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Guidelines
for Forming a Costa Rican Company
Provided as a courtesy by Tacsan & Umaña
A. Procedure: There are three main stages in the process of forming a company.
1. The Notarization of the Articles of Incorporation or Constitutive Charter of the company:
This document is prepared by a Costa Rican Notary Public. The Constitutive Charter determines the organization, administration and bylaws of the company, and is usually signed by all the shareholders, the appointed members of the Board of Directors, the Controller and the "Agente Residente.
2. Requisites for the registration of the company in the Record Office
a. Publication in Costa Rica's official
newspaper "La Gaceta" to announce the constitution of the company: This is a necessary requirement to
register the company in the Record Office. A notice is sent to the
newspaper after the Articles of Incorporation are duly signed. Its
publication takes approximately ten to fifteen working days.
b. Deposit of the capital stock in a national bank:
The amount of the capital stock
indicated in the Constitutive Charter must be deposited in a national
bank as a prerequisite for registering the company. The amount deposited
may be withdrawn once the company has been duly recorded.
3. Registration of the company in the Record Office:
The registration of the company is essential to legally constitute a corporation in Costa Rica. The registration process is performed by the Notary Public before whom the Articles of Incorporation were given. This process takes from one to three months, depending on the time it takes for the Registry Office to approve the company's bylaws.
4. Legalization of Books:
A set of three accounting books ("Diario", "Mayor" e "Inventario y Balances") and three "legal" books (Shareholders' Record, Shareholders' Assemblies, and Board of Directors Meetings) should be presented at the Ministerio de Hacienda for their initial authorization by the Book Legalization Department. Once duly legalized, these books should register all internal affairs of the company (as well as stock transfers) and are kept privately by the shareholders.
B. Requirements
1. Shareholders: To form a company in Costa Rica, a minimum of two initial shareholders are required. Once the company is formed and properly inscribed in the Record Office, the shares then can be transferred to a single person, who becomes the sole shareholder of the company.
2. Capital Stock: The capital stock of a company can range from one colon (C1.00) to any sum that the founders consider necessary for the company to operate. Usually, a low amount is recommended since the capital stock has to be deposited in a national bank until the company's inscription in the Record Office is completed. The money deposited in the bank for this matter can be withdrawn by any of the company's representatives once the corporation is legally installed.
3. Domicile: This is the official address of the company for legal matters.
4. Name: The company name cannot be identical or equivalent to the names of other companies that have already been inscribed. The attorney in charge of preparing the Articles of Incorporation will do research on the names proposed by the founders to determine whether they will be accepted by the Record Office, or need to be modified to comply with this requirement.
5. Shares: The capital stock must be distributed in shares. The amount of shares and their denomination is determined by the founders and their preferences. All shares must have equal value, which must be at least C1.00, though there is no top limit to a share's value (i.e. Capital Stock: c10,000.00 = 10 shares of C1,000.00 each). A capital stock of c1,000.00 distributed in 1,000 shares of c1.00 each, is recommended.
6. Board of Directors: There must be a Board of Directors which must have at least the following offices: President, Secretary and Treasurer. The President must be the principal representative of the company. Other members of the Board can also be made representatives of the corporation, depending on how the founders of the company determine this matter in the Articles of Incorporation. The members of the Board may or may not be shareholders as well. This also depends on how this matter is established in the Articles of Incorporation. The Directors, must be present when the company is legally formed to personally accept their designation and sign the Corporation Charter along with the shareholders.
7. Fiscal: The Controller cannot be a shareholder nor a member of the Board of Directors. The person appointed as Controller has to sign the Articles of Incorporation.
8. Agente Residente: Every Costa Rican company must designate an "Agente Residente". The Agente Residente must be a Costa Rican attorney who becomes a formal representative the company for reference matters. He has no powers to act in the company's behalf.
Purchase of Land and Assets through Costa Rican Companies
In any of the above mentioned cases, both Costa Ricans and foreigners are always advised to buy land through a company. Among the advantages of forming companies for this specific reason, the reduction of personal liabilities and taxes, avoiding probate procedures and obtaining higher confidentiality in the ownership of stock and assets, are the most outstanding.
The ownership of recordable assets, such as real estate and cars, has become the main purpose of most of the registered companies in the country. Hence this method of "indirect” possession, is the most highly recommended means of managing recordable property. Limitations to the engagement in commerce by foreigners, established by our Commerce Code, may also be legally eluded by immigrants when acting through a Costa Rican company.
Once formed, a corporation may be fully controlled by a sole shareholder. This allows the concentration of corporate powers which allows a single individual, or a small group of people, to operate the company in a relatively simple and inexpensive manner. Your attorney will be able to help you find the best ways to ensure control of the company and the overall handling of corporate power.
Off-the-shelf companies are ready made companies that have fulfilled the registration process described above. Tacsan & Umaña keeps off-the-shelf companies in stock for the convenience of its clients. You may request a list of available off-the-shelf company names.
Click here to download application forms to open
a Costa Rica corporation.
Crinet and its associated law firm, Tacsan & Umaña, will be glad to provide you further information and advice on these and other legal matters. Please feel free to contact us by phone or by fax at the following numbers: Phone: (506) 223-6140 and Fax: (506) 233-5804, e-mail: tacuma@racsa.co.cr
Mail from the United States or Canada: SJO 1933, P.O. Box 025216, Miami, FL 33102-5216
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