The first 90 days: what you need to know to start a business in Costa Rica
Article 5 minute read

The first 90 days: what you need to know to start a business in Costa Rica

10 September 2018

If you are thinking of starting a business in Costa Rica, here is all you need to know to get through the first 90 days.

Costa Rica continues to be one of the most attractive Latin American countries in which to do business, with a relatively stable economy and high economic growth but it is not without its challenges. Starting a business in Costa Rica has become a little easier by utilizing online processes but it is still complex. 


The first step to starting a business is choosing the type of entity, a corporation, a limited liability company (LLC) or a branch. 

For a corporation:

  • you must pick four members for a Board of Directors (they can be foreigners);
  • two shareholders must also be assigned.

For a LLC:

  • a general manager must be picked (can be more than one);
  • there is no board of directors but two shareholders are needed to form the company.

For a branch:

  • the legal representative of the parent company must sign the constitution prepared and notarized by the Costa Rican Notary Public, making the process more complicated.

The next step is to choose a name for the entity. It is recommended to have three options in case the name is already taken or it is rejected by the registry. At this point, you can choose a legal representative for the entity. It can be a foreigner and you can appoint more than one person, but it is recommended to choose someone local, a resident or citizen of Costa Rica to have a power of attorney to represent the company in the country. There are requirements with some government agencies, such as obtaining a digital signature, that cannot be met by a someone who is not a resident or citizen. 

If the company does not have a physical office in Costa Rica, they will have to find an address to register as domicile before the National Registry. This address will be where notifications will be sent as well as where the accounting books are held. 

Registering the company

After these steps, a lawyer can create the incorporation documents.  The lawyer will provide shareholder proxies and letters for the acceptance of each position of directors and legal representative which will need to be signed by each individual. Each Director and legal representative will need to provide a copy of their legal identification, which, in the case of the foreigner, must be a passport. The company must be put in the Mercantile Registry which can be processed online or in person. This process can take 7-10 business days. 


The second process is the setting up the taxes for your company with the tax authority. You must provide information about all the business activities that will be carried out by the company in the territory of Costa Rica. 

As part of the process of tax registry, the electronic books need to be authorized and obtain the digital signature if the local legal representative does not have this in their possession. The digital signature can be obtained through your bank. If the legal representative is a foreigner, the passport must be up to date and a letter from the legal representative stating the country of residence must be notarized and apostilled. This process of registration with the tax authorities must be done in person and it takes one day but if there are questions or the tax authorities reject the forms it can take longer. 

To file taxes, the legal or fiscal representative that you chose will be responsible for setting up the ATV (the Virtual Tax Administration) account. Tax filings must be filed online through this service. As of 2018 September, electronic invoicing will be mandatory. This will also need to be set up to be compliant locally. Additional authorized ATV users can be created by the ATV user, but the person who presents the tax return is the person that takes full responsibility under the law for the content of the return.

To implement electronic invoicing in the case the legal representative is a foreigner, you must request from the tax administration a cryptographic key.  Only the legal representative can generate the cryptographic key.

All companies formed after November 2018 will be required to use electronic invoicing.  The tax administration offers a free system, but it is slow and unreliable after the 10th invoice monthly.

Social Security

If the company hires employees then they will file with Social Security and Instituto Nacional de Seguros (INS) which resembles workplace compensation. These offices both require submission of a copy of the contract of the employee as well as the employee’s identification and the monthly salary. INS also requires Ultimate Beneficiary Owner( UBO) information when setting up the account for the company. 

The process of being registered fully with Social Security can take about a month. After filling of the proper forms and submitting them in person, there is a verification process where an inspector comes to the office or domicile and interviews the employees. Only after that interview is completed, the payroll can be opened for the company. 

Workplace compensation works differently in Costa Rica. INS determines the fee based on the risk involved in the companies day to day activities. The payments are either quarterly, semi-annually, annually but it is paid upfront and based on the estimated salaries of your employees. 

Bank account

Obtaining a bank account in Costa Rica is a very bureaucratic process. The banks have a supervisory entity that has many mandatory requirements. Both FACTA and CRS forms must be filled out that indicate the classification of the company. The bank also needs UBO information on anyone that has 10% or more in the company. A notary must provide verification that the information is correct. These processes take time, leading to a total of about 4-8 weeks on average to open a bank account. 


It is important to know that everything submitted to government agencies must be in Spanish. All forms, contracts and documents must be written in Spanish as it is the official language of Costa Rica.

TMF Group

TMF Costa Rica is experienced in supporting all aspects of opening and running a business in Costa Rica. Our team of professional is well versed in local laws and regulations, assisting local and international clients, providing financial, legal, HR and payroll services across the country. To find out more, talk to us.

Written by

Lyndsey Wheeler

Global A&T Operations Director

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