Costa Rica

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Country Profile

Officially the Republic of Costa Rica, Costa Rica is a country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west, the Caribbean Sea to the east, and Ecuador to the south of Cocos Island. It has a population of around 4.5 million, of whom nearly a quarter live in the metropolitan area of the capital and largest city, San José. The currency is the Costa Rican Colon (CRC).

Costa Rica has remained among the most stable, prosperous, and progressive nations in Latin America. Following a brief civil war, it permanently abolished its army in 1949, becoming the first of only a few sovereign nations without a standing army.

Costa Rica has consistently performed favorably in the Human Development Index (HDI), placing 62nd in the world as of 2012, among the highest of any Latin American nation. It has also been cited by the United Nations Development Programme (UNDP) as having attained much higher human development than other countries at the same income levels, with a better record on human development and inequality than the median of the region. Its rapidly developing economy, once heavily dependent on agriculture, has diversified to include sectors such as finance, pharmaceuticals, and ecotourism.

Company Type

The most popular form of companies in Costa Rica is Stock Corporation, which is incorporated as "Sociedad Anónima" under the Commercial Code, articles 102 ff. Costa Rica does not distinguish between onshore and offshore businesses as such. The basis of taxation is territorial, with both residents and non-residents paying tax on Costa Rican income, and not on foreign-source income.

 

Cost Rican Corporation can conduct any business which is not prohibited by local legislation. Private banking, public finance, investment funds, collective investment schemes, and pension funds are allowed, but the Government must authorize operations. Insurance and the distribution of petrol, gasoline, and diesel are prohibited as they are state owned monopolies. There are also restrictions placed on the provision of utility services such as telecoms and power. Trustee services are permitted.

 

Company Formation

All Costa Rican corporations must end with the suffix S.A., Sociedad Anónima, Ltda, Limitada, SRL, or Sociedad de Responsabilidad Limitada. The following names to be used, require licensing: Bank, Insurance, Assurance, Re-Insurance, Savings, Royal, Asset management, Fund Management, Investment Fund, Building Society, Municipal, Chartered.

Names denoting any connection to local, state or national Governments are generally prohibited. The names must be in Latin alphabet. The Registrar requires a Spanish translation.

A company is incorporated in Costa Rica by presentation of the proposed corporation's signed Articles of Incorporation before a Notary Public who creates a Public Deed for registration at the Public Registry.

 

SHAREHOLDER

A minimum of two shareholders are required which may be individuals or legal entities. The original shareholders are a matter of public record, but subsequent shareholders are a private matter. The responsibility of shareholders is limited to company assets.

 

SHARE CAPITAL

The standard authorized share capital is Colones 10,000 divided in to 100 common voting shares of Colones 100 each. The capital may be expressed in any convertible currency. The minimum issued capital is one share at par value. Registered shares, shares of no par value, preference shares, redeemable shares and shares with or without voting rights are permitted. Bearer shares are not permitted.

 

DIRECTORS

S.A. has a Board of Directors with a minimum of 3 members (President, Secretary and Treasurer) and Comptroller. Ltda has only a General Manager and Comptroller. In both cases the officers may or may not have Costa Rican citizenship, and details of the Board Members or the General Manager are part of the public record. Corporate Directors are not permitted in Costa Rica.

 

REGISTERED OFFICE AND LOCAL AGENT

Costa Rican corporations must maintain registered office and registered agent within Costa Rica. Registered agent may be corporate body or individual resident in Costa Rica.

 

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