Can a Foreigner Own a Business In Costa Rica?
By: K. Enis Davis-Lewars
CAN A FOREIGNER OWN A BUSINESS IN COSTA RICA?
Did you know Costa Rica ranks number one in Latin America and ninth place for commercial freedom and protection of private businesses? It is a rapidly developing country with policies for foreigners who want to start a business.
According to the Costa Rican Code of Commerce, foreigners can own a business in the country. However, you must have a residency status and incorporate the company to conduct business.
Costa Rican Corporation Classifications
· Sociedad Anonima (S.A.): a joint stock corporation with a Board of Directors comprised of at least three members and a Fiscal. The shareholders are only liable for their share of ownership.
· Sociedad de Responsabilidad Limitada (S.R.L.): It is a corporation with fewer partners. The liability of the owners is restricted to their original investment.
How a Foreigner Can Start a Business in Costa Rica
· The business needs to be approved and registered with the Registro de Marcas de Comercio.
· A notary public must draft and notarize the public deeds of incorporation. A notary public needs to send the notice of constitution of the company to La Gaceta (Official newspaper of Costa Rica).
· You will be required to deposit 25% of the capital stock in a national bank.
· The incorporation charter needs to be registered in the public registry.
· The corporation must file Form D-140 before the Tax Department.
· You must acquire Work Risk Insurance before the INS (Local insurance agency).
· The corporation needs to be registered as an employer in the CCSS (Social Security Institution).
· You can apply for a Business License after the Health Permit is issued.
The application and documents must be submitted to the Municipalidad (local government) where the business is located to acquire a Patent Municipal (Business License). A capable lawyer domiciled in Costa Rica will be essential to operate your business.
Costa Rican Corporate Taxes for Foreigners Owning a Business
A foreigner can own a business in Costa Rica if the corporation is registered at the Direccion General de Tributacion Directa (Tax Authority). The standard Corporate Tax ranges from10% to 30% on profit, and it will depend on your corporation's total revenue.
Costa Rica is a friendly country that is open to foreign investments. Your hard work and diligence in establishing a business in the country will be well-rewarded.