The First 90 Days: What You Need To Know To Start A Business In Costa Rica

Author:Ms Lyndsey Wheeler
Profession:TMF Group
 
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If you are thinking of starting a business in Costa Rica, here is all you need to know to get through the first 90 days.

Costa Rica continues to be one of the most attractive Latin American countries in which to do business, with a relatively stable economy and high economic growth but it is not without its challenges. Starting a business in Costa Rica has become a little easier by utilizing online processes but it is still complex.

Preparation

The first step to starting a business is choosing the type of entity, a corporation, a limited liability company (LLC) or a branch.

For a corporation:

you must pick four members for a Board of Directors (they can be foreigners); two shareholders must also be assigned. For a LLC:

a general manager must be picked (can be more than one); there is no board of directors but two shareholders are needed to form the company. For a branch:

the legal representative of the parent company must sign the constitution prepared and notarized by the Costa Rican Notary Public, making the process more complicated. The next step is to choose a name for the entity. It is recommended to have three options in case the name is already taken or it is rejected by the registry. At this point, you can choose a legal representative for the entity. It can be a foreigner and you can appoint more than one person, but it is recommended to choose someone local, a resident or citizen of Costa Rica to have a power of attorney to represent the company in the country. There are requirements with some government agencies, such as obtaining a digital signature, that cannot be met by a someone who is not a resident or citizen.

If the company does not have a physical office in Costa Rica, they will have to find an address to register as domicile before the National Registry. This address will be where notifications will be sent as well as where the accounting books are held.

Registering the company

After these steps, a lawyer can create the incorporation documents. The lawyer will provide shareholder proxies and letters for the acceptance of each position of directors and legal representative which will need to be signed by each individual. Each Director and legal representative will need to provide a copy of their legal identification, which, in the case of the foreigner, must be a passport. The company must be put in the Mercantile Registry which can be processed online or in person. This process can take 7-10 business days.

Taxes

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