Companies in Costa Rica
If you are an investor or planning to start a business in Costa Rica, deciding what type of company you may need is a crucial question.
Types of Companies in Costa Rica
- The Stock Corporation (Sociedad Anónima, S.A.)
- The Limited Company (Sociedad de Responsabilidad Limitada, LTDA or S.R.L.)
- The General Partnership
- The Limited Partnership
The most commonly used trading companies in Costa Rica are the S.A. stock corporations and L.T.D.A. limited liability companies.
Key Decisions When Forming a Corporation
- Corporate Name: The name of the company must be registered as a “trade name” with the intellectual property office. The National Registry of Costa Rica has undergone a reform, and now all companies are identified by a legal identification number assigned automatically when the company is created.
- Corporate Capital and Share Distribution: Amount, value per share, and distribution; capital is in colones.
- Corporate Domicile: Place designated to receive communications.
- Term: Number of years corporation will exist, commonly 99 years.
- Representation: The President represents the corporation by law; others may be appointed.
- Email Address: In addition, an email address must be provided, which will be the official means of notification to the company for general, legal, and administrative procedures.
Sociedad Anónima (S.A.)
How Does an S.A. Work?
An S.A. is similar to corporations in the US or public limited companies in the UK. It offers limited liability protection, so shareholders are responsible only for their investment.
Shares can be transferred freely without affecting operations. Agencies and branches can be established inside and outside Costa Rica.
Common in tourism, agriculture, and real estate. It is subject to 30% corporate tax on profits. Territorial principle applies; no tax on non-Costa Rican sourced income. VAT payable monthly, income tax yearly.
Managed by a Board of Directors (President, Secretary, Treasurer) and supervised by a Supervisory Director.
Incorporation of an S.A.
Requires minimum two shareholders; capital cannot be all in one name at incorporation but can be assigned later. Management by Shareholders Meeting, Board of Directors and supervisory entity. Shareholders may be foreigners; no Costa Rican required on board.
Must be incorporated before a notary and registered with the Public Registry. Suitable for international business.
Sociedad de Responsabilidad Limitada (LTDA – S.R.L.)
What is an LTDA?
A limited liability company popular for SMEs. It is a separate legal entity protecting owners beyond their investment amount.
Managed by one or more administrators appointed by quota holders, who may be shareholders or third parties responsible for management and legal representation.
Simpler structure than S.A. with fewer legal formalities. Minimum two quota holders (“cuotistas”). Capital divided into quotas registered by name. Requires at least one manager; sub-managers possible.
Suitable for SMEs and international business.
Incorporation of an LTDA
Requires at least two quota holders (individuals or legal entities). Capital divided into quotas; quota percentages must be properly certified. Quota transfers require approval respecting preemptive rights.
Differences Between S.A. and LTDA
| Aspect | Sociedad Anónima (S.A.) | Sociedad de Responsabilidad Limitada (LTDA) |
|---|---|---|
| Organization & Management | Board of Directors: President, Secretary, Treasurer Supervisory Director (independent oversight) |
Managed by Manager(s) appointed by quota holders. Supervision by Shareholders Meeting (self-inspection) |
| Representation of Social Capital | Capital divided into shares freely transferable by endorsement | Capital divided into quotas with restricted transfer requiring approval |
| Legal Books | Keep Minutes of General Meeting, Shareholders Register, Board Minutes | Keep Minutes of Quota Holder Meetings and Quota Holder Registry Book |
Frequently Asked Questions About Starting a Company in Costa Rica
Can a foreigner open a company in Costa Rica?
Yes. Foreigners can fully own and manage companies in Costa Rica. You do not need to be a resident to incorporate either a Sociedad Anónima (S.A.) or a Sociedad de Responsabilidad Limitada (LTDA).
What is the best type of company for international investors?
The S.A. (Sociedad Anónima) is often preferred for international business and real estate projects due to its share transfer flexibility and board structure. However, the LTDA is ideal for small and medium-sized enterprises.
What are the legal requirements to form a company in Costa Rica?
You need at least two shareholders (or quota holders), a registered address, a legal representative, and a resident agent if no board members reside in Costa Rica. The company must be notarized and registered at the Public Registry.
What is the difference between S.A. and LTDA in Costa Rica?
The main difference lies in management and capital structure. An S.A. has a Board of Directors and freely transferable shares, while an LTDA is simpler, with capital divided into quotas that require approval for transfers.
Do I need to travel to Costa Rica to incorporate a business?
No. With a power of attorney, AG Legal can handle the full incorporation process on your behalf, including registration, corporate bank account setup, and resident agent services.
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