Costa Rica is a country that is reputed to be the safest and most business friendly of tax havens in Latin America for new businesses, offshore investments and offshore incorporation. Costa Rica treats onshore and offshore businesses in the same manner. The basis of taxation is territorial, with both residents and non-residents paying tax on Costa Rican income, while foreign-source income is not taxed.
Costa Rica is located in the centre of the American Continent and lies just above Panama. The capital and financial centre is San Jose. Costa Rica is one of the most discreet offshore centers in the world and enjoys economic and political stability making it a popular tax haven. Its legal system is based on the Spanish Civil Law.
Features and advantages of offshore incorporation in Costa Rica
- Territorial taxation
- Provided that the offshore company activities are carried on outside of Costa Rica, the offshore company will not be subject to any income taxes therein. There is no double tax treaties, thus no information exchange regarding the goods and services transferred. There is no reporting or accounting requirements for offshore company in this tax haven.
- Note. A new tax of US$ 300 was introduced in 2012. New companies incorporated should pay it on incorporation.
- Tax free trading with the US
- The recently approved Central America Free Trade Agreement with the United States will enable any Costa Rican company to trade with the US markets tax free, which opens to any company one of the biggest markets in the world. Similar Agreements were signed with Canada, Mexico, Chile. The Agreements with China and EC are being discussed.
- Name Restrictions
- Offshore companies names can be in Spanish and English and must end with S.A., to denote limited liability.
- Trading Restriction
- A Costa Rican company is not permitted to carry out banking, insurance, mutual fund management, public investment management or any associated activity.
- Gaming Activities. Gambling license
- In Costa Rica there is no specific gambling license for gaming activities or Casinos online. Corporation that execute online gambling or online casino activities work under a "data processing license". To obtain this license the corporation must have a physical location in Costa Rica. Please ask for more information on how to obtain a "data processing license" if you are interested in gaming or gambling.
Fees
- The fees will depend on your order structure. Incorporation of offshore company in Costa Rica is an essential part however other services like notarized translation of main documents in English; services of registered agent and registered office for the first year of the offshore company existence are also very imoprtant for your future company legal existence.
- Please send us a query and we will be happy to respond with all details.
The following information will be required for the incorporation:
- Basic due diligence for the company beneficiaries, directors, shareholders inclusive of ID copies, address proof, etc.
We can offer a variety of additional services related to the incorporation. Listed briefly they are as follows:
- assistance with opening an offshore bank account (funds can be controlled remotely via Internet. Credit cards are available);
- provision of mail forwarding address in Europe, USA. Mail is collected and forwarded (such an address may be necessary to receive sensitive business and private mail, e.g. bank correspondence, etc.
Please advise if you wish to proceed with offshore incorporation in Costa Rica. We will send an application form and assist with the completion.
FAQ
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.
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.
- Links to the income tax law of Costa Rica (in Spanish):
The Income Tax Law [Ley del Impuesto Sobre La Renta # 7092]- The Regulations to the Tax Law [Reglamento Decreto 18455-H]