Starting a Business in Costa Rica: Tips and Steps

Nov 5, 2024 | Commercial Law, General

How to Start a Business in Costa Rica by AG Legal

If you’re considering starting a business in Costa Rica, you’re making a smart move! Our country offers a favorable business environment, political stability, and unique investment opportunities. As a leading hub for foreign investment, AG Legal has helped countless entrepreneurs navigate the company registration process, and we’re here to guide you every step of the way.

Why Choose Costa Rica to Open a Business?

Costa Rica is a top destination for entrepreneurs worldwide; it’s a thriving hub for businesses expanding into Latin American markets. With a favorable business climate, robust free trade agreements, and a skilled workforce. At AG Legal, we’ve seen a surge in business ventures ranging from tech startups to eco-tourism enterprises, all seeking to tap into Costa Rica’s rich potential.

So why should you start a business in Costa Rica? The reasons are clear:

Strategic location: Access to North and South American markets.
Political stability: A long-standing democracy with a pro-business government.
Sustainability: A global leader in eco-friendly initiatives that appeal to businesses with a green focus.

Legal Requirements for Company Registration in Costa Rica

Understanding the legal requirements to start a business can be overwhelming, especially if you must familiarize yourself with local regulations and legal entities. We specialize in helping companies comply with Costa Rica’s legal framework, ensuring a smooth and hassle-free setup process.

Here are the essential legal steps:

Registering the company: Your business must be registered with the National Registry. This step also involves preparing the Articles of Incorporation, the company name, which outlines the company’s structure, shareholders, and objectives.
Social Security registration: All businesses must be registered with the Costa Rican Social Security Fund (CCSS), Caja Costarricense de Seguro Social. This is mandatory for employing staff and contributing to the country’s healthcare and pension systems.
Tax registration: You must register with the Costa Rican Tax Administration (Ministerio de Hacienda) to obtain a corporate tax ID. This ensures your business complies with tax regulations and that you pay all of them.

By working with AG Legal, you can rest assured that you’re following all the necessary steps and not missing any critical details.

Types of Business Structures in Costa Rica

One of the first decisions you’ll make when you set up a business in Costa Rica is choosing the proper business structure. This decision affects everything from taxation to personal liability, so it’s crucial to get it right. Here are the most common structures:

Sociedad Anónima (S.A.): This is a corporation where the shareholders have limited liability. It’s ideal for larger businesses that require flexibility.
Sociedad de Responsabilidad Limitada (SRL): This is a Limited Company (LTDA) with limited liability to the capital invested. Smaller businesses often prefer this due to its straightforward structure.

Each structure has its pros and cons, and at AG Legal, we can help you decide which option best suits your business needs.

Foreigners Starting a Business in Costa Rica

Are you a foreigner looking to start a business in Costa Rica? Good news! The process is open to foreigners, but there are specific requirements to be aware of. For instance, while residency is not mandatory for owning a business, it is required if you plan to work directly in your enterprise. But let’s be clear: you can consider living in Costa Rica with the risk that you may not want to return to your country.

At AG Legal, we are experts in guiding foreign investors through the business registration process. We understand the nuances of local regulations and can help you navigate immigration and legal requirements smoothly so you can focus on growing your business. Our clients have praised us for making their transition to Costa Rica seamless, and we’re here to do the same for you.

How to Obtain a Business License

Once your company is registered, you need to secure a business license (known locally as a “patent”) from the local municipality. This license allows your business to operate legally within the chosen jurisdiction. The process involves:

Application submission: Documents proving company registration, tax ID, and local permits.
Additional permits: Depending on your type of business, extra licenses are required, especially in regulated industries like food service or construction.

For example, if you plan to open a restaurant, you’ll need health and safety permits. AG Legal can help you understand exactly what your business needs to stay compliant and fully operational.

Opening a Bank Account for Your Business

A bank account for your business is essential for handling daily operations, managing payroll, and receiving payments. To open an account in Costa Rica, you must present proof of company registration, tax information, and valid identification.

AG Legal has partnerships with local banks, including Banco de Costa Rica, to simplify this process. We’ll ensure you meet all legal requirements and make the banking setup as smooth as possible.

Tax Requirements and Obligations

All companies in Costa Rica must comply with Costa Rican tax regulations. This includes paying corporate taxes, which vary based on your company’s revenue. Additionally, businesses must contribute to the Costa Rican Social Security System (CCSS), which funds healthcare and pensions for employees.

Our sister’s company, AG BPO Services, has experienced accountants who will ensure your business practices comply with local laws and help you avoid penalties and fines.

Business Environment: Opportunities and Challenges

Costa Rica’s business environment is one of the most dynamic in Latin America. The country provides excellent business opportunities with a stable economy, a strong focus on education, and a thriving tourism sector. However, like any market, it has its challenges.

The bureaucratic processes involved in company registration and obtaining licenses can be complex. Additionally, while Costa Rica’s cost of living and doing business can be higher than in some neighboring countries, the benefits of operating here—such as political stability, safety, and a well-educated workforce—often outweigh these challenges.

Register a company in Costa Rica with a good lawyer includes a good reputation in international trade. Costa Rica is part of the OECD, which gives peace of mind and, at the same time, compliance with obligations such as filing an ultimate beneficial owner, all against money laundering.

If you want to start a Costa Rica adventure with a specific business and would like expert guidance, contact us at AG Legal for your business success.

We have extensive experience helping companies of all sizes succeed in this vibrant market, and we’re ready to assist you at every step.

Feel free to contact us: [email protected]

Companies in Costa Rica

Mar 9, 2023 | Commercial Law

[fusion_builder_container hundred_percent=”no” hundred_percent_height=”no” hundred_percent_height_scroll=”no” hundred_percent_height_center_content=”yes” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” status=”published” publish_date=”” class=”” id=”” link_color=”” link_hover_color=”” border_color=”” border_style=”solid” margin_top=”” margin_bottom=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” enable_mobile=”no” parallax_speed=”0.3″ background_blend_mode=”none” video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” video_preview_image=”” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ type=”legacy”][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” hover_type=”none” border_color=”” border_style=”solid” border_position=”all” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”” margin_bottom=”” background_type=”single” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” background_blend_mode=”none” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_type=”regular” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ last=”true” border_sizes_top=”0″ border_sizes_bottom=”0″ border_sizes_left=”0″ border_sizes_right=”0″ first=”true”][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”” rule_size=”” rule_color=”” hue=”” saturation=”” lightness=”” alpha=”” content_alignment_medium=”” content_alignment_small=”” content_alignment=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” margin_top=”” margin_right=”” margin_bottom=”” margin_left=”” fusion_font_family_text_font=”” fusion_font_variant_text_font=”” font_size=”” line_height=”” letter_spacing=”” text_transform=”” text_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

If you are an investor or planning to start a business in Costa Rica, deciding what type o company you may need is a crucial question:

First of all, in Costa Rica, there are four types of companies:

The Stock Sorporation (Sociedad Anonima).
The Limited Company. (LTDA.) (Sociedad de responsablidad limitada).
The general partnership.
The limited partnership.

The trading companies most commonly used in Costa Rica are the S.A. stock corporations and L.T.D.A. limited liability companies.

Before we enter to explain the two main types of companies, there are a few decisions that must be made in any corporation:

What will be the corporate name? This can be a fictitious name. Currently, it is also possible to register companies whose name consists of the corporate identity number assigned to them by the Registry.

What will be the corporate capital and share distribution? The available amount of capital, the value of each one of the shares, and how they will be distributed among the partners. The social capital must be established in the colon currency.

What will be the corporate domicile? The place designated to receive communications.

What will be the term of the corporation? It is required to determine the number of years the corporation will exist. The duration commonly used is 99 years.

Who will represent the corporation? By law, the President is the corporation’s representative, with the full power of attorney. Still, appointing people who want to represent the corporation is also possible.

Resident Agent. When the corporate representatives have no domicile in Costa Rica, it is mandatory to appoint a Resident Agent, whose function will be to receive communications addressed to the corporation.

Sociedad Anonima (S.A.)

How Does an S.A. Work?

In Costa Rica, S.A. stands for “Sociedad Anónima,” a business entity commonly used in the country. An S.A. is similar to a corporation in the United States or a public limited company in the United Kingdom.

The main advantage of forming an S.A. is that it provides limited liability to the company’s shareholders. This means that the shareholders are only responsible for the amount of money they have invested in the company and are not personally liable for its debts and obligations.

Another advantage of forming an S.A. is that it allows for an easy transfer of ownership. Shares in the company can be bought and sold without affecting the company’s operations or requiring the company to restructure. Agencies and branches may be established inside and outside Costa Rica and can perform all sorts of business.

You may want to acquire if you want to invest or develop an activity without using your assets to secure debts.

S.A. are commonly used in Costa Rica for businesses in various industries, including tourism, agriculture, and real estate. However, consulting with a lawyer before forming an S.A. is essential to ensure that it is the best business structure for your specific needs and circumstances.

An S.A. in Costa Rica is subject to corporate income tax and must file annual tax returns. The tax rate is currently 30% of the company’s profits.

Regarding its International taxation, for this type of company and any company in Costa Rica, the territorial principle is reining the taxation; this means that the company does not need to pay any income tax as long there is no costarican source involved. The V.A.T. is payable monthly, and the income tax is payable yearly.

In summary, S.A. is a type of business entity in Costa Rica that provides limited liability to its shareholders and allows for easy transfer of ownership. It is commonly used in various industries, and careful consideration should be taken before forming an S.A. to ensure it is the proper structure for your business. Depending on the type of business, even the company can work on offshore transactions.

Management of a corporation is conducted through a Board of Directors, which must include at least a President, a Secretary, and a Treasurer. The supervisory task is carried out by appointing a Supervisory Director.

Incorporation of an S.A.

A minimum of two shareholders is required to form a corporation, and registering the entire corporate capital in one person’s name is not allowed at the time of incorporation. Still, assigning all shares to one shareholder after the company’s registration in the National Public Registry is possible.
Regarding the corporation’s management, there are three legal entities in the company: The shareholders meeting, the Board of Directors, and the supervisory entity. The Shareholder Meeting is the main organ comprised of the stockholders, which could be the common stockholders or privileged shareholders. Ordinarily, the Meeting meets once a year, and extraordinarily, as the need arises.
It is important to note that the shareholders can be foreigners, and there is no need for a Costa Rican on the board of directors.
For the Board of Directors, a minimum of 3 people is required: President, Secretary, and Treasurer. Depending on the term of the appointment, the positions on the board of directors can be renewable.
Any company in Costa Rica must be incorporated before a notary public who will draft the articles of incorporation and then be registered before the Public Registry.

This company is suitable for carrying on international business.

Sociedad de Responsabilidad Limitada (LTDA – S.R.L.)

What is an LTDA.?

An LTDA company, also knows as Sociedad de Responsabilidad Limitada (SRL), is a limited corporation in Costa Rica. It is a popular business organization for the country’s small and medium-sized enterprises (SMEs).

The LTDA company is a legal entity independent of its owners or shareholders. It provides limited liability protection to its owners, meaning that they are not personally responsible for the company’s debts or legal obligations beyond the amount of their investment in the company.

The company’s management is carried out by one or more administrators who the shareholders appoint. The administrators can be shareholders or third parties responsible for managing the company’s affairs, making decisions, and representing the company in legal matters.

One of the main advantages of establishing an LTDA company in Costa Rica is the ease of administration and operation. It has a simplified structure compared to other types of companies, with fewer legal requirements and formalities to comply with.

Another advantage is the limited liability protection provided to the shareholders; this means their assets are protected in case of the company’s legal or financial issues.

The advantage of a limited liability company is that it has almost the same characteristics as a corporation. Regarding the independence of its assets, it works the same as a corporation. Forming a limited company requires a minimum of two quota holders (called cuotistas), and the company capital can later be transferred to one person. Its management only requires a manager, although a sub-manager may also be designated.

In conclusion, an LTDA company is a popular choice for SMEs in Costa Rica, offering limited liability protection and a simplified structure for management and operation. It is important to consult with legal and financial experts before establishing an LTDA company to ensure compliance with all legal requirements and to make informed decisions regarding the company’s administration and operation.

This company is suitable for carrying on international business.

How Does an LTDA.?

All sorts of business may be conducted. Its structure is used for businesses of a smaller dimension than that of an S.A. The L.T.D.A.’s Manager is the company’s representative with the full power of attorney, although it is possible to appoint several Sub-managers.

Incorporation of an LTDA.

To establish an LTDA company in Costa Rica, there must be at least two quota holders. These quota holders can be individuals or legal entities. The company’s capital is divided into equal parts, represented by quotas. Once the company has been duly set up, the distribution of the percentages must be issued by certificated quotas, where the name of the quota holder must be specified.

Remember that in a limited company, the social capital is represented by registered shares called quotas.

It is required to define the number of quotas making up the corporate capital and their distribution. There always exists a preemptive right towards other shareholders that must be respected when shares are going to be transferred to someone else.

Differences between an S.A. and an LTDA.

Organization and Management

A corporation called S.A. has a Board of Directors composed of at least three people: President, Secretary, and Treasurer. In an LTDA company, management is conducted by one person called the Manager or by any designated people who facilitate its organization.

Representation of Social Capital

In an S.A. corporation, the corporate capital is divided into shares. In an LTDA company, these are called quotas.
In an S.A. corporation, shares can be transferred freely using an endorsement. In an LTDA company, quota transfer is more restricted and is carried out through assignment. The general assembly must approve all the assignments to a third person of quota holders, and this must be done through the quota assignment agreement.

Differences in terms of legal books.

An S.A. corporation must keep three legal record books (Minutes of the General Meeting, Register of Shareholders, and Minutes of the Board of Directors). An LTDA company, which lacks a board of directors, must keep only two record books (Minutes of the Quota Holder Meetings and Quota Holder Registry book).

Supervision.

Supervision of an S.A. is the duty of a Supervisory Director (in Spanish: fiscal), whose position is entirely independent of the Board of Directors, whereas a limited liability company is subject to self-inspection, meaning that the Shareholders Meeting is in charge of this duty. In an LTDA company, there is a lack of supervision.

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Openning a Bank Account in Costa Rica

Feb 18, 2023 | Commercial Law, General, Inmigration Law

One of the most common questions is about opening a bank account in Costa Rica.

Discover how to open a bank account, whether you’re a foreigner or not! Get ready for all the paperwork and learn about top banks. Also, here you will know if you can open an account, which is the local bank account requirement.

The banking system in Costa Rica is well-established and offers a range of services to both individuals and businesses, from checking and savings accounts to loans and investment options.

Having a bank account is not only convenient, but it’s also essential for several practical reasons. For starters, having a bank account enables you to receive your salary or any other income directly into your account, making it easier to manage your finances and keep track of your expenses. Additionally, most bill payments, including utilities, can be created automatically from your bank account, saving you time and hassle.

Another advantage of opening an account in Costa Rica is its increased security. Instead of carrying large amounts of cash, you can keep your money in the bank, where it’s safe from theft or loss.

Requisites of Bank Account in Costa Rica

Sooner or later, the investor, or if you are playing to live in Costa Rica, will have to deal with opening an account. Costa Rican banks are authorized by law to offer said service under specific circumstances, and the primary purpose is to identify the client and to accomplish the money laundering politics.

It should be clarified that the demands vary from bank to bank since these rules are not a concrete list stipulated in the law; depending on each case, a bank can order different conditions when dealing with several new clients. Nevertheless, most banks ask for the same demands nationwide.

This article will provide the requirements that can be ordered to a natural (individual) person or a legal entity (corporations, associations, companies, etc.) by a bank to open a bank account or access their services.

Requisites for Individual:

Costa Rican citizens: original and valid identification card.
Foreigners must show a DIMEX card (residence card) for the person who is a legal resident. This requirement can be demanded or not depending on the bank, even though the law requires one to ask for it; due to the growing foreign investment in Costa Rica; the banks are more flexible regarding this requisite.
Non-resident foreigner citizens: Passport with the entry and visa entry stamp in the cases needed in Costa Rica.
Sign the Know Your Client Form (KWC) (“Conozca A Su Cliente”).
Proof of income.

Requisites for a Company.

A certificate of good standing also must indicate who the representatives are, their powers and faculties, and their appointment period.
Certificate of the company’s social capital according to the shareholders’ book in the case of Costa Rican corporations.
Associations, charitable foundations, cooperatives, and similar organizations: must request the equivalent documents of this type of entity.
Sign the Know Your Client Form (“Formulario Conozca A Su Cliente”).
Proof of the company’s income or origin of the funds that justify the transactions that will be carried out.
For the justification of the company’s income, the following documentation can be considered reasonable (for linking up the account and further updates).
Financial statements of the last fiscal period must be provided certified, audited, or duly endorsed by the accountant and the legal representative.
Companies that start operations can provide their projected cash flow statement, which must be updated at the end of the client’s first year of operation and then replaced by their financial statements that need to be audited, certified, or duly endorsed by an accountant or their legal representative.

Can a Foreigner Open a Bank Account in Costa Rica?

If you’re a foreigner planning to live or do business in Costa Rica, you may wonder if you can open a bank account there. The short answer is yes; foreigners can open a bank account in Costa Rica. However, specific requirements and procedures must be followed.

Firstly, it’s important to note that each bank may have specific requirements, so it’s always best to check with the bank directly for their specific guidelines. That being said, here are some general conditions that most banks in Costa Rica typically have:

Identification: You must provide a valid passport or a Costa Rican residency card (“cedula”) for the person who has legal residency. Some banks may also require additional forms of identification.
Proof of address: You must provide a document showing your current address, such as a utility bill or a rental agreement.
Initial deposit: Some banks may require an initial deposit to open the account. This amount can vary depending on the bank and the type of account you are opening.
Source of income: You may be asked to provide information about your source of income, such as employment or investments.
References: Some banks may require references from other banks or financial institutions.

It’s also worth noting that if you are not a resident of Costa Rica, you may be subject to certain tax regulations. This is something you should discuss with the bank or a tax professional.

When opening a Costa Rica bank account, choosing a reputable bank that meets your specific needs is essential. Some of the most popular banks in Costa Rica include Banco Nacional, Banco de Costa Rica, and Scotiabank.

In summary, while some requirements and procedures must be followed, foreigners can generally open a bank account in Costa Rica. Doing your research and working with a trusted bank can ensure that your banking needs are met while living or doing business in the country.

As a final piece of advice, do get disappointed if you are denied opening your account, this is very common, and you only need to try in another bank.

Can I Open a Bank Account as a Non-Resident?

The short answer is yes; it is possible to open a bank account in Costa Rica as a non-resident. However, the process and requirements may vary depending on the bank and the type of account you want to open. Understanding the needs and process is essential to ensure a smooth and successful application.

One of the first things to remember is that some banks in Costa Rica require applicants to have a Costa Rican ID card, known as a cedula. However, some banks do not require a cedula and accept other forms of identification, such as a passport or a driver’s license.

Best Bank in Costa Rica

First, you may understand that you will find two types of banks in Costa Rica: Public and Private.

Public means state-owned banks, which means the government supports public banks, guaranteeing that your money will be secure before bankruptcy.

Private is referred to as private capital; even though it is regulated and supervised by the National Superintended of Financial Institutions (SUGEF), the costa rican government will not be responsible for any bankruptcy.

From the capital point of view, Banco Nacional de Costa Rica is one the best bank in Costa Rica. It is the largest bank in the country, with over 200 branches across the country, making it accessible to most parts of the country. Banco Nacional de Costa Rica is also the oldest bank in the country, with over 100 years of experience.

Banco de Costa Rica is a very solid bank regarding the capital supporting your money.

From the perspective of an account holder, client assistant, and online banking point view, private banks are much better than Banco Nacional and Banco de Costa Rica. Banks such as BAC Credomatic, Scotiabank, and Promerica have much better online services than public ones and are more flexible for open accounts.

You may check first what the banks offer and what banks require before you submit your documents.

AML (Anti Money Laundering) Regulations

Because of the AML in Costa Rica, when you are getting involved in the process of opening a bank account or once you have one already opened, one of the most common requisites is proof of income and having an updated profile in your bank account, so here are some reasons why these requisites are important for banking purposes in Costa Rica:

Compliance with regulations Banks in a cosmusty law to comply with Anti-Money Laundering (AML) regulations. One critical key requirement is to verify the source of funds, and proof of income is an essential part of this process. By providing proof of income, you demonstrate that your funds come from a legitimate source. This aspect is based on law 8204 (Law on Narcotic Drugs, Psychotropic substances, Drugs of unauthorized use, related activities, money laundering, and financing of terrorism).
To update your profile as a banking system user once a year is mandatory; if you don’t perform this task once you are asked to do it, one of the consequences can be that the bank can close your account.

Summarizing, getting involved in opening a bank account in Costa Rica is not a simple task; please get in touch with us, and AG LEGAL will help you through this process.

Hiring a Lawyer in Costa Rica

Dec 25, 2022 | Commercial Law, Criminal Law, General, Inmigration Law, Intelectual Property

The importance of hiring a lawyer in Costa Rica cannot be overstated. The legal system in Costa Rica can be complex, and having a knowledgeable and experienced lawyer on your side can make a big difference in the outcome of your legal matter.

Whether you are involved in a court case, negotiating a contract, immigrating to this beautiful country, or need advice on a legal issue, having a lawyer who is familiar with the laws and legal processes in Costa Rica can be invaluable. A good lawyer can help you navigate the legal system, protect your rights, and achieve the best possible outcome for your case.

But how do you go about hiring a lawyer in Costa Rica? The process can initially seem intimidating, but it’s pretty straightforward once you know what to do. Here are some critical steps to follow:

Determine your legal needs: Before looking for a lawyer, you must understand what kind of legal assistance you need. Do you need a lawyer to help you with a specific legal issue, such as drafting a will, negotiating a contract, or ongoing legal representation in a court case? Understanding your legal needs will help you find the right lawyer.
Research and compare lawyers: Once you know what kind of legal assistance you need, it’s time to start researching and comparing lawyers. You can do this through online directories, recommendations from friends or family, or by contacting the Costa Rican Bar Association.
Understand the different types of agreements on legal fees: When hiring a lawyer in Costa Rica, you will likely be asked to enter into three different types of agreements: a contingency fee agreement, a flat fee agreement, or an hourly fee agreement.
Sign the agreement: Once you have agreed to the terms of the agreement, it’s time to sign the contract and formally retain the lawyer’s services or at least to have some written support.

By following these steps, you can ensure that you have a qualified and experienced lawyer to help you navigate the legal system in Costa Rica and achieve the best possible outcome for your case. Don’t underestimate the importance of hiring a good lawyer – it can make all the difference in the world.

Is it necessary for the lawyer to be in a Law Firm?

In Costa Rica, a lawyer is not necessarily required to be part of a law firm to practice law. Lawyers in Costa Rica can choose to work independently or as part of both options. Have pros and cons to both options.

Working independently can give a lawyer more flexibility and control over their practice. Still, it can also be more challenging to build a client base and handle complex legal matters without the support of a team.

On the other hand, working as part of a law firm can provide access to resources and expertise that may not be available to an independent lawyer.

What is essential is to hire a good law firm in Costa Rica and verify that the lawyer is duly accepted in the bar of attorneys; sometimes, in our law firm, we have seen cases where because of the lack of verification, the client ended up involved in a big legal mess since that person who you think is a lawyer is not a person licensed to practice law.

We will analyze the most usual areas of law where the attorneys are consulted.

When do I need a Real Estate Attorney?

There are several situations where you may need to hire a real estate attorney in Costa Rica. Some common reasons to seek the services of a real estate attorney include the following:

Buying real estate: If you are buying or selling real estate in Costa Rica, the real estate attorney shall check the property before the Public Registry to check the historical movements on the title of the property, review the documents, and represent you in the transaction.
Reviewing and negotiating contracts: If you are entering a real estate agreement, such as a lease or purchase agreement, a real estate attorney can review the terms and negotiate any changes on your behalf.
Resolving disputes: If you are involved in a real estate dispute, such as a boundary dispute or a dispute over the terms of a contract, a real estate attorney can represent you in court and help you resolve the dispute.
Obtaining financing: If you need financing to purchase real estate in Costa Rica, a real estate attorney can help you negotiate the terms of the loan and review any related documents.
In Costa Rica, most Real Estate attorneys are notary publics, which means that usually, in any real estate transaction where the property title is transferred, you will need a notary public.

Overall, if you are involved in any real estate transaction or dispute in Costa Rica, it’s a good idea to seek the advice of a real estate attorney to protect your interests and ensure that the transaction is handled correctly.

When do I need an Immigration Attorney?

If you are planning to move to Costa Rica or are already living in, you will need help with immigration issues; you may consider hiring an immigration attorney. Here are some everyday situations in which you might need an good legal service:

Applying for a visa: If you are planning to visit, work, or study in Costa Rica, you may need to apply for a visa. An immigration attorney can help you determine which type of visa is best for your situation, help you gather the required documentation, and guide you through the application process.
Plan permanent residence: Ipermanentlyo live in Costa Rica permanently, you will need permanent residence. Permanently can help you understand the requirements for obtaining permanent residency and assist you with applying.
Renewing your visa or residence permit: If your visa or residence permit expires, you will need to renew it to continue living in Costa Rica. An immigration attorney can help you understand the renewal process and ensure you have all the necessary documentation.
Applying for citizenship: If you are eligible and wish to become a citizen of Costa Rica, an immigration attorney can help you understand the requirements and assist you with the application process.
Resolving immigration problems: If you have problems with your immigration status in Costa Rica, such as being denied a visa or facing deportation, an immigration attorney can help you understand your rights and options and represent you in the legal proceedings.
Retirement plan: if you plan to retire in Costa Rica, hiring a good attorney must be your first step.

The Importance of hiring a good Corporate Lawyer.

Hiring a good corporate lawyer in Costa Rica is essential for businesses of all sizes and types. A corporate lawyer can provide valuable legal guidance, explaining to you the business law and representation for a wide range of business-related issues, including:

Formation of the business: If you are starting a new business in Costa Rica, a corporate lawyer can help you choose the proper legal structure for your business, such as the type of corporation, partnership, and assist you with the formation process.
Compliance with laws and regulations: A lawyer who knows corporate law can help ensure that your business complies with all relevant laws and regulations in Costa Rica, including tax laws, labor laws, and environmental regulations.
Contract review and negotiation: You can review and negotiate contracts for your business, including agreements with vendors and customers.
Risk management: A corporate lawyer can help identify and manage legal risks that may affect your business, such as liability risks or intellectual property issues.
Investment: Also, if you are investing, you need to double-check who you are dealing with; a corporate attorney can help you to decide if it is a good or bad investment.
Trademark: It is essential to register your brand or logo before starting to operate.

Overall, getting the correct legal service, and getting the right legal guide to Costa Rica, can be the difference between having a successful start in a foreign country like Costa Rica.

Embassies Attorneys list

Even though Spanish is the official language, you can find lawyers who speak English, so at least two embassies enlisted a list of law firms and attorneys who speak English that can provide legal consultation for your local or international legal issues.

For the UNITED ESTATES OF AMERICA EMBASSY, you can check here: CLICK HERE USA EMBASSY.
For the UNITED KINGDON EMBASSY, you can check here: CLICK HERE UK EMBASSY.

Attraction of film investments in Costa Rica

Dec 5, 2022 | Commercial Law, General, Inmigration Law

Lately, Costa Rica has boosted the attraction of film investments. This type of industry has been promoted because the country has become one of the best tourist and business destinations due to its impressive natural beauty, pleasant business climate, and legal system. Tourists and important investment groups find the right environment for their projects; among them are those of film production, be it cinema, television, commercial, or advertising.

In this regard, Law # 10.071, “LAW TO ATTRACT FILM INVESTMENT IN COSTA RICA,” was enacted on November 16, 2021, published in the Official Gazette La Gaceta No. 239 of December 13, 2021, the date from which it becomes effective, and whose purpose is to promote investment and development of film activities of international character, according to its Article 2, declaring itself of “public interest” (Article 1). It contemplates, among other aspects:

1) Film activities.
Film activities benefiting from the scope of this law (article 2):
(a) Short, medium, and feature films;
b) Documentaries, series, and soap operas;
c) Reality shows, audiovisual marketing pieces, commercials, and video clips;
d) Serial programs or their chapters;
e) Post-production services; and
f) Drawing, digital animation, and video games.
These activities must be totally or partially produced in Costa Rica, target a broad international market and make local commercial linkages.

1) Beneficiaries and incentives.

Aimed at individuals or legal entities not domiciled in Costa Rica, producers, or co-producers of the film industry together with national individuals or legal entities (article 4), providing:

a) Exemption from income tax and on remittances abroad, whose source is not generated in the country;
b) Suspension of taxes for temporary importation, etc.
c) Exemption from all taxes on costumes, scenery, etc.; and
d) Refund of 90% of the total amount paid for VAT on purchases of goods and services over five hundred thousand dollars.

2) Local governments (Municipalities).

In migratory aspects, for example, local or municipal governments will govern, being able to approve exemptions and permits for the use of locations (Article 8).

3) Migratory facilities.

Another fundamental aspect is the migratory facilities (article 9), for which adequate and timely prior legal advice is recommended, for the meticulous preparation of the corresponding documents, such as material, documentary, and legal information, related to aspects such as staff, equipment to be imported, temporary or definitive, locations, tax facilities, project term, etc.

To access the immigration facilities, the identity and specific function of each person entering the country must be provided, and a temporary work visa or immigration permit must be granted.

Another novel aspect, due to the agility required by these projects and that, in some cases, depends on weather factors or availability of locations, is that Immigration, to prove the identity of the staff to enter, can make use of any type of document, physical or digital information, affidavits or other instruments it deems relevant.

4) Filming in State locations.

Filming in State locations, such as national parks, forest reserves, etc., is encouraged.

This article is just a general aspect of Law # 10.071 that promotes the filming investment.

Re-registration of dissolved companies

Aug 1, 2022 | Commercial Law, Taxes

On Tuesday, May 31^st, 2022, through the Official newspaper, The Gazette Number 100, the Re-registration of Dissolved Companies Law was published. This recently approved bill aims to promote national economic reactivation because dissolved companies will be able to resume the lucrative activities for which they were created.

The present Law establishes that dissolved companies can re-register before the Legal Entities Registry of the National Registry to recover their legal status. Three circumstances can occur for the re-registration: 1) if the company was dissolved for not paying the Corporate Tax, 2) for the expiration of the company’s legal term (according to the Law of Corporate Tax), or 3) for the expiration of the company’s legal term as stipulated in the public deed of incorporation of the company, according to article 201 of the Costa Rican Commerce Code.

For the re-registration to proceed, Law Number 10255 indicates that a request must be made to the National Registry within a term not exceeding three years after the declaration of the company’s dissolution. The legal representatives must make this request of the dissolved company if payment of all the pending amounts is paid, the principal sum of the tax obligation, fines, sanctions, and related interest.

Another important aspect of this Law is the provisions of article 6, which adds article 7 bis to the Law of Corporate Tax. This reform establishes that if re-registration proceeds due to the payment of debts previously paid by the legal representative of the company, and it is dully re-registered in the Legal Entities Registry, the company must also comply with the Law to Improve the Fight against Tax Fraud (Law Number 9416), about submitting the Declaration of Shareholders Registry and Ultimate Beneficiaries within a legal period not exceeding two months.

Finally, according to the Transitional Provisions of this Law, it is established that the Executive Power must issue a regulation that includes the re-registration request within the next three months of the start of the full force of this Law. Also, if the companies were declared dissolved five years before the full power of this law, the legal representatives can request the re-registration if they comply with this law’s requirements. This regulation has not yet been published; therefore, this Law does not have the possibility of being applied until the respective code is issued.

This Law must not be confused with another law published in 2017, where the re-registration of dissolved companies by debts was allowed but having paid the Corporate Tax no later than December 15^th, 2017, once this date ended, the possibility of re-registration given by that law was no longer available. This new law, Law Number 10255, does not count with a specific term to comply with the payment, which means that almost all dissolved companies can be re-registered before the Legal Entities Registry.

Inactive Companies Income Statement

Jan 16, 2022 | Commercial Law, Taxes

On the 20th of December 2021, the Ministry of Finance issued a statement indicating that as of the 1st of January 2022, a simplified form will be available for the declaration of the Income Tax of Inactive companies.

This procedure will be carried out virtually through the Virtual Tax Administration (ATV) platform, which can be found on the official Ministry of Finance website. The document available to make this declaration is Form D-101 (Simplified Income Tax Declaration), in which information for the fiscal periods of years 2020 and 2021 will be declared.

The legal ground for this operation is indicated by the Law for the Strengthening of Public Finances (Law No. 9635) in article 2 subsection a). This regulation obliges all legal entities to comply with the Income Tax declaration, regardless of whether they carry out lucrative activities or not.

As stated above, inactive companies will be considered as taxpayers and will be assigned the code 960113, which is intended to identify companies that do not carry out income-generating activities in Costa Rica. These non-profit companies, which will now be considered as taxpayers, must comply by presenting the Form D-101.

Inactive companies are understood as those legal entities that do not carry out generating economic activities at a national level, in other words, companies that do not produce profits or generate income. Companies that only have the purpose of owning some asset, being a vehicle, a house, shares, or other types of assets.

Before making this declaration, interested legal entities may consult the tax situation of their companies to make sure they remain in order. This consultation can be done on the Ministry of Finance official website, in the Tax Situation Consultation section.

It is worth noting the term provided by tax authorities to present this declaration. According to the statement provided by the Revenue Office, inactive companies have a two-month and fifteen-day period to comply with this obligation, which will begin to be computed from 1st of January, 2022 and expires on the 15th of March of this year (2022).

At last, it is important to take into account that to carry out this operation, the information regarding the legal representatives and the registered offices of the inactive companies must be up to date. This means that the information can be verified by the Tax Administration and must be real, thus proceeding with the filing of the Simplified Income Tax Return for the aforementioned fiscal periods of the years 2021 and 2021.

An important aspect to consider is whether the company has active assets or non-registered assets or if these are only found in its accounting books. At this time, it is highly important to be updating the value of the company’s assets. While it is true that a person can make a statement with basic accounting knowledge, it is preferable always to be assisted by a professional.

This type of declaration should not be confused with other tax obligations such as the payment of the tax on legal entities, the declaration of real estate or the solidarity tax for the strengthening of housing programs (ISO) and the municipal taxes; For example, a person who has a house registered in an inactive company would be responsible for paying the following taxes: a) land taxes. b) municipal taxes. c) taxes of legal entities and d) in case its value is included within established law terms, it would also have to pay the solidarity tax for the strengthening of housing programs (ISO).

In case of having an inactive company whether having registered assets or not, do not hesitate to contact us. Our commercial partner AG BPO SERVICES can help you make the declaration.

Legal and Tax Implications for Inactive Companies In Costa Rica

Jan 19, 2021 | Commercial Law, Taxes

[fusion_builder_container hundred_percent=”no” hundred_percent_height=”no” hundred_percent_height_scroll=”no” hundred_percent_height_center_content=”yes” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” status=”published” publish_date=”” class=”” id=”” link_color=”” link_hover_color=”” border_color=”” border_style=”solid” margin_top=”” margin_bottom=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” enable_mobile=”no” parallax_speed=”0.3″ background_blend_mode=”none” video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” video_preview_image=”” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ type=”legacy”][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” hover_type=”none” border_color=”” border_style=”solid” border_position=”all” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”” margin_bottom=”” background_type=”single” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” background_blend_mode=”none” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_type=”regular” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ last=”true” border_sizes_top=”0″ border_sizes_bottom=”0″ border_sizes_left=”0″ border_sizes_right=”0″ first=”true”][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

In past years it was very common to use inactive companies as a legal structure to protect assets. The foregoing, because it was a corporate figure that was exempt from certain tax requirements, unlike those that develop a commercial activity.

Because of the entry into force of the Law on Strengthening Public Finances (Ley de Fortalecimiento de las Finanzas Públicas) in 2018, the benefits of using an inactive company as a corporate vehicle for the protection of assets, undergoes a significant shift. The above, because it converts this type of companies into taxpayers and it forces them to comply with 5 tax requirements, which are the detailed as follows:

FILING OF D-140 FORM: Once an inactive company is dully incorporated before the Costa Rican National Registry, it must file before the Tax Authority an update of the information regarding its legal representative or representatives and its tax address. Additionally, the company must be registered under the economic activity of “Legal persons incorporated in the country that does not carry out economic activity of a Costa Rican source”, which is governed by code 960113. It is important to consider that in the event of non-compliance with this first post-incorporation requirement, the company is exposed to a sanction. Lastly, this requirement must be complied within the period of 10 business days from the incorporation of the company.

CORPORATE TAX: This is a tax must be paid annually, during the month of January of each year. The amount to be paid varies from year to year and can be paid from any digital platform of the banks registered in the national financial system. The amount to be paid varies depending on whether it is an inactive company or an active company.

EDUCATION AND CULTURE STAMP: This tax It is included with the legal expenses at the incorporation of the company. Subsequently, this tax must be paid annually between the months of February and March of each year. The net capital reported in the Income Tax return of the immediate prior fiscal year, is used as the basis for calculating such tax.

ULTIMATE BENEFICIARY OWNERSHIP DECLARATION (UBO): This declaration is filed annually during the month of April before the Central Bank of Costa Rica. The purpose of this declaration is to indicate who is the final beneficiary (physical person) who is owns company. The omission this requirement carries out several sanctions to the company, such as a pecuniary fine, the non-issuance of good standing certifications and the non-registration at the Costa Rican National Registry of documents in relation to the company.

INCOME TAX RETURN (FORM D-101): One of the most important modifications that are introduced with the aforementioned law, is the filing of the Income Tax Return, in which the capital stock, assets and liabilities of the inactive company must be stated. This declaration will be taken as the basis for the calculation of the Corporate Tax, Education and Culture Stamp and other future tax liabilities. The failure to submit this declaration form entails financial penalties and in the face of an audit by the Tax Authority, the company would be exposed to an additional penalty for the increase of the corporate assets without justification. This requirement must be submitted annually and expires on March 15.

In conclusion, with the introduction of these new tax requirements that all inactive companies must fulfill, this promotes to maintain the corporate information updated. The above, because these companies stopped being simple holders of assets and from now on, they are subjected to a meticulous tax inspection. Therefore, the only way to avoid this type of sanctions is to keep everything in order and in compliance as if the said company, would be developing a commercial activity like any company called “active”.

TAX OBLIGATIONS INACTIVE COMPANIES	DUE DATE
FILING OF D-140 FORM	10 business days from the incorporation of the company before the CR National Registry,
CORPORATE TAX	January 31st
EDUCATION AND CULTURE STAMP	From February to March
UBO	April 30th
INCOME TAX RETURN (FORM D-101)	March 15th

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Registry of Shareholders of Legal Entities is Mandatory in Costa Rica

May 10, 2020 | Commercial Law, Taxes

[fusion_builder_container hundred_percent=”no” hundred_percent_height=”no” hundred_percent_height_scroll=”no” hundred_percent_height_center_content=”yes” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” status=”published” publish_date=”” class=”” id=”” link_color=”” link_hover_color=”” border_size=”” border_color=”” border_style=”solid” margin_top=”” margin_bottom=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” enable_mobile=”no” parallax_speed=”0.3″ background_blend_mode=”none” video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” video_preview_image=”” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” hover_type=”none” border_size=”0″ border_color=”” border_style=”solid” border_position=”all” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”” margin_bottom=”” background_type=”single” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” background_blend_mode=”none” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_type=”regular” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ last=”no”][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

The Law to Improve The Fight Against Tax Fraud (Law N° 9416) obliges legal entities, third party resource managers, nonprofit organizations and private trust, to register all the shareholders or final beneficiaries in the Registry of Transparency and Final Beneficiaries managed by the Central Bank of Costa Rica (BCCR). Said obligation applies as of September first of 2019, the compliance of this obligation will be carried out gradually, taking into account the last number of the registration ID number.

Las digit of the registration number	Registry month
0 and 1	September 2019
2 and 3	Octuber 2019
4 and 5	November 2019
6 and 7	December 2019
8 and 9	January 2020

Excluded from this requirement are companies whose shares are listed on the stock market, whether domestic or foreign; public trusts (those in which the State participates); financial entities; legal entities; third-party resource managers and legal structures supervised by the General Superintendency of Financial Entities (SUGEF), General Superintendency of Securities (SUGEVAL) or by the General Superintendency of Pensions (SUPEN), regarding to its depositors, clients and investors; the Supreme Powers, the Supreme Electoral Court; centralized, decentralized, autonomous and semiautonomous public entities; and the embassies.

The person responsible of providing this information is the person authorized by law to act on behalf of the obligated parties. If it’s a legal entity, the representative; if it’s a trust, the trustee; for the managers of third-party resource, the manager; in non- profit organizations, the president or the person how exercises the representation. The person responsible must have a valid digital signature certificate. The following alternatives are offered for the foreigners who do not have a Costa Rican residence card, and as a consequence, cannot opt for a digital signature:

Another person that can opt for a digital signature can be appointed as a representative.

Granting of a special power of attorney by public deed. It must be granted by digital testimony with the indication of the validity of the power granted.

In order to have a digital signature card, an appointment must be requested at any of the offices authorized by the BCCR. The information of the cost, hours of attention, geographical location and telephone numbers, can be consulted in the Services Section, Digital Signature, of the Central Bank page, which can be consulted at the following address: https://www.bccr.fi.cr/seccion-firma-digital/firma-digital/oficinas-de-registro.

Those responsible for providing the information must register the necessary information to identify all the participations and final beneficiaries, the information provided will have for all legal purposes the effects of an affidavit. If there are legal entities domiciled abroad, information must be provided concerning all the participations and final beneficiaries, otherwise it is presumed that the final beneficiary is the administrator.

The information that must be provided is the following:

Data of the person who exercises an influence of 15% or more of the total capital or control direct or indirectly on the legal entity.

Composition of voting rights.

The data of the persons who have the right to appoint or dismiss most of the administrative or supervisory boards.

The data of the persons that have the control condition according to the constitutive pact.

If it’s a trust: the object of the contract, the trustor, trustees and beneficiaries.

Branches or foreign agencies of international non-profit organizations must also be registered. In case the donors and recipients or beneficiaries of the contributions are a legal entity, the data that identify them is sufficient.

In order to comply with the declaration of the shareholders and final beneficiaries, the person in charge must previously register on the platform called “Central Directo”, at the following address: www.centraldirecto.fi.cr. Once the legal representative subscribes to this platform, they can proceed to make the respective declarations. Once the declaration is submitted the BCCR will notify compliance with the declaration to the email address indicated as means for notifications.

The updating of data is done ordinarily once a year, between the first and the thirty of April. Extraordinarily within 15 business days from the day of the annotation in the respective book. Upon the expiration term, the General Tax Administration will notify the compelled that the information was not provided so that they can fulfill their duty. In accordance with the article 84 bis of the Tax Rules and Procedures Code, will grant them a 3 business days period to correct the situation, otherwise the respective pecuniary penalty will be applied

“Article 84 bis: (…) an equivalent pecuniary fine of two percent (2%) of the gross income of the legal entity, of the period prior to that in which the infringement occurred, with a minimum of three base salaries and a maximum of one hundred base salaries (…)”

The access to the information of the platform will be controlled by the BCCR. The institutions authorized to review the information are the Ministry of Finance and the Costa Rican Institute on Drugs (ICD), with the prior authorization of the BCCR. Additionally, the BCCR will develop a platform for citizen consultation so that any individual can know if it was included or not in the Registry, for which a digital signature certificate will be necessary. People who consider that the information is not current, true or accurate, may request corrections, either asking the person in charge of providing the information to make the corrections or go before a Contentious Administrative Judge and request that the corrections are made.

The National Registry will not be able to issue certifications of good standing and will not register documents in favor of the obligated subjects that are in the list of non-compliers. The Notaries Public that issue documents to the obligated subjects must verify the list of non-compliers and if they are included, they must record this condition in the document.

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Important Aspects of the Corporate Taxes Law N°9428 (Costa Rica)

May 2, 2020 | Commercial Law, Taxes

[fusion_builder_container hundred_percent=”no” hundred_percent_height=”no” hundred_percent_height_scroll=”no” hundred_percent_height_center_content=”yes” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” status=”published” publish_date=”” class=”” id=”” link_color=”” link_hover_color=”” border_size=”” border_color=”” border_style=”solid” margin_top=”” margin_bottom=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” enable_mobile=”no” parallax_speed=”0.3″ background_blend_mode=”none” video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” video_preview_image=”” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” hover_type=”none” border_size=”0″ border_color=”” border_style=”solid” border_position=”all” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”” margin_bottom=”” background_type=”single” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” background_blend_mode=”none” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_type=”regular” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ last=”no”][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

Field of application

To all corporations, to the representatives or branches of foreign corporations and to LTDA/SRL companies; it applies to both the corporations that are already registered as well for the ones that are going to be registered in the Mercantile National Registry.

Payment

Each tax period will be counted from January 1° to December 31° of the same year.

For the entities that are already registered, the tax will generate on January 1° of each year and the payment has to be done during the next 30 days counted from January 1° of each year.

As for the entities that are set up during the year, the taxes have to be paid in the next 30 days counted from the day of submission of the public deed of Constitution of the Corporation before the National Registry. The rate has to be proportional to the time left between the date of submission of the deed and the end of the tax period. The discount stated in the Law of Taxation of the National Registry will not apply.

The tax is paid through the means, forms and conditions stablished for this purpose by the National Tax Office.

Rates

The law lists four scenarios under which the rate that must be paid is established:

The corporations that are registered in the Registry of Corporations, but not in the Unique Tax Registry of the General Directorate of Taxation, must pay an amount equivalent to 15% of a monthly base salary (office worker 1) according to the second article of the Law N°7337.

Taxpayers of the utility tax who have declared a gross income lower than one hundred and twenty base salaries regarding the utility tax of the last period, must pay an amount equivalent to 25% of a monthly base salary.

Taxpayers of the utility tax who have declared a gross income between a hundred and twenty and two hundred and eighty base salaries regarding the utility tax of the las period, must pay an amount equivalent to 30% of a monthly base salary.

Taxpayers of the utility tax who have declared a gross income equal or superior than two hundred and eighty base salaries regarding the utility tax of the last period, must pay an amount equivalent to 50% of a monthly base salary.

The legal representatives of the corporations are jointly responsible for the neglect of payment of the taxes stablished in the Law.

Sanctions

In case of non-compliance, the Code of Rules and Procedures of Taxes.

The National Registry will not be able to issue certifications, nor register any document in favor of taxpayers who are not up to date with the payments of this tax. Notary Public that issue certifications to the overdue taxpayers must record this condition in the respective document.

The overdue taxpayers cannot contract with the Government or any public institution.

The debts derived from this tax will constitute preferential legal mortgage or preferential liens on the corporation assets.

The neglect of payment for 3 consecutive periods is cause of dissolution. The National Tax Office will send to the National Registry a report of the taxpayers that did not payed the taxes, so that the National Registry can proceed with the cancelation of registry and asset annotation.

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]