Expat entrepreneurs are in luck if they’re looking at Costa Rica as their next home. This country has a culture that’s business-friendly for those looking to start fresh somewhere new. Unlike most other countries, there aren’t any restrictions in Costa Rica on foreign business ownership. You don’t even have to be a resident. You can simply get a standard, 90-day tourist visa and start your own business in Costa Rica. Here’s how to move along from that point.
Know the Rules
While you don’t have to be a resident to own a business in Costa Rica, you also can’t work within that business. Costa Rica doesn’t want to lose jobs that could go to locals, so don’t go around bussing tables or anything. Your job is simply to own the business.
Choose Your Business Type
Will you have a sole proprietorship or a corporate entity? Of course, this will depend on the type of business you’re looking to run, but the most common type of business in Costa Rica is the SA, or “Socio Anonima.” This type of business is a corporation that’s only liable to the capital contribution of the shareholders. Your personal income and assets are not at risk, which explains why it’s such a popular choice. Many business owners with the SA-type business put their assets – such as vehicles and real estate holdings – in the name of the SA to protect them.
Find an Attorney
It’s always advisable to find a local attorney who can guide you through the legal processes of starting a business in Costa Rica. Creating a corporation will be complex, so the help of a knowledgeable attorney will come in handy. He/she will help you through the process of getting the paperwork filed for your new business, and this will most likely cost you somewhere between $800 and $1,000, depending on your business and attorney’s fees. It can sometimes be more, but these numbers are standard.
When it’s time, a public notary will draft and notarize public deeds of your charter for registration before the Mercantile Section of the Public Registry. This is done online and will take less than a day. Once that’s done, you’re registered and ready to get started working on your business in Costa Rica!
Obtain the Necessary Licenses
To get the ball rolling, you’ll need to get an operators license, which is called a “Patente Comercial,” and that license refers to the nature and details of the business. It also includes a zoning request certification, called a “Certificado de Uso de Suelo.” This gives you the authority to run your business from the location you’ve chosen.
Depending on what kind of business you’ve chosen to run, you may need other licenses, or even patents. For example, if you’re running a restaurant, spa, or salon, you’d need a certificate from the minister of health. Your attorney can help guide you through getting the proper and necessary licenses and patents for your specific type of business.
Open a Costa Rican Bank Account
It’s required that you have a Costa Rican bank account in order to run your business, and it’s a little easier said than done. In the United States, you can simply walk into a bank and open an account. In Costa Rica, there’s a fair amount of paperwork that has to be filed first. There are prerequisites to opening an account, and it may be difficult working with local banks or tellers who may not speak English. The silver lining here is that there are a lot of different private and public banks to choose from, and some of those are international banks. Citibank, HSBC, and Scotiabank are available in Costa Rica. They usually have English-speaking tellers, but they won’t have as many ATM locations as the local, public banks. Keep this in mind when choosing your own bank, and be prepared for a hefty amount of paperwork.
Be Prepared to Pay some Taxes
Costa Rica imposes an annual business tax on corporations, so if you go this route you’ll have to pay this tax every January for the upcoming year. This tax is about $400, and it’s due whether your company makes a profit that year or not. Corporations can also expect taxes on income, assets, and annual capital. If you’re a U.S. citizen starting a company in Costa Rica, though, you can receive a foreign-earned exemption that will match your income tax, dollar for dollar, for a set amount.
The best way to handle this tricky and complex piece of the business puzzle is to hire an accountant. This person can help make sure everything is running as it should in the financial aspect of things.
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