Costa Rica is a Central American country influenced by European civil law. Thanks to the gambling license it offers a great opportunity for startups and small businesses. Costa Rica is recognized worldwide for its commitment to international standards and is a member of the OECD, although it does not have an official gambling regulation system. The country is not on the FATF (Financial Action Task Force) list, as it has strategic shortcomings in the field of anti-money laundering, clearly positioning itself as a reliable base for the gambling business. Those who receive a gambling license Costa Rica will receive a guarantee of compliance with high business standards. The FATF reported that the jurisdiction meets the requirements and continues to make significant progress in solving related technical compliance issues, etc. Doing business in Costa Rica will help to win the trust of players from different parts of the world, which is a sure thing.
Compliance and Regulations
The gambling industry in Costa Rica has no clear regulatory body, with local municipalities ensuring compliance with the country’s legislation. If operators are focused on the international market and avoid transactions with Costa Rican banks and residents, they can work in online gambling. In addition, entrepreneurs who have obtained a Costa Rica gambling license must strictly comply with the rules listed below:
- National Anti-Money Laundering Regulations
- Unusual Transactions Act
- Counter-Terrorism Financing Regulations
- Know-Your-Customer (KYC) Policies
- The Criminal Code
- The Code of Commerce
Benefits of Holding Costa Rica Gambling Licenses
With a stable economy and low crime rate, Costa Rica is confidently proving to be an ideal place for gambling businesses, as it is important for everyone to feel safe and stable in their working environment. It is equally important that the jurisdiction is not offshore, which adds more opportunities, such as partnerships with American and other international companies. Here are a number of such advantages:
- The absence of direct government regulation in gambling allows businesses to experiment and adapt their models without heavy regulatory burdens.
- No gambling taxes and favorable conditions for income generated outside Costa Rica. Dividends are taxed at source, with agreements to prevent double taxation with several countries.
- Permission to use cryptocurrencies like Bitcoin and Ethereum, enabling the operation of crypto casinos.
- Minimal requirements for testing gambling software and due diligence, streamlining the process of setting up and operating a gambling company.
Data Processing License
To successfully launch a gambling business in Costa Rica, you must obtain a data processing license from the local authorities. This way, you will confirm the company’s data management capabilities. The license is primarily required to place servers and provide various services in online gambling without interruption.
License holders can opt for:
- A Permanent lease is required for ongoing operations, requiring annual payments.
- A Temporary lease is a short-term option for six months to get online casino license in Costa Rica.
Obtaining Gambling Licenses in Costa Rica and Gibraltar
Companies with Costa Rica online gambling licenses must comply with general business laws. This is due to the fact that there is no special regulation of this industry. It is worth adding that they must undergo audits and comply with the country’s anti-money laundering and counter-terrorist financing (AML/CFT) legislation. For successful business operations, it is also necessary to keep detailed records and transaction logs in Spanish and allow audits of their gaming systems.
Gibraltar, in turn, has a strict approach where applicants must demonstrate financial solvency and experience in the industry. Of course, it is necessary to comply with the rules of anti-money laundering and countering the financing of terrorism (AML/CFT). Gambling products must undergo independent testing and provide an extensive list of documentation. One way or another, in both cases, you need to prove the operational readiness of your business.
Data Processing License Essentials
For obtaining a gambling license in Costa Rica through a Data Processing License, the following steps are essential:
Company Formation: Initiate by establishing a company in Costa Rica. Ensure you’re not a citizen of Costa Rica or any country with restrictions on online casinos.
Target Market: Clearly state during incorporation that your company aims to offer gambling services internationally, not within Costa Rica or other prohibited regions. Implement IP blocking to enforce this.
Local Infrastructure: Host your casino site’s server and data in Costa Rica and set up a registered local office. The choice of office location will determine the municipality for your Data Processing License application, acknowledging that requirements may vary locally.
Compliance Consultation: For tailored guidance on selecting the most suitable municipality and ensuring full compliance, consider seeking a professional consultation.
Essential Compliance for License Holders
Entities with a gaming license in Costa Rica must align with the nation’s broad business regulations, ensuring adherence to both local and international standards:
AML/CFT Compliance:
- Mandatory adherence to national Anti-Money Laundering and Counter Financing of Terrorism legislation.
- Maintenance of detailed client records, monitoring for suspicious activities, and implementation of Know-Your-Client (KYC) policies, aligning with OECD nation standards.
Financial Documentation:
- Requirement to maintain meticulous accounting records in Spanish, as mandated by the Commercial Code.
- Documentation includes ledgers, journals, inventories, and records of shareholder meetings and registrations.
Audit Trails:
- Maintenance of a comprehensive audit trail for each player’s transactions and bets.
- Gaming system logs must be accessible for external audits.
- Local authorities must have access to game rules, outcomes, and payout records for five years.
Formation of a Gambling Company
Business Structure and Incorporation
- Choose from legal entities like Corporations or Limited Liability Companies.
- Anticipate a 2-3 week process for setting up.
- Navigating Payment and Banking
- Understand the limitations due to the absence of a gambling regulatory framework.
- Consider crypto-based operations as a strategic alternative due to potential banking restrictions.
Company Formation Essentials
- Appoint a qualified legal representative or local registration agent.
- Secure at least two shareholders for your company.
- Set up a local office as part of your operational base.
- Benefit from a cost-effective and streamlined company formation process.
Legal Documentation and Compliance
- Ready and notarize foundational documents like Articles of Incorporation and powers of attorney in Spanish.
- Ensure compliance with local regulations and standards.
Registration and Operational Compliance
- Secure and reserve your company name.
- Gather and prepare all necessary documentation.
- Open a foreign trading account and handle company formation fees.
- Conduct thorough due diligence checks.
- Engage with the Costa Rican Registry of Legal Entities for company registration.
- Register with tax authorities and the social security agency.
- Fulfill national insurance and occupation risk insurance requirements.
- Maintain detailed information in the Ultimate Beneficial Owner (UBO) Declaration.
- Ensure agreements outline legal representation, company objectives, and legal compliance.
Advantages of Creating a Crypto Casino in Costa Rica
If you decide to launch a crypto casino in this country, you will have access to a growing market of online cryptocurrency gambling. Below are the main advantages:
- Interaction with the audience around the world.
- Safe and profitable transactions with cryptocurrency.
- A wide range of games will attract players with different preferences.
FAQ
Can a citizen of another country own a gambling company?
Due to the relatively liberal business ownership legislation in Costa Rica, companies can be owned by non-residents.
What taxes do companies with a gambling license have to pay?
First of all, since there is no special licensing system for opening an online casino in Costa Rica, the variation of tax consequences will depend on the nature of the business. Companies do not have to pay income taxes. To ensure fair taxation of dividends, interest, and other services, Costa Rica has double taxation treaties with countries such as Spain, Germany, and Mexico.
Are companies in Costa Rica subject to audit?
Regulation and audit of gambling companies may differ slightly, as there is no official gambling licensing structure in Costa Rica. It is worth considering that additional requirements to the business may apply.
What difficulties can a gambling license holder face in Costa Rica?
The absence of a dedicated regulatory structure entails companies facing various legal and functional hurdles while setting up and running a gambling enterprise in Costa Rica.
