We have vast experience in forming companies in Costa Rica and abroad. We can guide you in the right direction when incorporating in Costa Rica. Should you use a Costa Rican LLC (Sociedad de Responsabilidad Limitada) or a Costa Rica corporation (Sociedad Anonima). What are the differences ? Ask Us and we will gladly guide you to make the right decision.
How to Form a Company
To form a Costa Rican corporation, the Commercial Code requires that at least two individuals execute before a Notary Public the articles of incorporation and subscribe at least one share of stock each. There is no requirement that the incorporators be either residents or citizens of Costa Rica. A citizen of any country can incorporate in Costa Rica. The articles of incorporation by law must contain the following information:
(1) Incorporation Date: The articles must specify the date and the place where the corporation is formed; (2) Identification of the Incorporators: Include the name, nationality, identification number for each incorporator. In the case of Costa Ricans it is their national identity card (cedula) and for non Costa Ricans their passport number or residency card number. The incorporator must also set forth their occupation, marital status, and domicile; (3) Corporate Name: There are two options in forming a corporation. The registrar can assign the corporation its identification number which is generally in the following format 3-101-123456. When the corporation is formed in this manner the number becomes the name of the corporation as well. If you do not want a number as the name of the corporation then you must select a name that is unique and that bears no resemblance to corporate names already recorded. The name can be either in Spanish or English. The initial step in setting up a corporation is to ensure that the name you want is available for registration; (4) Corporate Purpose: In Costa Rica the corporate purpose is generally stated in very broad and encompassing terms unless the incorporator wishes to limit the purpose; (5) Duration: The articles of incorporation must list the duration and its possible extensions. The law prohibits an indefinite term and the most common practice is to list a duration of ninety-nine years to avoid doing extensions on the term; (6) The Capital Stock: The amount of authorized capital and the manner in which it shall be subscribed must be set forth in the articles of incorporation; (7) The Capital Contribution: The incorporator must indicate the manner in which the capital is paid, whether by cash, property, or other capital contribution of the shareholders; (8) The Legal Domicile: The Costa Rican corporation must have a legal physical location within Costa Rica. In addition the articles of incorporation can specify that the corporation may have offices or branches in countries outside of Costa Rica; (9) The Board of Directors: The corporation by law must have a President, Secretary and Treasurer. There are no nationality requirements for these positions. The articles of incorporation must name the persons that will occupy those positions at the time of incorporation. The same person may not occupy two or more positions. You need to have a different person for each of the required positions. Those named to the Board must either be present in order to sign the articles of incorporation or, if they are not incorporators then they can accept their positions by way of letters of acceptance; (10) The Enumeration of Powers: Within the articles of incorporation you must specify the type of power that each of the directors or officers will have to bind the corporation. Alternatives are having only the President with unlimited power of attorney or having the President and Secretary acting jointly to have unlimited power of attorney. How this is set up depends solely on your requirements. (11) Profit and Loss: The law requires that the articles of incorporation indicate how the allocation of profit and losses will be handled; (12) Dissolution: The articles of incorporation must indicate how the corporation will be dissolved or liquidated; (13) Resident Agent: A Costa Rican corporation must also name a Resident Agent if the President of the corporation is not residing in Costa Rica. The Resident Agent must be a Costa Rican Attorney who maintains an office in Costa Rica and is capable of receiving judicial and administrative notices on behalf of the corporation.