Costa Rica company registration

Costa Rica company registration

DOING BUSINESS IN COSTA RICA

Since 2003, Healy Consultants has assisted our Clients with starting their business in Costa Rica. Our services include i) Costa Rica business registration ii) registration of the company in Costa Rica free zones iii) corporate bank account opening iv) employee recruitment strategies and v) office rental solutions.

Press the link headings below to read detailed, relevant, up to date information.

  • Advantages and disadvantages

    Advantages of Costa Rica company registration

      Register new business in Costa Rica
    1. Our Clients can register a limited liability company in Costa Rica with a minimum of i) two shareholders and ii) one director of any nationality. The minimum paid-up capital required for establishment of the Costa Rican company is US$1. The incorporation procedures can be completed within 4 weeks and do not require our Client to travel;
    2. Our Clients also find it convenient to establish a holding company in Costa Rica because:
      • The earnings of a Costa Rica company are subject to tax only if they have been sourced from Costa Rica. Consequently, dividends and interest distributed by foreign subsidiaries are exempt from tax;
      • Foreign entrepreneurs investing in Costa Rica face low political risk, thanks to the country’s history of democratic stability. Its institutions are notably ranked as the 3rd best in Central and South America after Uruguay and Chile by the World Economic Forum.

    Disadvantages of Costa Rica company registration

    1. Costa Rica has signed only one double tax avoidance treaty with Spain;
    2. Outside of Costa Rica free trade zones, taxation can represent significant amounts because:
      • Standard corporate tax rate is 30% and dividends paid to non-residents are subject to withholding tax levied at 15%;
      • Registration for sales tax is mandatory for all companies, which must charge such tax at 13% on their invoices;
      • Employers must pay social security contributions representing 26% of their employees’ gross salaries. They must also withdraw personal income tax from their employees’ wages at rates of up to 15%;
      • For all reasons listed above, the total amount of taxes paid by a business registered in Costa Rica represented on average 58% of its earnings in 2014, ten points higher than the Latin American and Caribbean’s average.

    3. The Costa Rica Colon (CRC) is no longer pegged to the USD since January 2014, creating (limited) currency exchange risk for foreign investors.
  • Best uses for a Costa Rica company

    1. Costa Rica is an attractive location for running manufacturing operations, because:
      • Our Clients can register their company in one of the Costa Rica exporting processing zones, where their business will benefit from reduced corporate tax rates of up to 6%. Their operations will also benefit from other tax incentives, including i) no import duties ii) no value added tax and iii) no dividends withholding tax;
      • Costa Rica being a member of the Central American Free Trade Agreement, products manufactured locally can be sold free of custom duties to consumers in the United States, as well as other Central American markets including: i) El Salvador ii) Guatemala iii) Honduras iv) Nicaragua and v) the Dominican Republic;
      • Costa Rica’s strategic location in the middle of the American continent makes it an ideal business gateway to the Americas. With ports on both the Pacific and Atlantic oceans, it serves as an operations base for world markets. Costa Rica is only a five hour flight from New York and an hour flight from other markets like Panama and Ecuador;
      • Labor regulations are quite flexible. Minimum salaries are set by industries: read more about current minimum salary levels. It is also easy to dismiss employees, who are only entitled to i) one month of advance notice and ii) up to 20 days of severance pay, even after several years of employment by our Clients;
      • Costa Rica’s has an educated workforce with one of the highest literacy rates in Latin America at 97%. Most of the population speak English, so communicating with employees will not be challenging for our Client.

Company registration

  • Time to incorporate: Four weeks
  • Cost to set up: US$9,985
  • Minimum capital: US$1
  • Physical office required: Yes

Required appointments

  • Shareholders: 2
  • Directors: 1
  • Company secretary: No
  • Resident director: No

Key facts

  • Corporate tax rate: 30%
  • Corporate tax base: Territorial
  • Shelf companies: Unavailable
  • Main company type: SRL

Contact us

For additional information on our company registration services in Costa Rica, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi
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