If you are an investor or planning to start a business in Costa Rica, deciding what type o company you may need is a crucial question:

First of all, in Costa Rica, there are four types of companies:

  • The stock corporation (Sociedad Anonima).
  • The limited liability company. (LTDA.) (Sociedad de responsablidad limitada).
  • The general partnership.
  • The limited partnership.

The trading companies most commonly used in Costa Rica are the S.A. stock corporations and L.T.D.A. limited liability companies.

Before we enter to explain the two main types of companies, there are a few decisions that must be made in any corporation:

What will be the corporate name? This can be a fictitious name. Currently, it is also possible to register companies whose name consists of the corporate identity number assigned to them by the Registry.

What will be the corporate capital and share distribution? The available amount of capital, the value of each one of the shares, and how they will be distributed among the partners. The social capital must be established in the colon currency.

What will be the corporate domicile? The place designated to receive communications.

What will be the term of the corporation? It is required to determine the number of years the corporation will exist. The duration commonly used is 99 years.

Who will represent the corporation? By law, the President is the corporation’s representative, with the full power of attorney. Still, appointing people who want to represent the corporation is also possible.

Resident Agent. When the corporate representatives have no domicile in Costa Rica, it is mandatory to appoint a Resident Agent, whose function will be to receive communications addressed to the corporation.

Sociedad Anonima (S.A.)

How Does an S.A. Work?

In Costa Rica, S.A. stands for “Sociedad Anónima,” a business entity commonly used in the country. An S.A. is similar to a corporation in the United States or a public limited company in the United Kingdom.

The main advantage of forming an S.A. is that it provides limited liability to the company’s shareholders. This means that the shareholders are only responsible for the amount of money they have invested in the company and are not personally liable for its debts and obligations.

Another advantage of forming an S.A. is that it allows for an easy transfer of ownership. Shares in the company can be bought and sold without affecting the company’s operations or requiring the company to restructure. Agencies and branches may be established inside and outside Costa Rica and can perform all sorts of business.

You may want to acquire if you want to invest or develop an activity without using your assets to secure debts.

S.A. are commonly used in Costa Rica for businesses in various industries, including tourism, agriculture, and real estate. However, consulting with a lawyer before forming an S.A. is essential to ensure that it is the best business structure for your specific needs and circumstances.

An S.A. in Costa Rica is subject to corporate income tax and must file annual tax returns. The tax rate is currently 30% of the company’s profits.

Regarding its International taxation, for this type of company and any company in Costa Rica, the territorial principle is reining the taxation; this means that the company does not need to pay any income tax as long there is no costarican source involved. The V.A.T. is payable monthly, and the income tax is payable yearly.

In summary, S.A. is a type of business entity in Costa Rica that provides limited liability to its shareholders and allows for easy transfer of ownership. It is commonly used in various industries, and careful consideration should be taken before forming an S.A. to ensure it is the proper structure for your business. Depending on the type of business, even the company can work on offshore transactions.

Management of a corporation is conducted through a Board of Directors, which must include at least a President, a Secretary, and a Treasurer. The supervisory task is carried out by appointing a Supervisory Director.

Incorporation of an S.A.

  • A minimum of two shareholders is required to form a corporation, and registering the entire corporate capital in one person’s name is not allowed at the time of incorporation. Still, assigning all shares to one shareholder after the company’s registration in the National Public Registry is possible.
    Regarding the corporation’s management, there are 3 legal entities in the company: The shareholders meeting, the Board of Directors, and the supervisory entity. The Shareholder Meeting is the main organ comprised of the stockholders, which could be the common stockholder or privileged shareholders. Ordinarily, the Meeting meets once a year, and extraordinarily, as the need arises.
  • It is important to remark that the shareholders can be foreigners, and there is no need for a costa rican on the board of directors.
  • For the Board of Directors, a minimum of 3 people is required: President, Secretary, and Treasurer. Depending on the term of the appointment, the positions on the board of directors can be renewable.
  • Any company in Costa Rica must be incorporated before a notary public who will draft the articles of incorporation and then be registered before de Public Registry.

This company is suitable for carrying on international business.

Sociedad de Responsabilidad Limitada (LTDA – S.R.L.)

What is an LTDA.?

An LTDA company, also known as a Sociedad de Responsabilidad Limitada (SRL), is a limited liability corporation in Costa Rica. It is a popular business organization for the country’s small and medium-sized enterprises (SMEs).

The LTDA company is a legal entity independent of its owners or shareholders. It provides limited liability protection to its owners, meaning that they are not personally responsible for the company’s debts or legal obligations beyond the amount of their investment in the company.

The company’s management is carried out by one or more administrators who the shareholders appoint. The administrators can be shareholders or third parties responsible for managing the company’s affairs, making decisions, and representing the company in legal matters.

One of the main advantages of establishing an LTDA company in Costa Rica is the ease of administration and operation. It has a simplified structure compared to other types of companies, with fewer legal requirements and formalities to comply with.

Another advantage is the limited liability protection provided to the shareholders, this means their assets are protected in case of the company’s legal or financial issues.

The advantage of a limited liability company is that it has almost the same characteristics as a corporation. Regarding the independence of its assets, it works the same as a corporation. Forming a limited liability company requires a minimum of two quota holders (called cuotistas), and the company capital can later be transferred to one person. Its management only requires a manager, although a sub-manager may also be designated.

In conclusion, an LTDA company is a popular choice for SMEs in Costa Rica, offering limited liability protection and a simplified structure for management and operation. It is important to consult with legal and financial experts before establishing an LTDA company to ensure compliance with all legal requirements and to make informed decisions regarding the company’s administration and operation.

This company is suitable for carrying on international business.

How Does an LTDA.?

All sorts of business may be conducted. Its structure is used for businesses of a smaller dimension than that of an S.A. The L.T.D.A.’s Manager is the company’s representative with the full power of attorney, although it is possible to appoint several Sub-managers.

Incorporation of an LTDA.

To establish an LTDA company in Costa Rica, there must be at least two quota holders. These quota holders can be individuals or legal entities. The company’s capital is divided into equal parts, represented by quotas. Once the company has been duly set up, the distribution of the percentages must be issued by certificated quotas, where the name of the quota holder must be specified.

Remember that in a limited company, the social capital is represented by registered shares called quotas.

It is required to define the number of quotas making up the corporate capital and their distribution. There always exists a preemptive right towards other shareholders that must be respected when shares are going to be transferred to someone else.

Differences between an S.A. and an LTDA.

Organization and Management

A corporation called S.A. has a Board of Directors composed of at least 3 people: President, Secretary, and Treasurer. In an LTDA company, management is conducted by one person called the Manager or by any designated people who facilitate its organization.

Representation of Social Capital

In an S.A. corporation, the corporate capital is divided into shares. In an LTDA company, are called quotas.
In an S.A. corporation, shares can be transferred freely using an endorsement. In an LTDA company, quota transfer is more restricted and is carried out through assignment. The general assembly must approve all the assignments to a third person of quota holders and must be done through the quota assignment agreement.

Differences in terms of legal books.

An S.A. corporation must keep three legal record books (Minutes of the General Meeting, Register of Shareholders, and Minutes of the Board of Directors). An LTDA company, which lacks a board of directors, must keep only two record books (Minutes of the quota holder Meetings and Quota Holder Registry book).


Supervision of an S.A. is the duty of a Supervisory Director (in Spanish: fiscal), whose position is entirely independent of the Board of Directors, whereas a limited liability company is subject to self-inspection, meaning that the Shareholders Meeting is in charge of this duty. In an LTDA company, there is a lack of supervision.