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Costa Rica is a popular destination for entrepreneurs and investors due to its stable political climate, modern infrastructure, and strategic location. The country encourages both local and foreign investment across a variety of sectors, including tourism, agriculture, technology, and services. Business law in Costa Rica covers the legal framework that governs the creation, operation, and dissolution of businesses, as well as regulation of labor, taxation, contracts, and intellectual property. Understanding the legal requirements and implications is essential to operate effectively and avoid potential liabilities.
Establishing or managing a business in Costa Rica involves navigating a range of complex regulations and compliance obligations. A lawyer can help with company formation, contract drafting or review, negotiation, regulatory compliance, labor law issues, intellectual property protection, tax planning, and dispute resolution. Common situations that require legal help include:
Business activities in Costa Rica are primarily regulated by the Commercial Code, Civil Code, Labor Code, Tax Code, and specialized statutes such as the Law of Corporations. Common business structures include Sociedad Anónima (S.A.) and Sociedad de Responsabilidad Limitada (S.R.L.), among others. Key aspects of local laws to consider include:
The most common forms are the Sociedad Anónima (S.A.), similar to a corporation, and the Sociedad de Responsabilidad Limitada (S.R.L.), similar to a limited liability company. There are also options for partnerships, branches of foreign companies, and sole proprietorships.
Yes, foreigners can own 100 percent of Costa Rican corporations or limited liability companies. Some regulated sectors may have ownership restrictions, but most business activities are open to foreign investment.
Forming a new business entity typically takes two to four weeks, depending on the type of company and the completeness of documentation. Hiring a local attorney can help streamline the process.
Businesses must register for income tax and value added tax (VAT). They are required to file regular tax returns and, in some cases, make monthly advance payments. Additional reporting may apply for payroll and municipal taxes.
Yes, Costa Rican labor law is employee-friendly. Employers must comply with minimum wage rules, social security contributions, paid vacation, bonuses (Aguinaldo), severance payments, and safe working conditions.
Yes, Costa Rican law requires companies to have a legal physical address for official communications, tax filings, and government correspondence.
All corporate documents, contracts, and filings must be in Spanish. Official translations may be required if documents are prepared in another language.
Companies must appoint a Board of Directors (for S.A.) or managers (for S.R.L.), hold annual shareholder meetings, document decisions in meeting minutes, and maintain up-to-date account books and registries.
Business disputes can be resolved through negotiation, mediation, arbitration, or litigation in Costa Rican courts. Arbitration clauses are common in commercial contracts.
Trademarks, patents, industrial designs, and copyrights can be registered with the local authorities. Costa Rica is a member of several international treaties allowing for wider protection.
The following resources and organizations can be valuable for business owners and investors:
If you are considering starting or managing a business in Costa Rica, the first step is to consult with an experienced Costa Rican attorney who specializes in business law. They can help you choose the best legal structure, prepare all necessary documentation, and ensure compliance with local regulations. Gather all relevant documents and information about your intended business. Reach out to governmental agencies or local chambers of commerce to understand sector-specific requirements. Engaging professional legal assistance early can help you avoid costly mistakes and set a strong foundation for your business venture in Costa Rica.
