COSTA RICA COMPANY FORMATION

Costa Rica Company Formation Guide

[Structure]

Corporation

Companies in Costa Rica can be established as a corporation (Sociedad Anonima, S.A.) or a limited liability company (Sociedad de Responsabilidad Limitada, SRL).
A corporation is a general company limited by shares.
Ownership is divided into shares that can be freely transferred.
There is no minimum share capital requirement, except for the issuance of at least two shares at the time of incorporation.
The share capital may be denominated in any currency.
The minimum number of shareholders required to incorporate a company is two, but the shares of the second shareholder may be transferred to the sole shareholder immediately after incorporation.
Shareholders may be both foreigners and non-residents.
The company is managed by a board of directors consisting of at least three members, who serve as the representative, secretary, or treasurer.

Limited Liability Company

Ownership of a limited liability company is divided into shares.
The minimum capital is 0, and the capital must be denominated in Costa Rican colones (CRC).
The company may consist of one member (shareholder).
The company is managed by one or more managers (gerente).
Both managers and members may be foreign nationals and non-residents.

[Taxes]

In Costa Rica, taxes are levied based on the principle of territoriality.
All income derived from business activities conducted within Costa Rica is subject to Costa Rican corporate income tax.
The corporate income tax rate is 30%.
For small companies (with annual revenue of up to 122,145,000 Costa Rican colones), the corporate income tax rate is 25%, with a progressive tax rate ranging from 5% to 20%.
Companies whose income is generated from activities and transactions outside Costa Rica are not subject to taxation in Costa Rica.

[Corporate Compliance]

Costa Rican companies must maintain a resident agent and registered address in Costa Rica.
Information on the company's ultimate beneficial owner (UBO) must be submitted to the Central Bank of Costa Rica annually.
The company must maintain accounting records and prepare financial statements.
Tax returns must be filed annually.
Financial statements do not need to be audited.

[Corporate Establishment Procedures]

1. Submit the required documents for the shareholders/directors to be registered

2. Pay the establishment costs

3. Sign the corporate establishment documents prepared by our company

4. Sign and notarize the POA (Power of Attorney) and send it by international mail

5. Prepare the corporate establishment certificate and articles of incorporation in the presence of a civil notary public authorized in Costa Rica

6. Submit the notarized public deed and articles of incorporation to the Commercial Registry

7. Incorporation

8. Register the following documents with the Registry of Documents: minutes of the general meeting, minutes of the board of directors, accounting records, resolutions, and certificates

9. Completion of the incorporation process

[Cost Information]

Costa Rica Corporation/Limited Liability Company (SA) Establishment and First Year Costs - USD 4,500

Included:

All applicable registration and government fees (Registro Publico)

Preparation of Articles of Incorporation and Bylaws (in Spanish)

Acting as initial shareholder before a notary public and drafting the Articles of Incorporation

All applicable notary public fees

Submission of the notarized incorporation certificate to the Commercial Registry

Preparation of the shareholders' resolution regarding the appointment of directors and the waiver of rights by the initial shareholders

Preparation of the minutes of the first board meeting regarding stock allocation, director appointment, designation of a registered agent and office, and other related matters

Preparation of the stock ledger

Preparation of stock certificates

Preparation and issuance of the Certificate of Incumbency (Company Existence Certificate)

Providing a registered address service for one year

Local agent services for 1 year

Optional:

Director Nominee Service (1 person) - USD 2,500 (1 year)

*A corporation (SA) requires 3 directors, but a limited liability company (SRL) only requires 1 manager.

Shareholder Nominee Service - USD 2,500 (1 year)

Annual corporate service fees - USD 3,600 (payable annually starting one year after company incorporation)

Included services:

Renewal-related government fees

Maintenance of meeting minutes, registration records, and legal documents

Registration address service for 1 year

Local agent service for 1 year

Submission of company tax returns

Submission of Ultimate Beneficial Owner (UBO) report

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