Costa Rica Company Formation
There are four different types of corporations that can be formed in Costa Rica. The first is known as a corporation, referred to as a Sociedad Anonima, “S.A.” or “SA.” The second is the general partnership referred to as a Sociedad en Nombre Colectivo. Next is a limited partnership, called a Sociedad en Comandita. Last is the limited liability company, referred to as a Sociedad de Responsabilidad Limitada or SRL. The most common type of company formed is the first, which is similar to a corporation in the United States. For this type of corporation formed in Costa Rica, typically the abbreviation S.A. follows the company name, much like Inc., Corp. or Ltd. follows companies like this formed in the US and UK.
Information can also be supplied on how to open a bank account in Costa Rica. Alternatively, many owners will form the company in Costa Rica and establish the offshore bank account in another foreign jurisdiction.
Costa Rica Incorporation – Getting Started
To start the process of incorporating in Costa Rica, the government requires a public document submitted that kickstarts your company’s registration process and the steps necessary toward being awarded a corporate number in Costa Rica.
Once you start the registration process, you also need to take the next step of registering your company with the registry in Costa Rica. Depending on your limited company’s operations, you may need to sign up for additional permits with the government, so this step is crucial to the legality of your enterprise. Most people who simply want to use the company to hold a bank account do not need to take this additional step.
Benefits of Incorporating in Costa Rica
The primary benefit for a business owner seeking Costa Rica company formation is the capability of the corporation, once formed, to limit personal liabilities. In fact, there are many instances of business owners owning several corporations in Costa Rica just for this reason. Furthermore, many business owners take the step of owning one corporation dedicated to each vehicle or property owned or one for each bank account. The primary goal of this strategy is to keep one’s personal assets separate and protected from one’s business dealings and for financial privacy.
To start the registration process in Costa Rica, contact an agent (such as this one). The process can be accelerated via buying a pre-registered (shelf) type company, which costs not much more than the typical registration service, depending on its age. If you decide to speed up incorporating through a Costa Rica shelf corporation, the name will have already been selected and you can change it at a later time if you wish.
What You Need to Incorporate in Costa Rica
To complete the incorporation process in Costa Rica, there are a few things you must complete to legalize the process. These steps include:
- The required document, which must be notarized, and turned into the government agency that will then assign you a corporate identification number. To complete this document, two or more people need to sign off on the articles of incorporation.
- While working on the submission of the new company, your agent will verify with the notary and the registry that that the business is incorporating under a unique name not already being used by another company.
- Another step that must also be completed through the notary public is a document that will be submitted to the Registry notifying them about the company’s capital stock, including any personal property or real estate contributed to the business.
- Next, the limited company must announce its incorporation publicly by publishing in La Gaceta, a legal newspaper in Costa Rica. The public advertisement needs to run in this paper for eight days. The agent working with the company can help the business complete this step.
- Fees then need to be paid on behalf of the company. This step includes submitting the fees for stamps and registry rights through a branch office of the Banco de Costa Rica. Again, the agent working with you on the incorporation process will complete this step.
- After all of these steps are finished, the paperwork required for incorporation needs to go to the government registry. This process includes the submission of all public documents, paying for the stamp and registry rights, and notarized proof of the newspaper ad that includes the newspaper’s coupon number as proof of publication in La Gaceta.
Forming the Costa Rica Corporation’s Articles of Incorporation
Costa Rica has a few specific requirements that must be addressed when forming the articles of incorporation. These include:
- Listing where and when the company incorporation took place.
- Including the type of corporation that the person is forming.
- Submitting a clear mission statement, or company purpose, within the articles of incorporation (which can be general or specific).
- Stating the address of the corporation (which is typically provided by the agent).
- Disclosing certain information about the shareholders, which includes name, residence, nationality, and marital status.
- Including the names of the company’s officers and Board of Directors. To complete this step, you need to include three names and officers—a president, treasurer, and secretary. Nominee names are available as well.
- Disclose the planned length of the corporation, which can be between 99 and 100 years and should start with the corporation’s formation date. Also, mention any possible corporate extensions that might be required.
- You must include the total capital stock amount of the corporation, either in dollars or colones. The commonly disclosed amount for the stock is around 1,000 CRC. Keep in mind that shares are indivisible. Along with this, you need to mention how the capital stock will be divided among the listed shareholders.
- Next, the articles of incorporation must state both enumerations of powers, and expected (estimated) profits and losses.
- The articles of incorporation need to include plans for how the company might dissolve or liquidate should either one of those events ever occur.
- Also, if you are incorporating in Costa Rica but live outside of the country, then your agent automatically finds a registered agent for your corporation. The registered agent then works to receive any service of process that may be delivered to the corporation.
- Your company will also be required to maintain a savings fund, known as a legal reserve fund (Fondo de Reserva Legal). The Commercial Code of Costa Rica requires that five percent of the business’s profits yearly must go in this fund as a legal reserve. This requirement is temporary, and once your reserve funds reach the equivalent of twenty percent of your company’s original stock value (submitted on your articles of incorporation), you have met this goal.