When starting a business in Costa Rica there are two legal structures which are most commonly used.
When starting a business in Costa Rica, there are two main structures to be considered.
The first thing that must be done when starting a business in Costa Rica is to choose the correct corporate structure for the activity that will be undertaken. For example, investors in Costa Rica can do things such as establish a subsidiary of a transnational corporation, set up a manufacturing operation, start-up a call center or open a hotel or a tourism-related business. Additional activities that might be undertaken may include things such as the establishment of a family business, the provision of services in areas such as payroll preparation, real-estate or property management, and a multitude of other possibilities.
When starting a business in Costa Rica, the country’s Commercial Code provides a number of choices that relate to how a company’s corporate structure can be organized. The two that are most commonly used, however, are the Sociedad Anonima (SA) and the Limited Liability Company (SRL). It is important to know the difference between these two options before embarking upon any business venture.
- Sociedad Anonima (SA)
The SA is one of the most commonly used corporate structures when starting a business in Costa Rica. It is a legal entity that enables an individual or a group to conduct business and to execute commercial contracts. Additionally, it is the means by which company owners, and their legal representatives, can separate and protect their personal assets from their business assets. In the same way, assets belonging to a company would then be protected from all obligations or responsibilities incurred by shareholders or their legal representatives in their personal capacity.
Requirements for starting a business in Costa Rica using a Sociedad Anonima (SA)
When starting a business in Costa Rica, a Sociedad Anonima must be formed by at least two individuals that participate as constituent shareholders. The Sociedad Anonima or SA should have a board of directors that consists of three members (President, Secretary, and Treasurer). These positions can be occupied by the company’s shareholders or by other persons appointed for that purpose. By law, the President will be the main legal representative of the company and will have the corporate power of attorney.
It is also possible to grant representation and powers to other members of the Board of Directors or to third parties. These powers can be absolute or can be limited in relation to the acts that can be executed by the agent or agents of the company. In the case that the company does not have a representative that is a resident in Costa Rica, a Resident Agent must be appointed. When starting a business in Costa Rica, an appointed Resident Agent must be an attorney that has an established office in the country. This party will be in charge of receiving notifications on behalf of the company. The SA is a kind of corporation that is to be used when there are many shareholders and/or when the idea is to negotiate and sell shares in the stock market.
- Limited Liability Company (SRL)
The Limited Liability Company (Sociedad de Responsibilidad Limitada), or SRL, is another of the structures most commonly used when starting a business in Costa Rica. The SRL, like the Sociedad Anonima, is a legal entity with full capacity to act and acquire obligations. Similarly, the SRL provides protection for the personal assets of the shareholders, representatives, and attorneys. This is because the responsibilities and the obligations of the company are not transferred to them. Additionally, the assets of the company are not affected by the obligations or the responsibilities of the shareholders or those that have been appointed to act on behalf of the company.
Requirements for starting a business in Costa Rica using a Limited Liability Company (SRL)
Starting a business in Costa Rica as an SRL requires at least two individuals to participate as constituent shareholders. The Limited Liability company is directed by one or more managers that may or may not be partners. The manager or managers are the persons that may be empowered to act as legal representatives for the company. They may be granted either absolute or limited responsibility. Additionally, a lawyer or lawyers may occupy a position in the place of a manager and may hold limited or general powers of attorney for the company. Unlike the Sociedad Anonima, an SRL cannot sell shares in the stock market. Both the SA and the SRL are limited liability companies and are treated in the same manner for tax purposes in Costa Rica.
Investors that are exploring the possibility of starting a business in Costa Rica are invited to contact the Central American Group by filling out the form that is provided below:
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