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Costa Rica, country of Central America. Its capital is San José.
Of all the Central American countries. Throughout the 1970s and ’80s Costa Rica managed to stay relatively peaceful compared with its war-torn neighbours. It has one of the highest literacy rates (more than nine-tenths) in the Western Hemisphere and a solid educational system from the primary grades through the university level. Several renowned universities and an active network of bookstores and publishing houses tend to make San José the nucleus of intellectual life in Central America. Because of the country’s peaceful reputation and its commitment to human rights, several nongovernmental organizations and pro-democracy foundations have their headquarters in San José. Costa Rica is also known for its strong commitment to the environment and for protecting its numerous national parks. These factors, along with an established ecotourism industry, have attracted foreign investment, which shifted the country’s once agriculture-based economy to one dominated by services and technology by the late 20th century.
Extending from northwest to southeast, Costa Rica is bounded by Nicaragua to the north, by the Caribbean Sea along the 185-mile (300-km) northeastern coastline, by Panama to the southeast, and by the Pacific Ocean along the 630-mile (1,015-km) southwestern coastline. At the country’s narrowest point, the distance between the Pacific and the Caribbean is only about 75 miles (120 km).
Nearly four-fifths of Costa Rica’s population is of European descent, and, as a result, Costa Rica has the largest percentage of people of Spanish descent in Central America. The Valle Central, with more than half the country’s population, is the most predominantly Spanish region in both its manner of living and its ancestry. The next largest group consists of mestizos (people of mixed indigenous and European ancestry), who constitute close to one-fifth of the country’s inhabitants.
When you incorporate in Costa Rica you form a local company that can conduct all sorts of legal commercial activities in the country and offshore. You have the option of forming a new corporation or buying a ready-made shelf company or corporation.
The main advantage of forming a new corporation is that it has limited liability, which in very simple terms means that the inevitable risk involved in daily business transactions, will not affect your personal assets or assets owned by other companies that you control. Investor confidence is growing, with Costa Rica is fast becoming the Central American jurisdiction of choice for individuals and companies looking to set-up operations.
| Company type | Sociedad anónima (SA) / limited liability company (SRLs) |
| Governing corporate legislation | The mandatory rules are set out in the Commerce Code. |
| Shareholders | A minimum of two members are required to form a LLC. There are no shareholders or share certificates found with typical corporations. Stocks are called quotas and their Quota Certificates (if issued) are merely informative and do not represent the actual quota a member has in the SRL. The real record of member quotas is the Quota Holder Registry Book. All members are required to pay at least 25% of the capital subscribed contribution. Transferring quotas to third parties (outsiders) requires a Quota Assignment Agreement. However, before any quota transfer can occur, the other quota holders have the right of first refusal before the sale (transfer) can be completed. In other words, in order to sell or transfer quotas to outsiders, all of the other quota holders have the right to purchase them first. The acceptance of the sale or transfer must occur during a quota holder meeting which is recorded in the Quota Holder Assembly Log. |
| Directors | The LLC is governed by at least one manager who does not have to be a member (quota holder) and there is no limit on the number of managers. The manager is the judicial and extrajudicial representative or the LLC. However, if the manager does not reside in Costa Rica, then a local Registered Agent must be appointed to accept service of process and other official notices. |
| Information published relating to company officers | While the Public has access to public records online in Costa Rica’s National Registry, neither the LLC’s members( quota holders) or managers names are part of the public records. |
| Liability | LLC members’ liability is limited to their contributions. |
| Accounting requirement/ compliance | The LLC is required to maintain five types of legal books which include three accounting books and two administrative books. The accounting books are: (1) Balances, (2) Mayor, and (3) Diario (Daily). The administrative books are: (4) Quota Holders Assembly Book and (5) Assembly Book. In regards to record keeping of members, the LLC must maintain two types of records: (1) member meetings minutes and (2) registry of membership. |
| Corporate income tax | Costa Rica is a territorial tax country so all income earned outside its territory is not subject to corporate or income taxes. However, U.S. citizens and others from countries taxing global income must declare all income to their tax authorities. In regards to income earned inside its territory, Costa Rica considers LLC’s as a taxable corporation which must register with the government’s Tax Administration. Annual filings of tax declarations are required. However, if the income is less than $50,000 USD then the LLC will be classified as a small LLC only subject to a 10% tax rate. Those over $50,000 USD are taxed at a 30% rate. |
| Standard currency | Colón costarricense |
| Shared capital/paid up | There is no minimum investment amount or minimum share capital needed to constitute a company. However, customary practice is to provide at least CRC10,000 (around USD20). In SRLs, the share capital must be expressed in multiples of CRC100. |
| Basis of the Legal System | Costa Rica has a civil law system |
| Secretary | secretary not required |
| Shares | There are no restrictions on the transfer of shares in SAs. In SRLs, quotas are transferred through assignment agreements. However, other quota holders have a right of first refusal. |
| Registered address | A local office address is required for a LLC along with a local registered agent. |
| General meeting | Annual general LLC meetings are required within three months of the closing of every fiscal year. Meetings can be held in any country. |
| Electronic Signature | Permitted |
| Time to form | The incorporation process takes approximately five business days. |
| Renewal date | between January 1 and January 30 of each year. |
| Time Zone | GMT-6 |
| Confidentiality | High level |
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