Different types of companies in Costa Rica: Which is right for you?

Infographic titled "Costa Rica: Market Snapshot" with statistics including a population of 5.1 million, GDP of USD $69 billion, GDP per Capita (PPP) of USD $26,809, and the capital city is San José. Major exports listed are medical instruments, bananas, and tropical fruits produced by various types of companies in Costa Rica. — *All types of companies in Costa Rica benefit from the strong economy*

Costa Rica stands out as one of the most open countries in Latin America for business, thanks to its extensive network of regional trade agreements and its welcoming policies for foreign investors. Before starting operations in the country, it is essential to understand the different types of companies in Costa Rica. This will help you structure your business effectively.

From sole proprietorships to corporations, it’s easy to register a company in Costa Rica. There are a range of legal structures to suit diverse business needs. Understanding the differences between types of companies in Costa Rica can help you make informed decisions that align with your business objectives and regulatory requirements. With the right legal structure, you can position your business for success in this dynamic and thriving market.

Costa Rica has business-friendly policies, making all commercial processes relatively easy. Governmental policies encouraging foreign investment help the country to position itself as a top destination in both Central and Latin America. Whichever of the types of companies in Costa Rica you choose, you will be on the path to success.

2 basic types of companies in Costa Rica

The two most common legal entities in Costa Rica are:

Corporation (Sociedad Anónima – S.A)
Limited Liability Company (Sociedad de Responsabilidad Limitada – S.R.L)

1. Corporation (Sociedad Anónima – S.A):

A map of Costa Rica highlighting major cities and ports: San José (capital), Liberia, Puntarenas, Cartago, Puerto Limón, and Puerto Viejo de Talamanca. The map includes the Pacific Ocean and Caribbean Sea along with a legend for capitals, cities, port cities, and notes on employment law in Costa Rica. — *A map of Costa Rica and its main cities where most types of companies in Costa Rica can be found*

The S.A. is the most common legal entity structure in Costa Rica. See below some of its key characteristics:

A Public Document must be drafted with the bylaws and signed by the public notary and company shareholders.
A minimum of two shareholders are required.
There is no established minimum capital.
A board needs to be appointed, consisting of three board members and a controlling agent.

The availability for the company name needs to be checked with the National Registry Database.

2. Limited Liability Company (Sociedad de Responsabilidad Limitada – S.R.L):

The Limited Liability Company has the same requirements as the S.A., with the only exception being the administration; shareholders are required to appoint at least one General Manager. Shares are called quotas and there is no minimum required capital. However, the amount subscribed must be divisible by 100. The company name availability must also be checked on the National Registry database.

Our Recommendation: The Limited Liability Company (Sociedad de Responsabilidad Limitada – S.R.L) structure because it provides a balance of limited liability protection for its members and flexibility in management and ownership. Additionally, the S.R.L structure is well-suited for small to medium-sized enterprises seeking to establish a presence in Costa Rica.

steps to form a company in costa rica by biz latin hub — *In this article, learn about the different types of companies in Costa Rica and how to register a company*

Another option: Branches of foreign companies:

Branches of foreign companies are incorporated with a public deed signed by the Public Notary and the power of attorney of the foreign company. Due to the complexities of drafting and signing all agreements, this legal structure is not recommended for SMEs. Apart from the requisites asked by the National Registry, it is also considered more expensive than other legal entities in Costa Rica.

FAQs on Types of Legal Structures in Costa Rica

1. Can a foreigner register a company in Costa Rica?

Absolutely, foreigners can register a company in Costa Rica. However, certain restrictions or requirements may apply depending on the chosen legal entity structure.

2. What type of legal entity is an S.R.L (Sociedad de Responsabilidad Limitada) in Costa Rica?

The S.R.L is similar to an LLC type of company in other jurisdictions.

3. How do I create a company in Costa Rica?

To establish a company in Costa Rica, you need to follow specific legal procedures and fulfill regulatory requirements. It’s advisable to seek assistance from legal professionals to ensure compliance.

4. What is an LLC in Costa Rica?

An LLC, or Limited Liability Company, in Costa Rica is a hybrid legal structure that combines the flexibility of partnerships with the limited liability protection of corporations. It offers advantages such as pass-through taxation and simplified management structures.

5. What is the business structure of a Sociedad de Responsabilidad Limitada (S.R.L) in Costa Rica?

Shareholders are required to appoint at least one general manager. Shares are called quotas and there is no minimum required capital. However, the amount subscribed must be divisible by 100.

Interested in Beginning Commercial Operations in Costa Rica?

Choosing the type of company depends on which structure is best suited to your business needs. Much consideration needs to be taken before launching your operations in Costa Rica.

Given the favorable conditions in the country and the region as well as the economic growth, Biz Latin Hub through its company offers the experience and support necessary for investors to have a successful market entry in Costa Rica. Feel free to contact us now.

For more information on doing business in Latin America, check out the short video below: