Costa Rica

The Republic of Costa Rica is one of the smallest states in Central America. Located at the narrowest part of the Isthmus connecting the two continents. Costa Rica shares borders with two countries, Nicaragua to the north and the Republic of Panama to the south-east.
According to a report by the World Economic Forum, Costa Rica ranks in the top 40 (out of 132) of the world's leading economies, ranking first in Latin America. The economic, political and social stability of the state is recognised by the international community.

The state has guaranteed absolute inviolability of property for several centuries. There are also no wars, revolutions and major disruptions in the country.
Costa Rica was the first state in Latin America to adopt a democratic system. The country has a Spanish legal system (based on Roman law), an open economy state with a free trade agreement with the United States of America, etc.

6 simple steps to purchase a company

  1. choosing a country

  2. choosing a bank

  3. payment (by any method)

  4. sending documents

  5. company registration

  6. bank account opening

Main advantages

The region is used by major entrepreneurs, owners of insurance companies and banking structures to do business without having to pay mandatory taxes. Low taxation, the possibility of obtaining tax exemptions: a favourable environment for production development. The key advantages of registering a company in Costa Rica should be considered:

  1. A company in Costa Rica can be established 100% by non-residents. There is no requirement under Costa Rican law that a Costa Rican resident must participate in the structure of companies established in Costa Rica.
  2. Costa Rica has a territorial principle of taxation, which means that you only have to pay taxes on income earned in Costa Rica.
  3. Costa Rica is a State party to the HCCH 1961 Apostille Convention; therefore, the apostilling of documents is also allowed. It takes an average of 5 days to apostille documents in Costa Rica.
  4. Shareholders shall not appear in public reports. The government does not impose accounting or reporting requirements on local companies.

Type of legal entity:

According to current Costa Rican legislation, the incorporation of such companies is available to foreign persons:

Limited Liability Company (Sociedad de Responsabilidad Limitada; Sociedad Limitada, SRL)

The company's members are liable for the company's obligations only to the extent of their contribution to the company's share capital. There are restrictions on the number of participants. This is considered to be the most popular form for company registration in Costa Rica.

Non-public joint-stock company (Sociedad Anónima, SA)

The company's shareholders contribute share capital, to the extent of which each shareholder is liable for the company's obligations. There are restrictions on the number of shareholders, as well as on the free circulation of shares on the market.

The company must have at least two shareholders at the time of registration. Following registration, it can have any number of shareholders with no citizenship restrictions.

The liability of shareholders is limited to the amount of their capital contribution.

The board of directors manages the company and must consist of at least three members (president, secretary and treasurer) and an auditor. If the legal representatives do not reside in Costa Rica, the company must appoint a legal representative to receive notifications on behalf of the company as its resident agent. There are no restrictions regarding the nationality of directors or shareholders.

Public limited company (Sociedad Anónima Abierta, SAA)

There is no limit to the number of shareholders in this type of company. There are no restrictions regarding the circulation of shares on the stock market.

General partnership (Sociedad en Nombre Colectivo)

A general partnership involves at least two partners who jointly carry out activities for profit. The rights and obligations of partners are governed by the Partnership Agreement. Partners in the general partnership are personally liable for the debts and other obligations of the partnership. general partnership are personally liable for the debts and other obligations of the partnership.

Limited Liability Partnership (Collectivo Sociedad en Comandita Simple; Sociedad Comandita)

In a limited liability partnership, there are two types of partners: general partners, who are personally responsible for the obligations of the partnership, and limited partners, whose liability is limited to the amount of their contribution agreed in the Partnership Agreement.

Legal Entity Features:

The specific details of the incorporation procedure are as follows:

  1. The mandatory rules are set out in the Commercial Code.
  2. The registration of the company shall take place in the National Register following the confirmation of compliance with the legal requirements.
  3. The registration process takes approximately five working days.
  4. All legal persons established in Costa Rica are required to have a registered office in Costa Rica.
  5. Any company must have at least two shareholders at the time of registration. Once registered, there are no restrictions on the number of shareholders or their nationality. Sole shareholders are permitted under Costa Rican law.

Taxation Features

For tax purposes in Costa Rica, the determining criterion is not the residence of the tax subject, but the place where the income is earned. Income in Costa Rica is taxed on a territorial basis, which means that any income earned outside Costa Rica is exempt from tax.

Only profits made on the territory of Costa Rica are taxed.

The standard income tax rate in Costa Rica is 30%.

There are also reduced tax rates: 20% and 10%, depending on the amount of profit.

The standard capital gains tax rate in Costa Rica is 15%.

VAT (Impuesto de Valor Agregado -IVA) was introduced in July 2019. The standard VAT rate in Costa Rica is 13%. The standard rate of 13% applies to most goods and services in Costa Rica. In addition to the standard VAT rate, there are also three reduced rates, namely 4% (health services, airfare), 2% (private educational services, medicines) and 1% (household goods).

The tax on royalties is 25%.

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