Sociedad Anónima (Corporation)
Costa Rica continues to emerge as a strategic location for global business operations, thanks to its reliable political environment, favorable geographic position, and investor-friendly corporate framework. Among the legal structures available, the Sociedad Anónima (S.A.)—the Costa Rican version of a corporation—remains a preferred format for entrepreneurs seeking scalability, flexibility, and access to international markets.
A Sociedad Anónima is a company limited by shares and is widely recognized as a robust vehicle for businesses planning to expand or raise capital. It is often chosen by medium to large enterprises, as well as foreign investors intending to establish a formal presence in Costa Rica.
Defining Features:
Share-Based Ownership: Unlike SRLs (which are quota-based), S.A.s are capitalized through shares, which can be freely transferred unless restricted by the bylaws. This feature makes them well-suited for investors or groups seeking easier ownership mobility.
- Capital Flexibility: There is no statutory minimum capital requirement, though at least two shares must be issued at incorporation. Share capital can be denominated in foreign currency such as USD, enhancing flexibility for international investors.
- Incorporation Requirements: A minimum of two shareholders is required to form an S.A. However, after the company is formed, it is legally permissible to consolidate shares under a single shareholder.
- Governance: Corporations must appoint a board of directors, consisting of at least three officers: a president, secretary, and treasurer. All directors may be nonresidents and foreign nationals, providing convenience for international management teams.
Following the enactment of Law 10729, Costa Rica has introduced a major change in the registration process. As of 30 May 2025, new companies are no longer required to select a traditional business name during incorporation.
Instead, companies are now assigned a unique legal identification number (cédula jurídica) by the National Registry, which serves as their official name. For example:
• “1244214, S.A.”
That said, companies may still register a commercial or trade name (“nombre comercial”) through the Intellectual Property Office, which can be used for branding, marketing, and public communications.
Costa Rica operates under a territorial tax system, meaning only income earned within the country’s borders is subject to corporate taxation.
Corporate Income Tax Rates:
- Standard Rate: 30% on net taxable profits derived from Costa Rican sources.
- Reduced Rates for Small Entities: For companies with annual revenues not exceeding CRC 122,145,000, corporate tax is assessed on a progressive scale: 5% to 20%, depending on revenue tiers.
Foreign-Sourced Income
Companies operating exclusively outside Costa Rica, with no local transactions or operations, are exempt from corporate taxes. This offers significant advantages for international entities using a Costa Rican S.A. as a vehicle for:
- Global consulting and trading
- Digital services
- Investment holdings
Compliance Requirements for S.A.s
While incorporating and running a corporation in Costa Rica is relatively straightforward, companies must meet several ongoing regulatory obligations.
Legal Domicile and Representation
Every S.A. must:
- Maintain a registered office within Costa Rica
- Appoint a resident agent to handle legal correspondence
Beneficial Ownership Disclosure
Under anti-money laundering legislation, all Costa Rican companies must submit an annual declaration of their ultimate beneficial owners (UBOs) to the Central Bank of Costa Rica.
Accounting and Reporting Obligations
- Bookkeeping: Companies must maintain accounting records and prepare financial statements, even if they do not have local operations.
- Annual Tax Returns: A corporate income tax return must be filed each year. If the company does not generate any taxable income within Costa Rica, a zero-activity return is sufficient and generally uncomplicated.
- Audit Exemption: There is no requirement for audited financials, regardless of revenue or company size, unless specifically required by sector regulations.
The Sociedad Anónima structure offers a professional, internationally familiar framework for conducting business in Costa Rica. Its flexibility in shareholding, foreign ownership, and capital requirements make it especially well-suited to international investors and companies with complex ownership or scaling ambitions.
Thanks to the recent update eliminating mandatory naming at incorporation, forming a Costa Rican S.A. has become even more efficient. When paired with the country’s territorial tax regime and minimal compliance burden, the S.A. remains a powerful and practical option for businesses looking to operate from, or through, Costa Rica.
Legal
Country code – CR
Legal basis – Civil law
Legal framework – Código de comercio
Company form – Sociedad Anónima (S.A.) (Corporation limited by shares).
Liability - The liability of the shareholders for the company is limited to the amount of their respective shareholdings.
Company Name - Since 30 May 2025, new Costa Rica companies no longer have a company name. They are automatically assigned a unique legal entity identification number (cédula jurídica) by the National Registry which serves as company name e.g. "1244214, S.A.". This change was implemented through Law 10729, which amended the Costa Rica Commercial Code.
Share capital – There is no minimum standard authorized and issued share capital but the company must issue at least 2 shares at the time of incorporation. Share capital may be in a non-paid up basis. It may be denominated in CRC or USD.
Shareholders – Corporations in Costa Rica may be formed by two shareholders, but after incorporation, the company may have 1 or more shareholders. Shareholders may be either natural or legal persons, residents or non-residents, without restrictions. Details of shareholders may not be available to the public.
Directors – At least three directors and officers. President, treasurer, and secretary, who may be simultaneously directors and officers. They should be natural persons. Directors’ details are available in the National Registry. Nominee directors are permitted.
Secretary – A secretary is required who may be an individual or a corporation, resident or non-resident. Director may also act as company secretary.
Registered Address – Corporations managed by nonresidents must have a registered office and resident agent located in Costa Rica.
General Meeting – Annual general meetings must be held but they can be held anywhere in the world and they may be by proxy.
Electronic Signature – Permitted.
Re-domiciliation – Inward and outward re-domiciliation is not allowed.
Compliance – Costa Rica companies are required to keep accounting records and underlying documentation.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Civil law Legal basis
- 1 Minimum shareholders
- 3 Minimum directors
- - Minimum issued capital
- - Minimum paid up capital
- CRCUSD Capital currency
- Anywhere Location of annual general meeting
- 2018 AEOI
Taxes
Tax residency – A company is tax resident in Costa Rica if is incorporated under Costa Rican law. However, both resident and nonresident companies are taxed only in Costa Rican-source income.
Basis – Corporate taxes in Costa Rica are levied according to the principle of territoriality.. Both resident and non-resident companies are subject to tax on their income derived from Costa Rica. Foreign-source income is not subject to taxation, whether remitted or not.
From a source of income perspective, income generated exclusively in the territory of Costa Rica from services rendered, goods located, capital invested, and rights used in Costa Rica is considered Costa Rican-source income.
Tax rate – The standard corporate tax rate in Costa Rica is 30%.
However, small companies whose gross income does not exceed 119,629,000 CRC, taxes may be levied according to the following rates:
- 5% on the first CRC 5,642,000 of annual net income.
- 10% on the excess of CRC 5,642,000 and up to CRC 8,465,000 of annual net income.
- 15% on the excess of CRC 8,465,000 and up to CRC 11,286,000 of annual net income.
- 20% on the excess of CRC 11,286,000 of annual net income.
Capital gains - Locally-sourced capital gains are taxes at a 15% tax rate in Costa Rica.
Dividends - Dividend payments from a Costa Rica resident company are generally exempt from taxes, unless the Costa Rica paying company is not subject to tax and does not carry out an economic activity. Dividends from foreign companies are generally deemed offshore income and thus not subject to taxes.
Interests - Locally-sourced interest income is subject to taxation at a 15% tax rate unless interest income constitutes income from usual business activities (e.g. financial services companies, lenders, etc), and in such case it will be subject to the standard corporate tax rate. Interest income paid by foreign borrowers is generally exempt from taxes unless the Costa Rican lender is part of a multinational group, the paying company is part of such multinational group and is deemed as a non-qualified entity.
Royalties – Royalty income is subject to 15% corporate tax unless such royalties arise from the usual business activities of the company, and in the latter case, such royalties will be taxed at standard corporate tax rates. Royalties paid by foreign licensees are generally exempt from taxation unless the Costa Rican licensor is part of a multinational group, the paying company is part of such multinational group and is deemed as a non-qualified entity.
Withholding taxes – Distribution of dividends to nonresidents arising from profits derived from Costa Rica may be subject to a final withholding tax of 15%.
Interest payments and royalties from rights used within Costa Rica paid to non-residents are subject to a withholding tax of 15%, and 25%, respectively.
Services performed by a foreign company in Costa Rica may be subject to 25% withholding tax.
Losses – Losses may not be carried forward, unless the company activitites are of an industrial or agricultural nature
Inventory - Inventories are generally stated at cost and may be valued using the first in first out method (FIFO), retail method, or specific identification method.
Anti-avoidance rules – Transfer pricing rules are applicable for all transactions with non-domiciled related parties for Costa Rica companies generating locally-sourced income.
Costa Rica has not enacted thin capitalization rules (although there is a 20% limit on the deduction of non-bank interest), nor controlled foreign companies regulations.
Labor taxes – Employers and resident employees are required to make contributions to the Social security at 5.58% and 4.33% on employees’ monthly income, respectively, without a maximum limit amount.
Tax credits and incentives – There are exemptions from import duties, income tax, VAT, export tax, selective consumption tax, real estate transfer tax, and withholding tax for companies established in Freezones.
Personal income tax - An individual is tax resident in Costa Rica if he or she spends more than 183 days in a fiscal year within the territory, continuosly or discontinously.
Costa Rica taxes its residents’ income earned within the territory at progressive tax rates between 10% and 25%, the latter applying to income over 4,745,000 CRC (employed), and 20,442,000 CRC (self-employed)
Capital gains and dividends are taxed separately at a tax rate of 15%.
Other taxes – There is a property tax of 0.25%, and a real estate transfer tax of 1.5% on the transfer of property.
VAT is imposed at 15%.
There are no wealth and inheritance taxes in Costa Rica.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- 30% Corporate Tax Rate
- 15% Capital Gains Tax Rate
- 15% Dividends Received
- 15% Dividends Withholding Tax Rate
- 15% Interests Withholding Tax Rate
- 25% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- 0 Losses carryforward (years)
- FIFO Inventory methods permitted
- 4.33% Social Security Employee
- 5.58% Social Security Employer
- 25% Personal Income Tax Rate
- 13% VAT Rate
- 24 Tax Treaties
Country details
Costa Rica is a Caribbean country located between Panama and Guatemala and a member of the CARICOM. It has just over 51,000 sq. km of land and almost 5 million inhabitants. Its capital and political, cultural, social and economic center is San Jose, and its official currency is the Costa Rican Colón (CRC), although the US Dollar is widely accepted.
Costa Rica is often called the 'Switzerland of Central America', because of its pleasant lifestyle, lack of army, stable democracy and its impressive natural beauty; its considered the happiest, most ecological, green and sustainable country on the planet. Costa Rica is one of the most progressive, developed and stable countries in the Americas, with an emphasis on the environment, freedom of the press, security, equality, democracy, health and education.
Its main economic sectors are tourism, high technology industrial manufacturing, agriculture, forestry and fisheries. It is the most visited country in Central America, with around 25% of the region's tourism market share. Americans account for about 40% of all tourists. Costa Rica has traditionally been an attractive jurisdiction to set up a company conducting international trade business, due to its territorial tax system and its free trade areas.