Costa Rica Business Start Up, is it really that complicated?

Because Costa Rica is still a developing economy, we believe that small and medium enterprises are fundamental for the short and long term growth of our economy. Having that in mind we express in a few lines the simple version of how to start up a Costa Rican business.

In order to conduct business in Costa Rica, foreigners can do it through the incorporation of Costa Rican Companies, according to our Commerce Code. The procedure for establishing an enterprise in Costa Rica is the following:

STEP 1
To determine what type of corporation will be used. There are two options:
 Sociedad Anónima (S.A.) operates with four members called the Board of Directors, which are the President, Secretary, Treasurer and Auditor. Commonly used in complex business, requires more formalities than an S.R.L.
 Sociedad de Responsabilidad Limitada (S.R.L.): applies for smaller business, requiring a minimum of two members when incorporating, afterwards, it can be managed by only one person.

STEP 2
Once the decision is made, the company has to be registered before the Mercantile Section at the National Registry, and to acquire the corporate identification number. In order for this, the notary public has to elaborate the corporation charter after verifying the proposed name isn´t already registered for another company. He also has to publish an edict in the official daily newspaper, "The Gazette", consisting on a brief mention of the creation of the company, to let the public now. However, there´s no need to wait for the publication, presenting the paid receipt is enough. The corresponding stamps have to be cancelled too.
Moreover, after the registration in the Mercantile Registry, the company has to be registered also as contributor in the General Income Tax Office, since the entity will perform an economic activity.
In some cases, when the entrepreneur is eager to start his business, or for any urgent purposes, there are already made corporations, which have already completed this registration process.

STEP 3
To get a Work Risk Insurance for the company´s employees before the local insurance agency, as well as registering the company before the social security institution.

Step 4
Once the previous requirements are fulfilled and the company is duly registered, the ideal is to have an open office, or a place where the business will be located. Before choosing the place, the person has to respect of the zoning regulation, since not all areas allow commercial activity. In the case of those areas where it is allowed, a Zoning Permit is issued.

STEP 4
The company has to apply for a Health Permit, an operation certificate issued by the Ministry of Public Health.

Step 5
After the Health Permit is granted, the company has to apply for a Municipal Business License, issued by the corresponding city hall.

Step 6
Finally, an account processing and the registration of trademarks under the company´s name before the Industrial Property Registry proceeds.

As you can see the procedure is fairly simple, however it requires experience with the local bureaucracy.