Costa Rica: Commercial Societies. A practical guide to choosing the right legal structure

Costa Rica stands out as an exceptional location for establishing a commercial company thanks to its deep political stability and democratic strength. As a nation that abolished its army decades ago and maintains a peaceful and predictable environment, it offers minimal country risk and the legal certainty necessary to protect long-term investments, a crucial factor for any international commercial operation.

The country offers a unique competitive advantage with its highly qualified and bilingual workforce, formed by a solid educational system. This human talent, specialized in areas such as technology, engineering, and services, is also productive and adaptable. This advantage is complemented by a modern infrastructure of business parks and free zones, as well as privileged logistical connectivity that facilitates access to key markets in North and South America.

Costa Rica provides a highly attractive business ecosystem thanks to its network of free trade agreements, which guarantee preferential access to markets representing the majority of global GDP, and robust tax incentives for companies under special regimes. This environment is enriched by a country brand associated with sustainability, with mostly renewable energy, and a very high quality of life that facilitates the attraction and retention of the best international talent.

Types of companies in Costa Rica

Choosing the right type of company is one of the first and most important steps when setting up a business in Costa Rica. The legal structure selected will not only determine the internal organization of the company but also its tax obligations, legal liabilities, financing capacity, and growth possibilities. This decision is particularly relevant in a country like Costa Rica, whose legal system offers several alternatives adapted to different business needs.

In this article, we explain the main types of commercial societies that can be incorporated in Costa Rica, their essential characteristics, minimum capital, advantages, disadvantages, the step-by-step incorporation process, and key aspects that every entrepreneur, investor, or businessperson should know before formalizing their project.

1. Public Limited Company (S.A.)

The Public Limited Company (Sociedad Anónima) is one of the most used corporate forms in Costa Rica, especially for medium and large companies. It is characterized by the separation between ownership (shareholders) and administration (Board of Directors).

Main characteristics:

Requires a minimum of two shareholders (natural or legal persons).
Capital is divided into shares.
Shareholders’ liability is limited to the amount of their contributions.
Must have a Board of Directors (President, Secretary, and Treasurer at a minimum).

Minimum capital:

There is no legally required minimum share capital, but it is recommended to contribute at least 10,000 colones (approximately $20) as a symbolic value, divided into nominative shares.

Advantages:

Flexible structure for large projects.
Facilitates the participation of new partners through the transfer of shares.
Allows for the issuance of different classes of shares (ordinary, preferred, with limited voting rights).

Disadvantages:

Greater formality and operating costs.
Obligation to maintain accounting, minute, and shareholder books.
Requires more procedures to modify its structure.

2. Limited Liability Company (S.R.L. or LTDA.)

This is a very common form among SMEs and family businesses in Costa Rica. Its structure is simpler and less formal than the S.A., although it is also regulated by the Commercial Code.

Main characteristics:

Requires a minimum of two partners.
Capital is divided into quotas (not shares).
There is no Board of Directors; one or more Managers are appointed.
Quotas cannot be freely transferred without the authorization of the other partners.

Minimum capital:

There is also no mandatory minimum capital. A symbolic figure is recommended as with the S.A., although it must be divided into indivisible social quotas.

Advantages:

Simpler to manage.
Ideal for closed or family businesses.
Lower formal and accounting burden.

Disadvantages:

3. Individual Limited Liability Company (E.I.R.L.)*

A figure designed for individual entrepreneurs who want to limit their liability without partnering with other people.

Main characteristics:

Incorporated by a single person (natural or legal).
The company’s assets are independent of the owner’s personal assets.
No Board of Directors or Assembly is required.

Minimum capital:

There is no legal requirement for minimum capital, although the initial capital amount must be clearly stated in the incorporation act.

Advantages:

Protection of personal assets.
Does not require partners or a complex structure.
Allows for the formalization of sole proprietorship economic activities.

Disadvantages:

Limited capacity to attract external investment or grow with partners.
May be perceived as having less solvency or commercial projection.

4. General Partnership

One of the most traditional figures in commercial law, now rarely used due to the unlimited obligations it imposes on partners.

Main characteristics:

All partners are unlimitedly liable for social debts.
There is no separation between social and personal assets.
Administration falls to the partners themselves.

Minimum capital:

No legal minimum capital is required, but it must be clearly defined in the social pact.

Advantages:

Trust between partners can be high.
Low cost of incorporation and operation.

Disadvantages:

Not recommended for risky operations or those involving outside third parties.
Personal asset risk for partners.
Difficult access to external financing.

5. Limited Partnership (Simple or by Shares)

Allows for the coexistence of managing partners (unlimitedly liable) and limited partners (liable only up to their contribution). It is an intermediate figure between a general partnership and a corporation.

Types:

Simple Limited Partnership: without shares, with general and limited partners.
Limited Partnership by Shares: capital divided into shares; limited partners are only liable for their investment.

Minimum capital:

There is no legal minimum amount, but it must be stated in the social pact and is subject to the contributions committed by limited and managing partners.

Advantages:

Combines flexibility in investment with operational control.
Suitable for projects where one or a few partners manage and others only invest.

Disadvantages:

Little use in modern business practice.
Legal and accounting complexity.

Procedures for incorporating a company in Costa Rica

The process of incorporating a company in Costa Rica follows a series of relatively standardized steps, although they may vary slightly depending on the chosen corporate type. The general procedure is detailed below:

Registration with the INS (National Insurance Institute): To insure occupational risks.

Definition of the corporate type: Evaluate business needs and select the most appropriate legal structure (S.A., S.R.L., E.I.R.L., etc.).

Drafting of the social pact: Document containing the bylaws, social object, capital, shares, management bodies, domicile, etc. It must be prepared with the advice of a lawyer and signed before a notary.

Registration in the National Registry: The notary presents the deed testimony in the Registry of Legal Entities. This grants legal existence to the company.

Publication in La Gaceta: Official announcement that publicizes the creation of the company (except in some figures like the E.I.R.L.).

Obtaining the corporate ID (cédula jurídica): This is the equivalent of the NIF in Spain. It is obtained after registration and allows for legal operation.

Registration with the General Directorate of Taxation: Registration of the company as a taxpayer. Tax obligations (VAT, income tax, withholdings, etc.) must be declared.

Opening a bank account: It is recommended to open an account in the company’s name to record economic movements.

Obtaining municipal patents and permits: Depending on the canton where the company is located, patents, land use permits, health licenses, etc., must be processed.

Affiliation with the CCSS (Costa Rican Social Security Fund): If there are employees, it is mandatory to register as an employer.

Practical tips for structuring a company in Costa Rica

Comply with annual obligations: Filing declarations, paying taxes, updating legal books, etc.

Do not improvise the corporate type: Evaluate the number of partners, type of investment, risk level, and future projection before choosing the structure.

Partner with transparency: Define the rules of the game from the start. Draft a shareholders’ agreement if there is more than one member.

Plan fiscally: Some structures can optimize taxes, especially in businesses involving exports or professional services.

Think about scalability: If you expect to attract foreign investment or expand, an S.A. usually offers greater flexibility.

Are you thinking of starting a business in Costa Rica?

Costa Rica is not just a place on the map; it is a living ecosystem of opportunities, where stability meets innovation and nature embraces progress. Here, entrepreneurship is not just an idea, it is a reality built day by day with passion, talent, and vision. Costa Rica invites you to be part of something bigger: to contribute to a community that believes in sustainable growth, limitless creativity, and a tomorrow full of possibilities.

Costa Rica offers a varied and flexible range of corporate figures for entrepreneurs and companies, from sole proprietorship structures to complex societies with share participation.

At IN DIEM Abogados, we assist in the process of choosing and incorporating commercial societies in Costa Rica, starting from the premise that it should not be based on intuition or what others have done, but on a realistic and advised analysis of the business’s needs. In this sense, we help our clients make this decision with security and knowledge. We accompany the entire process of company incorporation in Costa Rica, from initial planning to final registration, with a legal, business, and fiscal vision. We also provide annual compliance services, legal maintenance, and drafting of shareholders’ agreements.

If you are thinking of investing, starting a business, or structuring a corporate operation in Costa Rica, do not hesitate to contact us. We design tailor-made corporate structures, intended to protect your assets, facilitate your growth, and comply with all legal requirements.

How can we help you?

IN DIEM Abogados has extensive experience and a high degree of specialization in the area of Corporate Law, offering comprehensive advice on participation and investment processes in commercial societies.

Among the services we offer, the following stand out:

Analysis and strategic planning: We study the most appropriate options to choose the jurisdiction that best fits the fiscal, operational, and legal needs of your business.
Comprehensive management of the acquisition process: We draft and formalize social bylaws, shareholders’ agreements, family protocols, etc.
Intervention in conflicts and defense of partners: We advise on conflict processes, as well as on the protection and defense of partners’ rights.
Fiscal and legal optimization: We design structures that minimize legal and fiscal risks, taking advantage of the benefits of international treaties and local regulations.

Contact IN DIEM Abogados 24 hours a day, any day of the week, without obligation. We guarantee the best possible result, whatever your case may be.

Personalized and professional attention
Assistance throughout the judicial or notarial process
24-hour contact with your expert lawyer in corporate law
Absolute confidentiality

Publications about Societies on our blog

Expert lawyers in Societies: Malaga, Seville, Madrid, Las Palmas de Gran Canaria, Almería, Huelva, Marbella, Estepona,…

IN DIEM Abogados has a team with experience in previous roles such as Magistrate-Judge, State Attorney, Prosecutor, or University Professor, which will provide you with peace of mind and security, having the best, competitive, and highly prepared team to achieve your goals and cover your needs.

We are at your disposal for whatever you need. You can reach us via the IN DIEM Abogados Phone (+34) 916 353 892. For emergencies, you can find us at the IN DIEM 24-Hour Emergency Phone: (+34) 610 667 452.

Did you know that IN DIEM Abogados has online and urgent services?

We offer our clients the possibility of being assisted by video call or videoconference, as well as by telephone, according to our clients’ preference, so that the assistance is as personal as possible, with absolute immediacy, without the need for travel. This service is complemented by communication via email, which facilitates the analysis and delivery of documentation.

Likewise, we have urgent and 24-hour services for our companies, handling national and international contracting operations.

For more information on the Online Legal Advice Service HERE, the 24-hour and Urgent Service HERE, and some recognitions, we leave you this link.