representation, capital stock of the company must be kept at the registered office.

Local registered agent

It is required to have a local registered agent if none of the directors have a permanent domicile in Costa Rica.

Seal

There are no requirements for the Companies of Costa Rica to have a seal.

Redomicile

The redomiciliation of companies either to or from Costa Rica is permitted. Article 227 of the Commercial Code of Costa Rica establishes that companies from countries where legislation allows them to transfer their domicile to another country, and which have been authorized by a resolution adopted at a General Stockholders’ Meeting to do so, may transfer their domicile to Costa Rica by a prior registration in the Costa Rican Registry of the documents specified therein. Laws which neither explicitly permit nor explicitly prohibit such transfers are deemed to allow them.

COMPANY STRUCTURE

Directors

Costa Rican legislation has established that the members of the Board of Directors are also the officers of the company. Thus, the Chairman of the Board, known in Costa Rica as the President of the Board, is also the Chief Executive Officer of the company. The law requires that the Board of Directors have a minimum of three members for the offices of President, Secretary and Treasurer, but there is no maximum number limit, so additional members can be appointed with other denominations or simply as Directors.
The term for which said Directors are appointed must be indicated in their appointment resolution and can be for the period of existence of the company.
The members of the Board of Directors can be either nationals or foreigners, corporate or natural person.
The information about directors and officials is disclosed on the Mercantile Registry of the National Registry.
The Board of Directors’ Meetings may be held outside of Costa Rica, provided that the cities where such meetings will be held are previously indicated in the incorporation charter. Board members must attend meetings personally and cannot delegate their powers on other Board members.

Secretary

Company secretary is required but there are no special requirements for secretary's residency, and qualification. Corporate secretaries are not permitted.

Shareholders

The minimum number of share holders in Costa Rica companies is two, which can be either a person or a company, a resident or non-resident. Corporate shareholders are permissible. After formation, the corporation may have any number of shareholders. It is important that there are no publicly accessible records of Shareholders.
The law requires only one annual shareholders’ meeting at the social domicile, but the shareholders may hold as many as they wish. In the first case, it is an Ordinary Shareholders’ Meeting that must be held between October first and December thirty-first each year. Annual shareholders’ meetings may be held in Costa Rica or else in any other jurisdiction of which the shareholders duly approve. In the latter case, the name of the city or cities where such meetings will take place must be indicated in the incorporation charter before such meeting can be held there. The meeting can be held by the legal agents of the corporation in Costa Rica via a proxy letter.

Statutory Auditor

The shareholders must appoint a Statutory Auditor who supervises the activities of the Board of Directors and reports to the shareholders. The Statutory Auditor is not a member of the Board nor can he be linked by family ties with any of its members. As in the case of Directors, there is no specific requirement that the Statutory Auditor be a national of Costa Rica.

Beneficiary

It is important fact that there are no publicly accessible records of beneficiary in Costa Rica. The right of confidentiality is recognized in the legal system by both the Commercial and Criminal Codes, as well as by the Organic Law of the National Banking System.

Share capital and shares

Corporations have no minimum capital requirements, but at least 25% of the subscribed capital must be paid in full upon formation. The capital of the company can be expressed in any currency. It is normal to use a capital equivalent to US$100.00 (One hundred U.S. Dollars).
Shares of no par value and bearer shares are not allowed.

TAXATION

Personal Taxes

Personal income tax is payable on income from the activities performed in Costa Rica and from Costa Rican sources.
The tax scale is progressive. For employment income, the rates are:
  • Income below CRC (Costa Rican colon) 842,000 – 0%
  • from CRC 842,000 to 1,236,000 – 10%
  • from CRC 1,236,000 to 2,169,000 – 15%
  • from CRC 2,169,000 to 4.337,000 – 20%
  • over CRC 4,337,000 – 25%

There is a different tax scale for the income of self-employed individuals.
Gains from the sale of assets, interest and rental income are generally taxed at the rate of 15%.

Corporate Income Tax

The territorial principle of taxation applies: tax is charged on profits generated in Costa Rica and from sources in Costa Rica.
Corporate income tax rate is 30%.
However, companies with gross income of up to CRC 109.337.000 are taxed at the following progressive rates:
  • Gross income up to CRC 5,157,000 – 5%
  • from CRC 5,157,000 to 7,737,000 – 10%
  • from CRC 7,737,000 to 10,315,000 – 15%
  • from CRC 10,315,000 to 109,337,000 – 20%

There are also corporate income taxes levied by municipalities.
Dividends, interest and royalties are taxed at the rate of 15%.

Capital Gains Tax

Gains from the sale of assets are taxed at the rate of 15%.

CFC Rules

None.

Withholding Tax

Dividend and, in general, interest payments are subject to withholding tax at the rate of 15%, royalties – at the rate of 25%.
Withholding tax may also be levied on other payments.

VAT

The standard VAT rate is 13%.
The reduced rates of 4%, 2% and 1% apply to some goods and services.

Social Security Contributions

Social security contributions are paid by the employee at the rate of 10.5% and by the employer at the rate of 26.33% of the employment income.

Property Tax

Property tax is levied at the rate of 0.25% on the appraised value determined by the municipal authorities.
An additional “solidarity” tax is levied on luxury residential properties.

Real Estate Transfer Tax

Real estate tax is levied at the rate of 1.5% of the selling price or of the assessed tax value of the property, whichever is higher.
The tax is also levied on the sale of real estate company shares.

Stamp Duty

Stamp duty can be levied as CRC 5 for every CRC 1,000 of the contract value in relation to various transactions.

Exchange Control

There is generally no restriction on foreign exchange transactions.
There are rules for currency exchange and registration of capital imported for investment, to ensure its subsequent unhindered repatriation.

Double Tax Agreements

Costa Rica has tax treaty with 25 jurisdictions.
3 DTCs: Germany, Mexico, Spain.
21 TIEAs: Argentina, Australia, Canada, Denmark, Ecuador, El Salvador, Faroe Islands, Finland, France, Greenland, Guatemala, Guernsey, Honduras, Iceland, Italy, Netherlands, Nicaragua, Norway, South Africa, St Maarten, Sweden, USA.

ACCOUNTS

Accounting books

According to Cost Rican law, all Costa Rican corporations, regardless of whether they do business in Costa Rica or not, must keep registered accountancy books.

Financial statements

Costa Rican companies are not obliged to file financial statements.

Annual Return

Generally speaking, Annual Return is a short review on the current state of the company, which is prepared by the company secretary annually. As a rule it includes the following information:
  • Incorporation information (registration date, registered address);
  • Information about directors and their resignation;
  • Information about secretaries and their resignation;
  • Information about registered capital, nominal value of shares and amount of issued shares;
  • Information about shareholders and share transfer.

In Costa Rica companies are not obliged to prepare or file Annual Return, if the company is not operating. The company must be registered before the tax authorites as non active in order for this to be waved.

Tax return

Tax Returns

The tax year normally coincides with the calendar year.
Corporate income tax returns are filed within 2.5 months of the end of the tax year.
Three advance payments are due during the year, with the final payment due within 2.5 months of the tax year-end

International law relations

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Party to the Hague Convention (Apostille) Legal system Double tax treaties network OECD member Offshore/onshore status according to the RF laws
Yes based on Spanish Civil Law 3 No No

Public authorities and legal acts

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List of laws and regulations
Act name Scope of law
Commercial Code (Codigo de Comercio) commercial activity
Free Zone Regime Law (Ley de Zonas Francas) free export zones
Competition and Consumer Protection Law (Ley de Promocion de Competencia y Defensa del Consumidor) competition and consumer rights
Labour Code (Codigo de Trabajo) labour relations
Tax Code (Codigo Fiscal) taxation
Tax Norms and Procedure Code (Codigo de Normas y Procedimientos Tributarios) https://ministeriopublico.poder-judicial.go.cr/normativa/nacional/03-delitos%20economicos/10.pdf
Sales Tax Law (Ley del Impuesto General sobre las Ventas) sales tax
Income Tax Law (Ley del Impuesto sobre la Renta) income tax
Real Property Tax Law (Ley de Impuesto de Bienes Inmuebles) real property tax
General Customs Law (General de Aduanas) customs
Regulatory Law for the Stock Market (Ley Regulatora del Mercado de Valores) stock market
Tax treaties entered Germany, Mexico, Spain
Tax Exchange Information Agreement (TEIA) Argentina, Australia, Canada, Denmark, Ecuador, El Salvador, Faroe Islands, Finland, France, Greenland, Guatemala, Guernsey, Honduras, Iceland, Italy, Netherlands, Nicaragua, Norway, South Africa, St Maarten, Sweden, USA
List of state regulatory authorities
National Register http://www.registronacional.go.cr
Commission for the Promotion of Competition http://www.coprocom.go.cr
Central Bank of Costa Rica http://www.bccr.fi.cr
Ministry of Justice http://www.mjp.go.cr
Judicial Authorities of Costa Rica http://www.poder-judicial.go.cr
Ministry of Finance https://www.hacienda.go.cr/

    Юридический партнер обзора:

    GLA GROUP

    THE GLA GROUP (Global Legal Advisors, Global Trust Firm, Global Escrow Services and GTF Trust Services) offers escrow and trust services in Costa Rica, Malta, Andorra and specializes in Civil and Corporate Law with emphasis in foreign investment transactions, Trust and Escrow Services, Litigation (Civil and Criminal), Real Estate Operations, corporate and real estate due diligence, intellectual property (Trademarks & Patents), Notary Services, Translations (English Spanish).

    Company Formation in Costa Rica

    Consultants

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    Aniko Sebok

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    Regards, GSL Law & Consulting Lawyer, Head of UK GSL office Aniko Sebok

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    Valerija Filipova

    GSL Law & Consulting Lawyer, London Office

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    Regards, GSL Law & Consulting Lawyer, London Office Valerija Filipova

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