The jurisdiction in question has now developed a very strong platform for company incorporation in Costa Rica. It becomes relevant among the regional hubs due to the combined effect of territorial taxation, legal predictability, and a very active reform agenda. In other words, a civil law foundation ensures a list of procedures for Costa Rica company registration and its maintenance. Recent changes in the area, the switch from traditional naming to numeric identification, are an effort to simplify formalities and foster institutional efficiency.
Registration of a company in Costa Rica: Regulations
The structural reform that entered into force on May 30, 2025 has changed the approach to the concept of legal firm recognition. The newly constituted entity either in corporate or limited liability structure is granted a numeric cédula jurídica. It will act as an official identifier for corporate names in public records.
Those earlier processes of reserving or verifying the name are removed with these provisions. Trade names, however, create a real need, such as market visibility, client relations, and brand differentiation. Novelty will be submitted to the new rules on naming; it will still be legitimated by the prior naming model for all subjects except for documents at the stage of processing during the reform. The changes represent movement toward an online registry standard and are in line with the transparency standards set by multiple adherence frameworks.
Advantages
One is working through a local entity which has many structural and fiscal benefits. Investor protection is further guaranteed by separation of personal and corporate responsibility concerns; overseas possession is allowed without any duty to reside. A territorial tax model would limit application to income earned within its national borders, with earnings from abroad not connected to local activities lying outside the fiscal system.
Entities within the Free Trade Zone framework benefit from full income tax relief for up to eight years in city areas and up to twelve years elsewhere. This policy has drawn manufacturers, logistics operators, and service providers focused on export markets. A stable legal environment, manageable compliance, and efficient digital processes make the jurisdiction attractive to investors seeking streamlined operations.
Requirements
Formation of a corporate structure involves minimum participation thresholds—two shareholders in the case of a corporation and one member for a limited liability format. Directors can be of any nationality, and there is no restriction on foreign ownership. The foundational act must be executed before a notary public, specifying governance powers, share distribution, and registered address.
Each new entity that wants to register company in Costa Rica must get a TIN (Tax Identification Number) and complete its inscription with the National Registry and the tax authority. Where staff are employed, registration with the SSI (Social Security Institution) is obligatory. Annual reporting of beneficial ownership is also a requirement. To open a bank account, certified corporate materials, identity verification of owners, and proof of address are typically needed. Non-resident investors must provide legalized or apostilled versions of their documents.
Key steps for online company incorporation Costa Rica
The main moves to register a company in Costa Rica online are listed below:
- The notary files the incorporation deed electronically through the digital system;
- The National Registry automatically assigns the entity’s legal identification number;
- A digital signature is obtained to enable official communication and electronic filing;
- Fiscal activation is completed once the tax registration process is confirmed;
- The trade name is registered with the intellectual property authority;
- Municipal operating permits are requested through the local government platform;
- Employees are enrolled with the SSI to finalize adherence.
Steps after registering a company in Costa Rica
After company formation in Costa Rica, continuous compliance becomes essential. Entities are expected to maintain accounting records in accordance with IFRS and preserve them for a minimum of five years. Annual submission of tax returns, VAT declarations, and payment of social charges must be observed. Changes in management or shareholder structure are to be reported to the National Registry.
Entities classified as significant taxpayers must prepare transfer pricing documentation in line with OECD principles. Those with cross-border income should demonstrate sufficient economic substance locally to avoid reclassification as passive structures. Non-abidance with filing obligations can lead to administrative fines equivalent to approximately half a base salary per omission. Regular audits are rare but possible for entities with high transaction volumes.
Costs for registration of a business (firm) in Costa Rica
Costa Rica company formation expenses are dependent upon the registered capital and the notary fees and can thus range from a few hundred to several thousand U.S. dollars. Annual operational costs include fees for local municipal licenses usually set at between 0.5% and 1.5% of declared income, selectable by the municipality. Routine costs involve accounting, compliance filings, and legal representation. There are also periodical reports for entities having FEZ status, which is one of the conditions for the exemption from taxes. There is no general wealth or net worth levy, but exceeding or surpassing a certain value can attract real estate tax. Property transfer is subject to a 1.5 percent transaction levy. Upkeep obligations are overall pretty predictable and controllable.
Taxation
Income earned within the jurisdiction is taxed at 30%, with dividends subject to an additional 15% withholding, producing a combined burden of slightly above 40%. Capital gains from operational assets fall under the 30% level, while passive gains are taxed at 15%. Entities under Free Trade Zone incentives enjoy full exemption for a defined period. Losses may be carried forward for up to three years, or five in agricultural activities.
VAT applies at 13% on most goods and services, with reduced brackets of 4%, 2%, and 1% for key sectors like healthcare, pharmaceuticals, education, and basic consumption. Individuals face progressive taxation on local income at 10%, 15%, 20%, and 25%. Personal capital gains are generally taxed at 15%, or 2.25% of sale value for assets held before July 2019. Social security contributions by employers and employees together amount to around 15%. Tax relief on foreign income is available only under bilateral agreements with selected countries.
Significant considerations
Key compliance points require attention. Related-party dealings must follow OECD arm’s length principles, and the tax authority can request transfer pricing documentation, particularly from major taxpayers. Interest expenses are capped at 20% of EBITDA to prevent excessive intra-group financing. While there are no specific rules on controlled foreign entities, general anti-avoidance provisions apply.
Digital services supplied from abroad are subject to VAT withholding, collected by local payment intermediaries. Each entity must confirm its ultimate owners annually. The shift from corporate names to numeric identification marks a procedural change, making trade name protection and intellectual property registration crucial for maintaining market presence.
Our services
Eternity Law International provides comprehensive legal assistance for cross-border entity structuring at all stages — formation, restructuring, and dissolution. The specialist prepares the full set of required documentation and handles all interactions with pertinent public authorities on the client’s behalf.
For those seeking rapid market entry, pre-incorporated entities with active banking facilities are available for acquisition. The team also supports clients in securing permits for regulated sectors, including fintech, payment processing, digital asset platforms, and gaming operations.
Many clients also request expert advice on re registering a company in Costa Rica to guarantee abidance by current standards.
Conclusion
The jurisdiction provides an organized legal structure and open compliance rules, together with territorial tax, thereby creating an excellent setting for investment projects. It would mean a smooth foundation with flexibility in branding by easing into numeric identification. Fiscal incentives, added to political steadiness and to digital public systems, reinforce its competitiveness.
Small in terms of geography, the country constantly reforms its legal and fiscal frameworks to remain in harmony with international standards. Predictable tax policies, moderate administrative requirements, and comprehensive electronic services make for an efficient location acting as a base for regional or multinational operations.
Eventually, it is advisable to turn to the experts in order to incorporate or re register company in Costa Rica.
FAQ
Can a foreigner start a business in Costa Rica?
Yes. Registration of a company for foreigners in Costa Rica is possible. Directors and shareholders can be of any origin. The creation process can be completed remotely.
What is the 13% tax in Costa Rica?
The 13% levy refers to the VAT applied to most goods and services. It functions as a consumption-based charge collected at each stage of the supply chain.
Does Costa Rica have LLC?
Yes. The local equivalent is the S.R.L., which operates under principles similar to a LLC. This structure is commonly used for small and medium-scale operations due to its flexibility and minimal administrative tasks.