Starting a Business in Costa Rica
Foreigners can legally own and operate businesses in Costa Rica. The process involves working with a Costa Rican notary-lawyer, registering with several government entities, and meeting ongoing tax and licensing obligations. Understanding the structure before you start saves significant time and cost.
Can foreigners start a business in Costa Rica?
Yes. There are no citizenship or residency requirements to own a business entity in Costa Rica. Foreigners can be majority shareholders in a Sociedad Anonima (S.A.) or Sociedad de Responsabilidad Limitada (S.R.L.) without being residents. However, to actively work in or manage the business on Costa Rican soil you will need appropriate residency or a work permit.
Business Structures
The two most common structures for foreigners are the S.A. and the S.R.L. Both provide limited liability and are commonly used. Your attorney will advise on which best fits your situation.
| Feature | Sociedad Anonima (S.A.) | Sociedad de Responsabilidad Limitada (S.R.L.) |
|---|---|---|
| Equivalent to | Corporation | Limited Liability Company (LLC) |
| Minimum shareholders/partners | 2 shareholders | 2 partners (up to 25 maximum) |
| Management | Board of directors required (presidente, secretario, tesorero) | Managed directly by partners (gerente) |
| Transferability of shares | Shares freely transferable | Transfer of quotas requires partner approval |
| Complexity | More formal structure, more paperwork | Simpler administration, fewer formalities |
| Privacy | Shareholders listed in Registro Nacional | Partners listed in Registro Nacional |
| Most common use | Larger operations, holding real estate, investor structures | Small businesses, family businesses, professional services |
| Annual corporate tax | ~$400–600/year | ~$400–600/year |
Sole Proprietorship (Empresario Individual)
A sole proprietorship is possible but uncommon among foreigners because it offers no liability protection — your personal assets are exposed to business debts. Most attorneys recommend forming an S.R.L. even for small operations because the cost difference is minimal and the liability protection is significant.
The Registration Process
All business formation in Costa Rica goes through a notario publico — a lawyer who is also a licensed notary. You cannot file directly with the government without one. Budget 4–8 weeks from start to having an operational cédula jurídica.
Engage a Notario Publico
Your lawyer drafts the corporate charter (pacto social) and articles of incorporation. You will need to provide shareholder IDs (passports for foreigners) and agree on the ownership structure.
File with Registro Nacional
The notary files the incorporation documents with the National Registry. This assigns your company's cédula jurídica (tax ID number) and records the official shareholders and board.
Register with Ministerio de Hacienda
Register as a taxpayer with the tax authority to obtain your tax regime and RUC number. Required before you can invoice or open a bank account.
Register with CCSS
If you will have employees, register with the Caja (CCSS) as an employer. This is mandatory before hiring and must be maintained with monthly payroll declarations.
Obtain a Municipal Patente
Apply for a business operating license (patente) from your local municipality. Requirements vary by municipality and business type. Renewed annually.
Sector-Specific Permits
Depending on your industry: ICT registration for tourism, SENASA permits for food handling, MINAE permits for environmental impact, or health ministry permits for certain businesses.
Estimated Setup Costs
Business Formation — Estimated Costs (USD)
Currency: USDAnnual Obligations
Annual Corporate Tax — Even Inactive Companies
Every legal entity registered in Costa Rica — including dormant companies with no activity — must pay the annual impuesto a las personas juridicas (corporate entity tax). Failure to pay results in the company being listed as inactive in the registry, which can block bank transactions and real estate transfers. The amount is based on the company's declared income: approximately $170/year for companies with no income, up to ~$600/year for active companies. Verify current rates with your accountant as they are adjusted periodically.
Annual Compliance Checklist
- Pay impuesto a las personas juridicas (January)
- File income tax return — deadline March 15
- Renew municipal patente annually
- File monthly VAT (IVA) returns if applicable
- Keep accounting records and receipts (comprobantes electronicos)
Electronic Invoicing
Costa Rica mandates electronic invoicing (facturacion electronica) for all active businesses. Your accountant will set up the system with Hacienda. Every sale must generate a digital invoice through the approved system — paper invoices alone are no longer accepted.
Non-compliance with electronic invoicing requirements results in fines and can complicate your tax filings. Budget approximately $30–80/month for an invoicing software subscription.
Opening a Business Bank Account
A business bank account requires your cedula juridica and is significantly easier to open after full company registration is complete. State banks (BCR, BN) are thorough but slow. Private banks offer more flexibility.
BAC Credomatic
BAC Credomatic is widely considered the most foreigner-friendly bank for business accounts. Required documents typically include the cédula jurídica, certified copies of the pacto social, IDs for all board members or partners, and a letter explaining the nature of your business. Some branches require an appointment and proof of business activity. Expect 2–4 weeks for account opening.
Popular Business Types for Expats
Rental Property & Real Estate
Managing long-term or vacation rentals through a Costa Rican S.A. or S.R.L. is one of the most common expat business structures. Provides clean ownership records and simplifies tax reporting for rental income.
B&B, Hotel & Hospitality
Requires ICT registration as a tourism accommodation provider. Health and safety inspections are required. Properties near beaches or national parks may face additional environmental and zoning restrictions.
Tour Operations
Must be registered with ICT (Instituto Costarricense de Turismo). Guides operating tours in national parks require SINAC authorization. Surf schools typically operate under a combination of ICT and municipal permits.
Food Service & Cafe
Requires a SENASA health permit (Ministerio de Salud), municipal patente, and compliance with food handling regulations. Inspections occur periodically. The permitting process can take 3–6 months for new establishments.
Free Trade Zones (Zona Franca)
Companies operating in Zona Franca (Coyol, La Lima, El Coyol) benefit from significant tax incentives including income tax exemptions. Primarily for manufacturing and qualifying services companies. Requires PROCOMER approval and meeting minimum investment thresholds.
Remote Consulting via CR Company
Some digital professionals form a Costa Rican S.R.L. to invoice international clients through a local entity. This has tax implications and should be structured carefully with an accountant to avoid creating unintended tax liabilities.
Common Legal Pitfalls
Silent partner arrangements — where a local acts as the registered owner while you are the real beneficial owner — are not legally enforceable in Costa Rica. If the named owner disputes the arrangement, you have no legal recourse. Always be a formal, registered shareholder.
Absentee management: Leaving a business without proper on-the-ground management creates compliance failures (unpaid CCSS, missed tax deadlines, lapsed permits) that compound quickly and are expensive to resolve.
Tax compliance: Hacienda (the tax authority) has significantly upgraded its enforcement systems. Working with a licensed contador (accountant) is not optional — it is essential to avoid fines and maintain your company's good standing.