Costa Rica Company Formation & Shelf Companies

Costa Rica Company Formation: Incorporation, Shelf Companies, and LLCs

Outline

Why Choose Costa Rica for Company Formation?

Benefits of Costa Rica Company Incorporation
Is Costa Rica a Tax Haven?

Types of Companies in Costa Rica

LLC in Costa Rica (Sociedad de Responsabilidad Limitada – S.R.L.)
Stock Corporation (Sociedad Anónima – S.A.)
Shelf Companies Costa Rica

Step-by-Step Company Formation Costa Rica

Incorporation Process in Costa Rica
Required Documents and Compliance

Costa Rica Offshore Options and Banking

Costa Rica Offshore Company Features
Costa Rica Offshore Banking

FAQs
Conclusion

Why Choose Costa Rica for Company Formation?

Benefits of Costa Rica Company Incorporation

Territorial Tax System: Only income generated within Costa Rica is taxed; foreign-source income is exempt, making Costa Rica attractive for international business.
Fast Incorporation: Company formation in Costa Rica can be completed in a few days to several weeks, depending on the structure and agent used.
Low Minimum Capital: Minimum capital requirements are symbolic (as low as USD 1–20), lowering barriers to entry.
Foreign Ownership: 100% foreign ownership is allowed, and both individuals and legal entities can be shareholders.
Privacy: Shareholder and director information is not publicly disclosed, ensuring confidentiality.
Flexible Structures: Both LLCs and S.A.s are available, with shelf companies Costa Rica offering immediate business readiness.

Is Costa Rica a Tax Haven?

While Costa Rica is not a classic tax haven, its territorial tax system, privacy protections, and ease of offshore company formation have led some to consider it a moderate tax haven for international entrepreneurs. However, it maintains compliance with international standards and does not offer the secrecy of traditional offshore jurisdictions.

Types of Companies in Costa Rica

LLC in Costa Rica (Sociedad de Responsabilidad Limitada – S.R.L.)

Requires at least two members (shareholders).
Limited liability for all members; their risk is limited to capital contributions.
Managed by one or more managers (no board required).
Company name must include “S.R.L.” or “LLC”.
No minimum capital requirement; capital divided into quotas.
Registered office and local agent are mandatory.

Stock Corporation (Sociedad Anónima – S.A.)

Most common entity for both local and offshore business.
Requires at least two shareholders and a board of three directors (president, secretary, treasurer).
No minimum capital required.
Shares are easily transferable; ideal for larger or more complex ventures.

Shelf Companies Costa Rica

Ready-made, pre-registered companies available for immediate use.
Allow entrepreneurs to bypass the standard registration period and start business operations right away.
Both S.A. and S.R.L. shelf companies are available.

Step-by-Step Company Formation Costa Rica

Incorporation Process in Costa Rica – for your information only. We will do all the necessary.

Choose Company Type: Decide between S.A., S.R.L., or shelf company.
Name Reservation: Select a unique company name, check availability, and reserve with the Registro Público.
Draft Incorporation Papers: Prepare articles of incorporation, including company name, objectives, capital, and management structure.
Notarization: Founders sign documents before a Costa Rican notary public.
Register with Companies Register: File documents with the Mercantile Registry Section of the Public Registry.
Obtain Tax ID: Register for a company tax number and, if needed, social security and occupational risk insurance.
Legalize Company Books: Seal accounting and corporate books with the Revenue Administration.
Publication: Announce incorporation in Costa Rica’s legal newspaper, La Gaceta.
Receive Registration Number: Obtain the “cédula de persona jurídica” to begin operations.

Required Documents and Compliance

Shareholder and director identification
Registered office address
Appointment of local agent (lawyer)
Articles of incorporation (with Spanish translation if needed)
Minimum capital declaration (no strict minimum)
Payment of government fees (approx. $50 for incorporation)

Costa Rica Offshore Options and Banking

Costa Rica Offshore Company Features

Offshore Costa Rica companies benefit from tax exemption on foreign income, limited liability, and privacy.
No distinction between onshore and offshore companies; the territorial tax system applies to all.
Trustee and nominee services are permitted.

Costa Rica Offshore Banking

Offshore banking is available for Costa Rica companies, providing access to international financial services.
Local and international banks require compliance with due diligence and KYC regulations.

FAQs

How long does Costa Rica company formation take?
From a few days (with shelf companies) up to 4–6 weeks for new incorporations, depending on the agent and registry.

What are shelf companies Costa Rica?
Pre-registered companies available for immediate purchase and use, ideal for urgent business needs.

Can foreigners own 100% of a Costa Rica company?
Yes, there are no restrictions on foreign ownership for either S.A. or S.R.L. entities.

Is Costa Rica a tax haven?
Costa Rica is not a classic tax haven but offers territorial taxation and privacy, making it attractive for international entrepreneurs.

What is required for LLC formation Costa Rica?
At least two members, a registered office, local agent, and notarized incorporation documents.

What are the most popular business entities in Costa Rica?

Corporation (Sociedad Anonima - S.A.) is the most common legal entity in Costa Rica. It offers limited liability protection to shareholders and requires a minimum of two shareholders.
Limited Liability Company (Sociedad de Responsabilidad Limitada - S.R.L.) is another common legal entity in Costa Rica. It also provides limited liability protection to its members and requires a minimum of two members.

Is Costa Rica a blacklisted jurisdiction? Is it on the EU list of non-cooperative jurisdictions?

Yes, Costa Rica was previously included on the European Union's list of non-cooperative jurisdictions for tax purposes, commonly referred to as the "blacklist." It was added to this list on February 14, 2023, due to its failure to address certain harmful aspects of its foreign source income exemption regime.

However, Costa Rica has since made reforms to its Income Tax Law to comply with EU requirements. As a result, it was removed from the blacklist in October 2023 and is now listed in Annex II, which indicates that it is under monitoring but is no longer considered non-cooperative.

What are the advantages of starting a business in Costa Rica?

Territorial Tax System: Costa Rica follows a territorial tax system for corporate income. This means that only income generated within Costa Rican territory or income that involves the use of the country's infrastructure is subject to taxation.

Investment-Friendly Environment: Costa Rica has a stable economy and is considered an investment-friendly destination. The government actively promotes and encourages foreign investment, offering incentives such as import duty and tax exemptions. Recent measures have been introduced to further encourage foreign direct investment (FDI) by reducing taxes and easing residency requirements for investors.

Business-Friendly Culture: Costa Rica has a business-friendly culture that welcomes foreign entrepreneurs. Unlike many other countries, there are no restrictions on foreign business ownership, and you don't need to be a resident to start your own business

Strategic Location: Costa Rica's strategic location in Central America provides access to regional markets and trade opportunities. The country offers ports on both the Pacific and Caribbean coasts, as well as international airports, facilitating business operations and logistics.

Conclusion

Costa Rica company formation offers a blend of flexibility, privacy, and tax efficiency for both local and international entrepreneurs. Whether you choose an LLC in Costa Rica, a stock corporation, or opt for shelf companies Costa Rica, the incorporation process is straightforward and accessible. With its territorial tax system and robust legal framework, Costa Rica stands out as a strategic destination for global business and offshore solutions.

Please let us know if you are considering incorporation in Costa Rica. We will register your company, provide the annual support and will try to be of help any time you may need it.

Links to the income tax law of Costa Rica (in Spanish):

The Income Tax Law [Ley del Impuesto Sobre La Renta # 7092]