How to Start a Business in Costa Rica by AG Legal

If you’re considering starting a business in Costa Rica, you’re making a smart move! Our country offers a favorable business environment, political stability, and unique investment opportunities. As a leading hub for foreign investment, AG Legal has helped countless entrepreneurs navigate the company registration process, and we’re here to guide you every step of the way.

Why Choose Costa Rica to Open a Business?

Costa Rica is a top destination for entrepreneurs worldwide; it’s a thriving hub for businesses expanding into Latin American markets. With a favorable business climate, robust free trade agreements, and a skilled workforce. At AG Legal, we’ve seen a surge in business ventures ranging from tech startups to eco-tourism enterprises, all seeking to tap into Costa Rica’s rich potential.

So why should you start a business in Costa Rica? The reasons are clear:

  • Strategic location: Access to North and South American markets.
  • Political stability: A long-standing democracy with a pro-business government.
  • Sustainability: A global leader in eco-friendly initiatives that appeal to businesses with a green focus.

Legal Requirements for Company Registration in Costa Rica

Understanding the legal requirements to start a business can be overwhelming, especially if you must familiarize yourself with local regulations and legal entities. We specialize in helping companies comply with Costa Rica’s legal framework, ensuring a smooth and hassle-free setup process.

Here are the essential legal steps:

  • Registering the company: Your business must be registered with the National Registry. This step also involves preparing the Articles of Incorporation, the company name, which outlines the company’s structure, shareholders, and objectives.
  • Social Security registration: All businesses must be registered with the Costa Rican Social Security Fund (CCSS), Caja Costarricense de Seguro Social. This is mandatory for employing staff and contributing to the country’s healthcare and pension systems.
  • Tax registration: You must register with the Costa Rican Tax Administration (Ministerio de Hacienda) to obtain a corporate tax ID. This ensures your business complies with tax regulations and that you pay all of them.

By working with AG Legal, you can rest assured that you’re following all the necessary steps and not missing any critical details.

Types of Business Structures in Costa Rica

One of the first decisions you’ll make when you set up a business in Costa Rica is choosing the proper business structure. This decision affects everything from taxation to personal liability, so it’s crucial to get it right. Here are the most common structures:

  • Sociedad Anónima (S.A.): This is a corporation where the shareholders have limited liability. It’s ideal for larger businesses that require flexibility.
  • Sociedad de Responsabilidad Limitada (SRL): This is a Limited Company (LTDA) with limited liability to the capital invested. Smaller businesses often prefer this due to its straightforward structure.

Each structure has its pros and cons, and at AG Legal, we can help you decide which option best suits your business needs.

Foreigners Starting a Business in Costa Rica

Are you a foreigner looking to start a business in Costa Rica? Good news! The process is open to foreigners, but there are specific requirements to be aware of. For instance, while residency is not mandatory for owning a business, it is required if you plan to work directly in your enterprise. But let’s be clear: you can consider living in Costa Rica with the risk that you may not want to return to your country.

At AG Legal, we are experts in guiding foreign investors through the business registration process. We understand the nuances of local regulations and can help you navigate immigration and legal requirements smoothly so you can focus on growing your business. Our clients have praised us for making their transition to Costa Rica seamless, and we’re here to do the same for you.

How to Obtain a Business License

Once your company is registered, you need to secure a business license (known locally as a “patent”) from the local municipality. This license allows your business to operate legally within the chosen jurisdiction. The process involves:

  • Application submission: Documents proving company registration, tax ID, and local permits.
  • Additional permits: Depending on your type of business, extra licenses are required, especially in regulated industries like food service or construction.

For example, if you plan to open a restaurant, you’ll need health and safety permits. AG Legal can help you understand exactly what your business needs to stay compliant and fully operational.

Opening a Bank Account for Your Business

A bank account for your business is essential for handling daily operations, managing payroll, and receiving payments. To open an account in Costa Rica, you must present proof of company registration, tax information, and valid identification.

AG Legal has partnerships with local banks, including Banco de Costa Rica, to simplify this process. We’ll ensure you meet all legal requirements and make the banking setup as smooth as possible.

Tax Requirements and Obligations

All companies in Costa Rica must comply with Costa Rican tax regulations. This includes paying corporate taxes, which vary based on your company’s revenue. Additionally, businesses must contribute to the Costa Rican Social Security System (CCSS), which funds healthcare and pensions for employees.

Our sister’s company, AG BPO Services, has experienced accountants who will ensure your business practices comply with local laws and help you avoid penalties and fines.

Business Environment: Opportunities and Challenges

Costa Rica’s business environment is one of the most dynamic in Latin America. The country provides excellent business opportunities with a stable economy, a strong focus on education, and a thriving tourism sector. However, like any market, it has its challenges.

The bureaucratic processes involved in company registration and obtaining licenses can be complex. Additionally, while Costa Rica’s cost of living and doing business can be higher than in some neighboring countries, the benefits of operating here—such as political stability, safety, and a well-educated workforce—often outweigh these challenges.

Register a company in Costa Rica with a good lawyer includes a good reputation in international trade. Costa Rica is part of the OECD, which gives peace of mind and, at the same time, compliance with obligations such as filing an ultimate beneficial owner, all against money laundering.

If you want to start a Costa Rica adventure with a specific business and would like expert guidance, contact us at AG Legal for your business success.

We have extensive experience helping companies of all sizes succeed in this vibrant market, and we’re ready to assist you at every step.

Feel free to contact us: info@aglegal.com