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.

Do you have any questions about this article? Feel free to contact our Guanacaste Real Estate office.