Costa Rica has business-friendly policies, making all processes involved with ‘doing business’ relatively easy. Governmental policies encouraging foreign investment and a 3.6% GDP growth projected for 2018 have allowed Costa Rica to position itself as one of the great commercial jurisdictions in both Central and Latin America.
With a raft of regional trade agreements across the globe and policies that welcome foreign participation, investors find Costa Rica one of the most open countries in Latin America for business. Before beginning operations in Costa Rica, knowing what kind of legal structure works best for your business needs is vital.
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Different Legal Entity Structures in Costa Rica
The (3) most common legal entities in Costa Rica are:
- The Corporation/Joint Stock Company (Sociedad Anónima – S.A)
- The Limited Liability Company (Sociedad de Responsabilidad Limitada – S.R.L)
- The Branches
Corporation/Joint Stock Company (Sociedad Anónima – S.A):
The S.A. is the most common legal entity structure in Costa Rica. See below some of its key characteristics:
- A Public Document must be drafted with the bylaws and signed by the Public Notary and company shareholders.
- A minimum of (2) shareholders are required.
- There is no established minimum capital.
- A board needs to be appointed, consisting of three board members and a controlling agent.
The availability for the company name needs to be checked with the National Registry Database.
Limited Liability Company (Sociedad de Responsabilidad Limitada – S.R.L):
The Limited Liability Company has the same requirements as the S.A., with the only exception being the administration; shareholders are required to appoint at least one General Manager. Shares are called ¨quotas¨ and there is no minimum required capital, however, the amount subscribed must be divisible by 100. The company name availability must also be checked on the National Registry database.
Branches of Foreign Companies:
Branches of foreign companies are incorporated with a public deed signed by the Public Notary and the power of attorney of the foreign company. Due to the complexities of drafting and signing all agreements, this legal structure is not recommended for SMEs. Apart from the requisites asked by the National Registry, it is also considered more expensive than other legal entities in Costa Rica.
Interested in Beginning Commercial Operations in Costa Rica?
Choosing the type of company depends on which structure is best suited to your business needs. Much consideration needs to be taken before launching your operations in Costa Rica.
Given the favorable conditions in the country and the region as well as the economic growth, Biz Latin Hub through its company offers the experience and support necessary for investors to have a successful market entry in Costa Rica. Feel free to contact us now.
For more information on doing business in Latin America, check out the short video below:
The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
