Establishing Your Business in Costa Rica: A Strategic Guide for International Companies

Costa Rica presents compelling advantages for foreign investors seeking to expand their operations in Latin America. The country offers attractive tax incentives, including corporate income tax reductions for specific sectors, VAT refunds for export-oriented businesses, and customs duty exemptions. With one of the most stable political environments in the region, Costa Rica provides a secure foundation for business development. Its strategic Central American location facilitates access to both North and South American markets. The country's well-educated workforce enhances productivity and innovation capabilities, while modern legal frameworks protect intellectual property and corporate rights, minimizing commercial risks.

Business Entity Options in Costa Rica

International companies can choose from several legal structures when entering the Costa Rican market:

Limited Liability Company (Sociedad de Responsabilidad Limitada, SRL)

The SRL requires one director and two shareholders, with liability limited to their capital contributions. There are no nationality restrictions for directors or shareholders. The minimum paid-up capital is $1, but 25% of the declared capital must be deposited in a corporate bank account. Companies must maintain a registered office in Costa Rica with Spanish-language statutory and accounting records. Non-resident directors require a local registered agent.

Corporation (Sociedad Anónima, SA)

This structure requires three directors (President, Secretary, and Treasurer) and at least two shareholders. Shares are transferable by endorsement and must be recorded in the shareholder registry. The SA must appoint a local legal representative with management authority, who cannot serve as a director. In practice, the Board President typically acts as General Manager.

Branch Office (Sucursal)

Foreign companies can establish branches by appointing a power-of-attorney holder with full administrative authority. Required documentation includes:

Power of attorney registered with the Commercial Registry
Certificate of good standing from the parent company
Agent's acceptance declaration

All documents require authentication through Costa Rican consulates.

Representative Office (Oficina de Representación)

This 100% foreign-owned entity cannot engage in direct sales but may conduct market research and promote parent company activities. Many technology companies use this structure for initial market exploration before establishing full operations.

Key Registration Requirements

Successful company establishment requires careful attention to documentation and compliance:

Valid passports for all shareholders
Approved company name reservation
Detailed business activity description
Declared initial capital amount
Local representative appointment documents
Labor risk insurance registration
Spanish-language financial statements (maintained for 10 years)
Tax authority registration
Local registered address for legal correspondence

Company Registration Process

Navigating Costa Rica's business establishment requires a systematic approach:

Select appropriate legal structure based on operational needs
Reserve unique company name through National Registry
Prepare and submit required documentation
Open corporate bank account with local institution
Register for tax obligations and social security

Timeline Expectations

Understanding processing timelines helps realistic planning:

Entity Type	Establishment Time	Bank Account Opening
Limited Liability Company	4 weeks	3 weeks
Corporation	5 weeks	4 weeks
Branch Office	6 weeks	5 weeks
Representative Office	6 weeks	5 weeks

Cost Considerations

Budget planning requires understanding both initial and ongoing expenses:

Entity Type	First Year Costs (USD)	Annual Ongoing Costs (USD)
Limited Liability Company	15,815	5,290
Corporation	9,985	3,750
Branch Office	9,835	3,600
Representative Office	11,835	3,800

Alternative Market Entry Solutions

For companies seeking faster market entry without entity establishment, SailGlobal offers comprehensive employer of record services. This solution enables businesses to hire talent in Costa Rica within days rather than weeks, handling all local compliance, payroll, and HR administration.

Costa Rica Company Registration: Complete Guide for Foreign Businesses 2024