Costa Rica Corporation Regulations

A citizen of any country, over the age of eighteen years, may incorporate a company in Costa Rica , and hold a position as an officer, on the Board of Directors. There is no requirement for the incorporator to be resident in Costa Rica .

The most common form of corporate formation, is the Sociedad Anonima (S.A.). This entity is similar in nature and structure to corporations in other jurisdictions, which are denoted by the suffix “Limited”, “Incorporated”, or “Corporation”. The main features of this corporate entity, are that the liability of the shareholders is limited to their capital contributions, and ownership in the corporation is easily transferable to third parties.

The most common way for this corporation to be formed, is for two incorporators to personally appear before a Costa Rican Notary Public to execute the articles of incorporation, each incorporator subscribing for at least one share of corporate stock. The articles must include the following: 1) Incorporation date and place; 2) Personal data of the incorporators; 3) Corporate name; 4) Corporate purpose (usually stated in broad terms to include almost any legal activity); 5) Duration (usually ninety-nine years); 6) Capital Stock; 7) Capital Contribution; 8) Legal Domicile; 9) Board of Directors (ie. President, Secretary, and Treasurer); 10) Powers of the Board of Directors; 11) Allocation of Profit and Loss; 12) Procedure on Dissolution; 13) Resident Agent (if the President of the Corporation is not residing in Costa Rica ).

Once the articles of the corporation have been drafted and executed by the incorporators, the documentation is submitted to the Costa Rica Public Registry (Registro Nacional), for registration, along with the applicable fees. The registration process takes approximately six weeks to complete. When the documentation is returned from the Registry, following registration, the company must be registered with the Costa Rica Revenue Department (Tributación Directa), and legalize the corporate books (six in total).

Often, corporations are required on a more timely-basis, than the six week period required for registration, to complete various commercial transactions, particularly with respect to the purchase of real estate and motor vehicles, which are most commonly held through corporate entities. In these circumstances, it is quite common for law firms to have an inventory of “shelf” companies available for purchase, which are companies, already incorporated and registered, normally with employees of the law firm, occupying the positions of the officers on an interim Board of Directors in the company. This allows for such commercial transactions to complete without delay, and thereafter, to merely enact a resolution of the company, changing the Board of Directors and Shareholders of the company, to those desired by the company purchaser, following completion of the commercial transaction.

If the articles of incorporation permit, Powers of Attorney may be granted by the Board of Directors to third parties, to conduct various business transactions, on behalf of the company, such as purchasing a specific piece of property, or opening a bank account.

The Costa Rica Commercial Code also allows foreign corporations to establish a branch, or subsidiary in Costa Rica , or become domiciled in Costa Rica , so long as it complies with specified requirements. These requirements are very similar in nature to those requires for the incorporation and registration procedure, previously discussed.

This article was written by Lic. W. Richard Philps, Lawyer with Alliance Law Group, S.R.L., in San José , Costa Rica . Mr. Philps is also a Canadian Lawyer, and may be contacted at rphilps@alliancelaw.co.cr


	INCORPORATING IN COSTA RICA A citizen of any country, over the age of eighteen years, may incorporate a company in Costa Rica , and hold a position as an officer, on the Board of Directors. There is no requirement for the incorporator to be resident in Costa Rica . The most common form of corporate formation, is the Sociedad Anonima (S.A.). This entity is similar in nature and structure to corporations in other jurisdictions, which are denoted by the suffix “Limited”, “Incorporated”, or “Corporation”. The main features of this corporate entity, are that the liability of the shareholders is limited to their capital contributions, and ownership in the corporation is easily transferable to third parties. The most common way for this corporation to be formed, is for two incorporators to personally appear before a Costa Rican Notary Public to execute the articles of incorporation, each incorporator subscribing for at least one share of corporate stock. The articles must include the following: 1) Incorporation date and place; 2) Personal data of the incorporators; 3) Corporate name; 4) Corporate purpose (usually stated in broad terms to include almost any legal activity); 5) Duration (usually ninety-nine years); 6) Capital Stock; 7) Capital Contribution; 8) Legal Domicile; 9) Board of Directors (ie. President, Secretary, and Treasurer); 10) Powers of the Board of Directors; 11) Allocation of Profit and Loss; 12) Procedure on Dissolution; 13) Resident Agent (if the President of the Corporation is not residing in Costa Rica ). Once the articles of the corporation have been drafted and executed by the incorporators, the documentation is submitted to the Costa Rica Public Registry (Registro Nacional), for registration, along with the applicable fees. The registration process takes approximately six weeks to complete. When the documentation is returned from the Registry, following registration, the company must be registered with the Costa Rica Revenue Department (Tributación Directa), and legalize the corporate books (six in total). Often, corporations are required on a more timely-basis, than the six week period required for registration, to complete various commercial transactions, particularly with respect to the purchase of real estate and motor vehicles, which are most commonly held through corporate entities. In these circumstances, it is quite common for law firms to have an inventory of “shelf” companies available for purchase, which are companies, already incorporated and registered, normally with employees of the law firm, occupying the positions of the officers on an interim Board of Directors in the company. This allows for such commercial transactions to complete without delay, and thereafter, to merely enact a resolution of the company, changing the Board of Directors and Shareholders of the company, to those desired by the company purchaser, following completion of the commercial transaction. If the articles of incorporation permit, Powers of Attorney may be granted by the Board of Directors to third parties, to conduct various business transactions, on behalf of the company, such as purchasing a specific piece of property, or opening a bank account. The Costa Rica Commercial Code also allows foreign corporations to establish a branch, or subsidiary in Costa Rica , or become domiciled in Costa Rica , so long as it complies with specified requirements. These requirements are very similar in nature to those requires for the incorporation and registration procedure, previously discussed. This article was written by Lic. W. Richard Philps, Lawyer with Alliance Law Group, S.R.L., in San José , Costa Rica . Mr. Philps is also a Canadian Lawyer, and may be contacted at rphilps@alliancelaw.co.cr
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