Creating a business in Costa Rica is quite popular among entrepreneurs. A limited number of agreements on the exchange of information protects business data and the revenues coming from outside the country are not subject to taxation (they are charged only from internal operations). This makes offshore companies in Costa Rica an excellent tool for international tax optimization. In addition, by investing in local businesses of more than USD 200 000 it is possible to get a residence permit there. The country is quite loyal to foreign investors – the offshore zone in Costa Rica is very attractive. If this area interests you. it is possible to become present in this country in one of the next forms.
Major Forms of Legal and Business Presence
If you wish to incorporate a company in Costa Rica, there are several most common forms in which an entity can exist:
- Limited Liability Company (Sociedad de Responsabilidad Limitada) – an enterprise where should be at least 2 members who don’t bear any liability in excess of the amounts contributed to such an enterprise. The amount of chartered capital is not legally determined but it shall be sufficient for the target types of activities. Share transfers (called quotas) are made subject to the consent of other partners and subject to certain conditions.
- Corporation (Sociedad Anonima) its registration will require at least 2 founders (individuals or legal entities), as well as the authorized capital in any currency and in any amount (but practically such should correspond to the types of activities that an enterprise is going to conduct). A quarter of it shall be paid at the time of the establishment of a company. Shares can be transferred without any restrictions and offered to the public. Also, the registered agents are required to communicate with the supervisory authorities of the country – they must be residents. A board of three directors should manage the company’s daily affairs.
Registration Requirements and Steps
Company formation in Costa Rica requires passing these registration steps:
- Defining the suitable business structure and goals you are going to realize through a local entity.
- Collecting details about founders, beneficiaries, and managers of a future legal entity.
- Arranging the registered business address for an entity.
- Depositing the amount of chartered capital for an enterprise (at least 25%).
- Drafting and formalizing statutory and registration documents.
- Submitting all required documents for the registration.
- Registration for tax, social security, and insurance purposes.
- Applying for and getting licenses and special permits.
Legal and Regulatory Framework
The legal system is Spanish, based on Roman Law. Local legal framework may be considered as advantageous in general. For certain industries, founding a business and operating it may be associated with bureaucratic formalities.
In general, opening a business in the country will require from USD 50 to 100 000, depending on the conditions and characteristics of the particular scheme. It is possible to buy offshore in Costa Rica, in one of the twelve zones. It is necessary to submit annual reports to the regulatory authorities, but there must be pointed only the areas of activity within the country. All companies must have a registered address and bank account.
Tax System of Costa Rica
An option of company incorporation in Costa Rica should be considered along with these tax highlights:
- Corporate income tax rate – 30%
- Personal income tax rate – 25%
- Value-added tax rate – 13%
- Withholding tax (for non-residents) rates – (i) dividends – 15%, (ii) interests –5.5/15%, (iii) royalties – 25%
- Capital gains tax (for non-residents) rates (both corporate and personal) – (i) basic – 15%, (ii) lowered (subject to certain conditions) – 2.25%
Advantages of the Jurisdiction
Company formation in Costa Rica may be advantageous in view of the following benefits this jurisdiction offers:
- one of the most developed Latin countries with high life standards
- educated and skilled local professionals
- developed infrastructure
- ease of starting a business
- high level of property protection
- advantageous tax system
How Prifinance Specialists May Help You
Prifinance provides all kinds of services for the registration and maintenance of business in the country. Our customers will not have to be distracted from the core business – we will take care of all the routine questions and delays, will perform the work efficiently, promptly, and within the legal framework, given the specificity of the Costa Rican legislation.
We offer prompt company registration and bank account opening services in Costa Rica and worldwide. New registration and ready-made options. Provide extensive details for more precise consultations and suggestions that can be effective for your future project.