Company incorporation in Costa Rica
Foreign investors exploring company incorporation in Costa Rica will find a jurisdiction that combines legal clarity, tax advantages, and operational flexibility. The country’s pro-business stance, combined with its territorial tax regime, makes it especially appealing for those targeting international markets.
Costa Rica allows 100% foreign ownership, has no minimum share capital for most entities, and offers remote company registration, making it highly accessible for global entrepreneurs. Business structures like the S.R.L. and S.A. provide limited liability and are well-suited for both small startups and international expansions.
With no tax on foreign-sourced income, a robust legal framework, and access to free trade zones, Costa Rica has become a preferred destination for new company registration in the region.The guide that follows explains everything you need to know about the business incorporation process in Costa Rica, including legal steps, required documents, timeline, taxation, and residency options.
Fast facts about doing business in Costa Rica
Costa Rica is recognized as one of the most reliable and accessible jurisdictions in Latin America for foreign investors.
With a focus on sustainability, stability, and open markets, the country continues to attract entrepreneurs seeking a solid base for regional and international operations.
Key economic indicators
Costa Rica has a population of over 5 million, with a Gross Domestic Product (GDP) of approximately $75 billion and a strong services sector. It maintains one of the highest literacy and education rates in the region, providing businesses with access to a skilled and bilingual workforce. The local currency is the Costa Rican colón (CRC), but US dollars are widely accepted, especially for business and investment purposes. The economy is diverse and export-driven, with key industries in technology, tourism, agriculture, and shared services.
Costa Rica has a population of over 5 million, with a Gross Domestic Product (GDP) of approximately $75 billion and a strong services sector. It maintains one of the highest literacy and education rates in the region, providing businesses with access to a skilled and bilingual workforce. The local currency is the Costa Rican colón (CRC), but US dollars are widely accepted, especially for business and investment purposes. The economy is diverse and export-driven, with key industries in technology, tourism, agriculture, and shared services.
Tax and legal environment
Costa Rica operates under a territorial tax system, meaning only locally generated income is taxed. This is a major advantage for foreign-owned companies doing business internationally, as foreign-sourced profits are tax-exempt. Corporate tax rates range from 5% to 30%, depending on income level, while VAT is charged at a standard rate of 13%. The country has signed double tax treaties with Germany, Spain, and Mexico, and continues to build its international tax framework. The legal system is based on civil law, providing a clear regulatory structure for incorporation, governance, and compliance. The public deed registration process ensures that all entities are properly documented and legally recognized.
Costa Rica operates under a territorial tax system, meaning only locally generated income is taxed. This is a major advantage for foreign-owned companies doing business internationally, as foreign-sourced profits are tax-exempt. Corporate tax rates range from 5% to 30%, depending on income level, while VAT is charged at a standard rate of 13%. The country has signed double tax treaties with Germany, Spain, and Mexico, and continues to build its international tax framework. The legal system is based on civil law, providing a clear regulatory structure for incorporation, governance, and compliance. The public deed registration process ensures that all entities are properly documented and legally recognized.
Why Costa Rica is a top destination for incorporation
Costa Rica stands out for its combination of legal transparency, investor protection, and flexible company structures. Foreigners can establish a business with no residency requirement, and the entire process can be completed remotely through a legal representative.There are no restrictions on foreign ownership, and minimum share capital requirements are either symbolic or non-existent. These features make private limited company registration in Costa Rica accessible and cost-effective for founders worldwide.In addition, the country promotes foreign investment through special economic zones and tax incentives, particularly for export-oriented and tech-driven businesses.
Political stability and pro-investment policies
Costa Rica is known for its long-standing democratic tradition and absence of a standing army, which contributes to its image as a safe and predictable place to invest. Political institutions are stable, and the government actively encourages foreign direct investment.Investment-friendly laws and clear procedures reduce red tape and allow for seamless global execution. Regulatory updates often reflect OECD standards, which the country adopted upon becoming a member in 2021.These stable foundations make Costa Rica a secure and forward-looking destination for global business incorporation.
Strategic access to North and South American markets
Located between North and South America, Costa Rica serves as a strategic bridge for trade and business development. The country has free trade agreements with the United States, Canada, the European Union, and several Latin American nations.
Its ports on both the Pacific and Caribbean coasts enable efficient logistics, while its modern digital infrastructure supports high-value service industries and remote operations.This connectivity strengthens Costa Rica’s position as a gateway for companies seeking regional expansion or a hub for international operations.
6 key advantages of incorporating in Costa Rica
Costa Rica applies a territorial tax regime, meaning companies are only taxed on income earned within the country. Foreign-sourced revenue is completely tax-exempt, which is especially attractive for businesses with international clients or offshore operations.
This structure helps companies legally reduce their global tax burden while remaining fully compliant with local laws.
Costa Rica permits 100% foreign ownership in nearly all sectors. There is no requirement for local shareholders or directors, and companies can be formed entirely remotely, without the founder traveling to the country.
This flexibility simplifies the new company registration process and allows entrepreneurs to enter the market quickly and efficiently.
There is no minimum share capital requirement for most legal entities, and companies like the Sociedad de Responsabilidad Limitada (S.R.L.) and Sociedad Anónima (S.A.) offer scalable structures with limited liability protection.
These legal forms are suitable for startups, holding companies, or international trading firms, offering both simplicity and adaptability.
Costa Rica offers a transparent legal framework rooted in civil law, making regulatory compliance clear and predictable. In addition, local and international banks support corporate account opening, with services available in multiple currencies.
Digital signatures, electronic filing, and strong data privacy laws contribute to a modern, pro-business environment.
Businesses incorporated within Costa Rica’s Free Trade Zones benefit from extensive tax advantages, including income tax exemptions, VAT relief, and customs duty waivers for up to 12 years.These incentives apply to a wide range of sectors, including technology, logistics, manufacturing, and R&D, supporting long-term growth and reinvestment.
With high levels of education and government support for innovation, Costa Rica is also becoming fertile ground for tech startups, particularly in software, life sciences, and clean tech sectors.
Costa Rica has long been recognized for its political neutrality, democratic governance, and strong institutions. This stability, combined with pro-investment policies, offers a secure foundation for building and scaling global operations.
Its membership in the OECD and alignment with international standards ensure that investors enjoy a trustworthy and internationally respected jurisdiction for company formation.
6 common challenges for foreign founders
All corporate and legal documents in Costa Rica must be prepared in Spanish, and interactions with authorities are generally conducted in the local language. This may pose difficulties for non-Spanish-speaking founders.
To ensure compliance and accuracy, it’s essential to work with bilingual legal professionals familiar with Costa Rican corporate law.
Unlike in common law jurisdictions, incorporating a company in Costa Rica requires a public deed executed by a notary. The process must be registered with the National Registry, following strict formatting and documentation rules.
Engaging an experienced notary is critical for handling the legal formalities and timing of the incorporation process.
Opening a corporate bank account in Costa Rica can take several weeks and involves detailed compliance checks, including identity verification, proof of business activity, and tax registration.
Working with a local partner or firm familiar with banking procedures can help reduce delays and improve the onboarding experience.
Although Costa Rica has no mandatory accounting requirements for offshore entities, all companies must file annual tax returns and maintain internal records. In some sectors, additional licenses or registrations may be required.
It’s important to stay informed about regulatory updates and deadlines to avoid penalties or loss of good standing.
Hiring in Costa Rica involves compliance with local labor regulations, including social security enrollment (Caja), occupational risk insurance, and adherence to employee benefits and severance rules.
Foreign founders should budget for mandatory payroll taxes and legal protections and seek professional HR support when onboarding staff locally.
While there is no need for founders to be residents, certain legal functions, such as registered agents or company representatives, must be held by individuals with legal presence in Costa Rica.
Founders not relocating may need to appoint a resident legal representative, ensuring continuous compliance with local corporate governance norms.
Banking in Costa Rica: what to expect
Opening and managing a corporate bank account in Costa Rica is a key step in establishing local operations. The country’s banking system is modern, regulated, and accessible, but it involves specific procedures foreign founders should be prepared for.
Opening a business bank
account
To open a business account, companies must provide a full set of incorporation documents, identification for directors and shareholders, and proof of tax registration. Most banks require a physical address in Costa Rica and a brief explanation of the company’s intended activities.
The process typically takes 2 to 4 weeks, depending on the bank and the company’s structure.
Local presence, KYC, and banking due diligence
Costa Rican banks follow strict Know Your Customer (KYC) protocols. This includes verifying the identities of all beneficial owners and collecting documentation related to the business’s origin of funds and scope of operations.While in-person visits are sometimes requested, some banks allow remote account opening if supported by a legal representative or certified documents.
Taxation and compliance requirements
Costa Rica operates a territorial tax system, meaning only income generated within the country is subject to taxation. Foreign-sourced revenue is tax-exempt, which is a major advantage for companies serving global markets.Companies must still comply with local registration, maintain updated records, and file annual tax declarations, even if no local income is reported.
Corporate income tax, VAT, and territorial taxation system
Corporate income tax ranges from 5% to 30%, depending on revenue levels. Businesses must also register for Value Added Tax (VAT) at a standard rate of 13%, applied to most goods and services sold locally.
Since Costa Rica does not tax income earned abroad, this makes it an ideal location for international consulting, e-commerce, and holding companies.
Monthly filings, payroll, and social security contributions (CCSS)
Companies with employees must comply with monthly tax filings, payroll documentation, and mandatory enrollment in the Costa Rican Social Security system (Caja Costarricense de Seguro Social – CCSS).
Employers are responsible for contributions covering health insurance, pensions, and labor risk insurance. These payments are calculated based on gross salaries and must be submitted on a monthly basis.
Company registration timeline
The company registration process in Costa Rica is efficient and structured, with most companies fully incorporated within a few weeks. Whether setting up remotely or on-site, understanding the timeline and requirements helps streamline the experience.
Government agencies involved and required documents
Several agencies oversee business incorporation, including the National Registry, Central Bank (BCCR), Ministry of Finance (Hacienda), and the Costa Rican Social Security Fund (CCSS). Notaries play a key role, as incorporation must be executed via public deed.
Key documents include the Articles of Incorporation, identification for all shareholders, and a power of attorney if registering remotely.
Estimated timeline (2–4 weeks depending on activity type)
On average, the incorporation process takes 2 to 4 weeks, depending on the type of activity, company structure, and bank processing times. For most standard businesses, registration is completed in less than a month.
This estimate includes legal preparation, registry filing, tax registration, and bank account setup.
Step-by-step: how to incorporate a company in Costa Rica
Determine the right entity type based on ownership needs, capital flexibility, and intended activity. Both structures offer limited liability and allow full foreign ownership.
Choose a unique name and confirm its availability with the National Registry. Draft the Articles of Incorporation in Spanish, outlining the company’s name, purpose, address, capital, and governance.
A licensed Costa Rican notary must prepare the public deed of incorporation. Submit the notarized documents to the National Registry to establish legal personality.
Once registered, the company will receive a Cédula Jurídica, which is the legal identification number required for contracts, tax filings, and banking.This ID confirms the company's formal recognition by the state.
Register with Hacienda for income tax and VAT, and enroll with CCSS for employee contributions. These registrations are mandatory for operating legally and hiring staff.Filing must be done promptly to avoid penalties.
Select a local or international bank in Costa Rica. Submit company documents, identification, and compliance forms. The account is essential for capital deposits, payroll, and transactions.Bank onboarding typically takes 1 to 3 weeks.
Depending on your industry, you may need additional permits from health, environmental, or municipal authorities. This applies to activities such as food services, fintech, tourism, or manufacturing.Complying with these requirements ensures smooth business operations from day one.
Costa Rican business culture & practices
Professional but personal communication style
Business interactions in Costa Rica are polite, formal, and relationship-driven. While professionalism is expected, there is also an emphasis on building personal rapport, especially when negotiating or forming partnerships.
Face-to-face meetings and respectful dialogue are valued, and communication tends to be collaborative rather than confrontational.
Emphasis on trust, compliance, and environmental standards
Costa Rican business culture prioritizes legal compliance and transparency. Companies are expected to adhere closely to regulatory standards, particularly in areas such as tax, labor law, and corporate governance.Environmental responsibility is also important. Many sectors must comply with strict sustainability and ecological regulations, especially when seeking permits or government incentives.
How C2Z advisory can help you succeed in Costa Rica
At C2Z Advisory, we support clients with seamless global execution, guiding you through every stage of your Costa Rican market entry. Our international presence allows us to tailor solutions to your unique business goals.Whether launching remotely or on the ground, our team ensures that your entity is properly structured, compliant, and operational from day one.
Incorporation, tax setup, and banking assistance
We handle every aspect of company formation, from drafting legal documents to completing the necessary filings with Costa Rican authorities. We also assist with tax registration, VAT setup, and social security onboarding.When it comes to banking, we help you navigate KYC requirements, identify the right institution, and open your corporate bank account efficiently.
Licensing, residency, and long-term compliance support
C2Z offers full support with sector-specific licensing, immigration options such as the investor or digital nomad visa, and ongoing compliance services. We ensure your business stays in good standing with annual filings, tax declarations, and local obligations.With our expertise and global footprint, we’re committed to helping you succeed, from A to Z, in Costa Rica’s dynamic and forward-looking market.
Frequently asked questions
Yes. Foreigners can own 100% of a company in Costa Rica, with no requirement for a local shareholder or partner. This applies to most sectors, including services, trade, and international operations.
There are also no residency requirements to incorporate, making Costa Rica highly accessible to international founders.
The most frequently used structures are the Sociedad de Responsabilidad Limitada (S.R.L.) and the Sociedad Anónima (S.A.). Both provide limited liability, but differ in corporate governance and share transferability.The S.R.L. is often preferred for smaller or closely held businesses, while the S.A. suits larger companies or those with a board of directors.
The company registration timeline in Costa Rica typically ranges from 2 to 4 weeks. This includes notarization, registration with the National Registry, obtaining a tax ID, and opening a bank account.Remote incorporation is possible with a power of attorney, allowing international founders to complete the process without traveling.
Yes. Companies operating under Costa Rica’s Free Trade Zone Regime can benefit from significant tax exemptions, including 0% income tax, VAT relief, and customs duty exemptions for up to 12 years.
These incentives are ideal for exporters, manufacturers, and technology-driven firms looking to reduce operational costs.
Companies must meet several monthly compliance duties, including VAT filings, payroll reporting, and social security contributions through the CCSS. These obligations apply even if no income is generated locally.
Timely filing and payment are essential to maintain good standing and avoid penalties or legal issues.