[ESTABLISHING A BUSINESS ENTITY IN COSTA RICA] 122
ESTABLISHING A BUSINESS ENTITY IN COSTA RICA About Us Cordero & Cordero Abogados is a full-service law firm specializing in Business and Corporate Law, Foreign Investment, and Free Trade Zone Law. This firm, established in 1940, with offices in San José and Guanacaste, has earned its reputation as a top-tier law firm preferred by local and international clients doing business in Costa Rica. Cordero & Cordero Abogados has been ranked by international directories such as Chambers & Partners and other regional bar associations. The firm's staff is made up of high-level, experienced, and multilingual attorneys capable of dealing with complex matters and transactions in all of the following practice areas: Corporate & Contract Law; Foreign Investment & Free Trade Zone Law; Information Technologies & telecommunications; Real Estate; Mergers & Acquisitions; Banking, Project Finance & Insurance Law; Civil Litigation Practice; Intellectual Property; Labor & Immigration, Energy & Infrastructure Law. 1. Types of Business Entities in Costa Rica The most common types of business entities in Costa Rica are Corporations, known in Spanish as “ Sociedades Anónimas ” (also referred to as “S.A.´s”), and Limited Liability Companies, known in Spanish as “ Sociedades de Responsabilidad Limitada” (also referred to as “Limitada,” “Ltda” or “SRLA”), which the Costa Rican Code of Commerce governs. The Costa Rican Code of Commerce also establishes three other business forms: Sole Proprietorship Companies, known as “One -man companies,” Partnerships, and Collective Name Companies. No additional reference will be made to these business forms since they are
less used in Costa Rican business practice. The following summarizes general characteristics, basic steps, requirements, and obligations for both corporations and limited liability companies in Costa Rica. 2. Corporations (Sociedades Anónimas) 2.1 Incorporation All corporations must be incorporated before a Costa Rican Notary Public by at least two natural persons, two corporations, or any combination thereof. 2.2 Capital Stock The corporation is formed by the paid-in capital contribution of the founding partners in the form of Capital Shares, which will reflect the distribution of the paid capital amongst the partners. To increase (or reduce) the Share Capital, a corporation must follow the guidelines and requirements established in the Costa Rican Code of Commerce. ● Minimum Capital Stock: No minimum authorized capital stock is required for a corporation. Most corporations start up with a ¢10,000.oo capital stock (approximately. US$20.oo). ● Currency: The capital stock in a corporation can be established in a foreign monetary unit. ● Transfer: Shares are assigned by mere endorsement and by registering the assignment in the entity’s Shareholder’s Record Legal Book. The assignment of shares does not need acceptance by the assignee. 2.3 Responsibility The shareholders´ legal responsibility in the Corporation is limited to the amount of capital shares belonging to each.
ILN Corporate Group – Establishing a Business Entity Series
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