Corporations in Costa Rica

Ivan Granados - DEC 02, 2016
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Although, in Costa Rica foreign ownership is fully permitted with the following exceptions: a) property given or sold to CR citizens as part of government aid programs and b) the concession land, it is advisable to purchase property through a CR corporation. Doing so, allows the purchaser to have: flexibility and liability protection. Furthermore, it can help with the proper Estate and Tax planning, as well as not requiring the property owner to be in Costa Rica, to grant a special POA (Power of Attorney) for the diligences or acts required.

CR Law contemplates different types of corporate entities, the main and best known are: “Sociedad Anonima or SA” and a “Sociedad de Responsabilidad Limitada or SRL”. In both entities, the liability is limited to the corporation’s assets and to the totality of the contributions made by the shareholders or quota holders, therefore, the personal assets are protected against any potential creditor the company may have. However, they have differences that need to be taken into consideration, some of them are the following:

The “SA” is governed by a Board of Directors: President, Secretary and Treasurer. Also, it is mandatory to have a Comptroller. Each appointment must be occupied by a different person of legal age. Therefore, you need at least 4 individuals. The Stock of a SA are called shares. The shares represent the capital stock of the corporation. The Shares can be transferred through endorsement of the Share Certificates and proper entry in the Shareholder Registry Book. The shareholders may transfer their interest to a third party freely, unless otherwise stated in the articles of Incorporation or bylaws of the SA.

The “SRL” does not have a Board of Directors, could be governed by only one individual (Manager), making it really easy and simple. The Stock of a SRL are called quotas. The quotas represent the capital stock of the corporation. The Quotas are transferred through an Assignment Agreement and proper entry in the Quota Holder Registry Book. However, the quota holders have, as per CR law, a right of first refusal provision for the sale of them. Therefore, cannot be transferred to a third party without offering their interest to the other quota holders first.

Before setting up your corporation in Costa Rica you should get proper advice from a CR corporate Attorney, who will help determine the right and appropriate legal corporate structure required for the business or investment you want to make. It must be successfully implemented to avoid problems with the authorities in Costa Rica and for your corporation to operate smoothly.

Ivan Granados is the Managing Partner at GM Attorneys, he specializes in real estate and corporate law. Contact him at Aigranados@gmattorneyscr.com

GM Attorneys is a premium boutique Law Firm with offices in Tamarindo, Flamingo Beach and San Jose. www.gmattorneyscr.com