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Investing in Costa Rica

How to Invest in Costa Rica

Once you have set your mind as to what business you are going to set up in Costa Rica, you need to be aware of the forms and other processes that you need to do in order to legally set up your business in the country. Local lawyers in Costa Rica suggest that you must avail a Costa Rica corporate entity as opposed to the foreign entity. This is due to the fact that the process is more complicated and that it may take longer to finish. It must be stressed, however, that foreign corporate entities have the ability to own lands and conduct business in the country.

If you will still pursue with applying for a business permit as a foreign entity, you need to go to the Costa Rica Commercial Register and sign up as a branch. Also include the powers of attorney in the department. Basically this process will take several weeks since it requires special and formal procedures.
Going back to the registration local corporate entity, two forms are needed to be filled up. These forms are called “Sociedad Anonima” (SA) and “Sociedad de Responsabilidad Limitada (SRL).” You can refer with your attorney as to how these forms should be filled up and processed. Here’s the detailed information of each form:

• SRL is said to be a simpler form compared to SA. This particular form is used if the following features are appealing to the investor (you):
- The shares can’t be transferred to non-shareholders without the approval of other shareholders. This means that the latter has the priority right to refuse said purchases.
- One individual manages the company (manager). This is applicable to investors who prefer not to divulge additional individuals running the company to the public.

• SA is the most commonly used form when it comes to Costa Rica’s corporate structure. It is said to be very flexible with extensive legal treatment. Here are some of the features of this form:
- Aside from the mandated positions in the company such as President, Treasurer and Secretary, the company must also specify at least three members of the Board of Directors (BODs) and one comptroller. These posts don’t necessarily hold powers of attorney in behalf of your company.
- Physical documents must show the shares of each personnel. As mentioned earlier, non-shareholders can’t purchase shares without the consent of the shareholders. Transfer contracts and share certificate endorsements must be created before share transfers can be done.

The company’s by-laws may be changed from time to time. This also applies to the powers of attorney. This can be done through a shareholders meeting. Shareholders or individuals representing the shareholders will attend this meeting to vote on amendments.

Companies should come up with three corporate books. These books are intended for: board of directors (BODs), shareholders registry book and shareholders meetings. Three accounting books must be made as well.
Accordingly, the aforementioned books must get the authorization by the tax authorities. These also serve as major requirements when changes in corporation structure or company by-laws are made.
By the way, companies based in Costa Rica must register to the tax authorities. Formal tax registration may not be required if the company did not conduct business activities in the country for a specific fiscal year although this still needs certification.

The fiscal year for tax declaration of companies in Costa Rica runs from October 1 until September 30 of the following year. It must be noted that filings can be done until the last day of December. There may be different fiscal year imposed on other companies. This may be due to the term implemented in their respective countries of registration (e.g. regional headquarters).

It is important to take note that investors must think first of what business to undertake before coming up with choices of corporate structures. This is very important since in your case, you will be investing a lot of money in this undertaking. It must be successful implemented in order for your company to operate smoothly and without problems with the authorities in Costa Rica.
 

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Property purchase guidelines in Costa Rica

It is without a doubt, a great investment to purchase a property in Costa Rica. This is due to the fact that the country is currently enjoying a boom in real estate. This means that properties are being sold at reasonable rates. Surely, you envision yourself having your very own house or condo in this Latin American paradise. A lot of people are sharing your feeling right now, including the retirees who are thinking of spending their remaining years peacefully in Costa Rica.
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