Sociedad de Responsabilidad Limitada (Limited Liability Company)
Costa Rica is an increasingly attractive jurisdiction for international entrepreneurs, thanks to its stable political climate, strategic location, and business-friendly corporate laws. Among the most popular legal forms for doing business in Costa Rica is the Sociedad de Responsabilidad Limitada (SRL)—a limited liability company that offers simplicity, flexibility, and full foreign ownership.
Legal Structure of SRLs
An SRL (Sociedad de Responsabilidad Limitada) is a private company structure, similar to an LLC in common law systems. It is ideal for small to medium-sized businesses, professional service providers, and holding companies.
Key Features:
- Ownership in Quotas: Unlike corporations (S.A.s), which issue shares, SRLs divide ownership into quotas, which cannot be freely transferred without the approval of other quota holders.
- Minimum Capital: There is no minimum capital requirement beyond zero. However, capital must be denominated in Costa Rican colones (CRC).
- Single-Member Companies Allowed: SRLs can be formed by one member (cuotista) and do not require multiple owners.
- Management: SRLs are managed by one or more managers (gerentes). There is no requirement for a board of directors. Both members and managers can be foreign and nonresident individuals.
As of 30 May 2025, Costa Rican companies no longer select a company name at registration. Instead, under Law 10729, the National Registry now assigns a unique legal identification number (cédula jurídica) which also serves as the legal name.
For example: “5128215, S.R.L.”
However, companies still have the option to register a Business Name (known as a “nombre comercial”) with the Intellectual Property Office for branding and marketing purposes.
Taxation of SRLs
Costa Rica applies the principle of territorial taxation. This means only income generated within Costa Rica is subject to local taxation.
Corporate Income Tax (CIT)
- Standard Rate: 30% on net profits.
- Progressive Rates for Small Businesses: Companies with annual gross revenues up to CRC 122,145,000 benefit from lower progressive rates: 5% to 20%, depending on income brackets.
Exempt Foreign Income
SRLs whose income is generated entirely outside of Costa Rica (i.e., from foreign business activities) are not subject to Costa Rican income tax. This makes SRLs particularly attractive for:
- International trading or consulting firms
- Investment holding companies
Operating an SRL in Costa Rica comes with straightforward compliance requirements.
Registered Agent and Address
Every company must:
- Maintain a registered address in Costa Rica
- Appoint a resident agent
Annually, all companies must disclose their ultimate beneficial owners (UBOs) to the Central Bank of Costa Rica, in compliance with anti-money laundering laws.
Accounting and Tax Filing
- Accounting Records: Companies must maintain books and prepare financial statements.
- Tax Return Filing: A corporate tax return must be filed each year, even if no Costa Rican-source income is generated. Zero-income filings are simplified and typically included in corporate services.
- Audit Requirement: Audited financial statements are not mandatory, regardless of the size or revenue of the company.
Costa Rican SRLs offer a streamlined legal structure, no capital barriers, and full foreign ownership, making them an excellent choice for both resident and nonresident entrepreneurs. With the 2025 legislative update removing the company name requirement, the setup process is even more efficient, while still allowing optional brand registration.
Combined with territorial taxation and light corporate compliance, SRLs remain a preferred vehicle for those seeking to do business in or from Costa Rica.
Legal
Country code – CR
Legal basis – Civil law
Legal framework – Ley de sociedades de responsabilidad limitada (Codigo de Comercio)
Company form – Sociedad de Responsabilidad Limitada (S.R.L.) (Limited Liability Company)
Liability - The liability of the members of the company is limited to the amount of their capital contributions.
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. “5128215, S.R.L.” or "1244214, S.A.". This change was implemented through Law 10729, which amended the Costa Rica Commercial Code.
Capital – An SRL is not subject to minimum capital requirements, although the capital cannot be 0. Capital does need not to be paid up at the time of incorporation. Capital shall be divided into quotas and issued in nominative form.
Members (Socios) – At the time of formation, the company must be formed by two members. However, after formation, the company may have 1 or more members. Members may be either natural or legal persons, residents or non-residents, without restrictions. Details of members are available in a public registry.
Managers (Gerentes) – An SRL must be managed by one or more managers who need not be members and may be natural or legal persons, residents or non-residents. Details of managers are available to the public.
Secretary – There is no legal requirement for a Company Secretary to be appointed.
Registered Address – An SRL whose managers are nonresidents must have a resident agent and maintain a registered office in Costa Rica.
General Meeting – Annual general meetings are not mandatory. However, if meetings are held, they can be anywhere in the world and 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.
- Members not disclosed
- Members not disclosed
- Corporate members permitted
- Corporate manager permitted
- Local manager required
- Registered office or agent required
- Annual meeting required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Civil law Legal basis
- 1 Minimum members
- - Minimum registered capital
- - Minimum paid up capital
- CRC Capital currency
- 100% Foreign-ownership allowed
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.
- Tax transparent entity
- 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.