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Legal Residence in Costa Rica

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Requirements for obtaining a legal residence in Costa Rica

ERP Lawyers & Associates provides immigration services for our clients, specifically to obtain Legal Residencies, depending on the category of the applicant.

There are general immigration requirements, which apply to all the different categories established in our legislation. These requirements are:

a) The residency applications may be submitted directly in Costa Rica, providing that the applicant’s tourist visa is up to date, or in the Costa Rican Consulate in the country of residence of the applicant.
b) Affiliation Form
c) Birth Certificate duly apostilled or legalized.
d) Criminal Record Certificate duly apostilled or legalized. This and the abovementioned certificates will be valid for six months, unless the document expressly indicates another expiration date.
e) Certification of Marriage duly apostilled or legalized. This requirement applies only in cases in which the applicant wishes to cover his or her spouse as a dependent. If there are under aged children, a birth certificate for each one of them will also be required.
f) Fingerprints
g) Six recent passport size photographs.
h) Consular Registry.
i) A certified copy of all the passport pages.
j) Proof of government payments (expenses for submitting the application).
k) Certified translation of all documents that are issued in a language different than Spanish.

If you want to learn more about obtaining a residence in Costa Rica , contact us today

Legal Corporations

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There are various types of corporations In Costa Rica but the two most common are the “Sociedad Anónima” (S.A.), which is very similar to a “corporation”, and the “Sociedad de Responsabilidad Limitada” (S.R.L.), which is comparable to a limited liability company, “LLC”. In order to incorporate and register them, a minimum of two partners must appear before a Notary Public, and then the articles of incorporation must be registered before the Mercantile Registry, a section of the National Registry. Once it is recorded, there are no restrictions regarding the number of shareholders of the company (for example, a single shareholder.).

All companies must have duly authorized corporate books. The corporate books consist of a Shareholders Registry Book, Shareholders Meetings Book, Sociedades Anónimas (S.A.) are also required to have a Board of Directors Meeting Book. Please be informed that these Books are needed in order to amend the articles of incorporation or to transfer the shares.

Costa Rican companies shall have a determined Management Structure composed of one or several officers, which will vary depending on the type of corporation, whether a “Sociedad Anónima” or a “Sociedad de Responsabilidad Limitada”, as indicated below.

If the company’s representatives do not have a permanent domicile in Costa Rica, a Resident Agent must be appointed. Said Agent shall have sufficient faculties to receive judicial and administrative notices on behalf of the company, and must be a duly incorporated lawyer in Costa Rica. Its appointment and revocation shall be agreed upon during a Shareholders Meeting.

The following aspects are useful in order to differentiate between a S.A. and a S.R.L.:

I. Sociedades Anónimas (S.A.)

A. Corporate Stock::

  • The corporate stock shall be composed of a determined amount of common stock shares, with voting rights. Preferred shares may be also issued; with limited or additional rights.
  • Shares in a S.A. shall be transferred by endorsement. Said transfer shall also be registered in the Shareholders Registry Book

B. Administration:

  • The Stockholders Meeting is the highest corporate authority.
  • The Board of Directors acts on behalf of the company and also performs the duties of a corporate Executive Committee as it would in U.S corporations.
  • Said Board must be comprised of at least three members, which are the President, Secretary and Treasurer; their faculties shall be established in the articles of incorporation
  • Also, a controller must be appointed to oversee the adequate management of the company

II. Sociedades de Responsabilidad Limitada (S.R.L.)

Corporate Stock::

  • The corporate stock shall be comprised of a determined amount of nominative shares, commonly known and legally denominated as “quotas”.•
  • Shares or Quotas in a S.R.L. shall not be transferred by endorsement. The transfer is performed by means of a Share Transfer Agreement, which is subject to the approval of the remaining shareholders. Such transfer shall also be registered in the Shareholders Registry Book. Please take note that the remaining shareholders have the right of first refusal over an eventual share transfer.

Administration::

  • The Shareholders Meeting is the highest corporate authority.
  • One or more managers or vice-managers manage an S.R.L. Contrary to a S.A., this type of company does not require a Board of Directors nor a Controller, since only one or more managers can direct the company’s activities.
  • Said representative(s) shall be empowered with the faculties granted through the articles of incorporation.

III. Responsibility:

In both types of companies, Corporation and the Limited Liability Company, the shareholders’ responsibility is limited to the proportion of their contributions in the corporate stock at the time of the incorporation, excluding from the foregoing their personal assets, which remain outside of the scope of action of creditors and obligations that the company acquires regarding the execution of their activities.

Tax on Legal Corporations

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Corporation taxes came into force on April 2012, which applies to all legal entities that are duly registered in the Costa Rican Public Registry (e.g. “S.A.”, “LTDA”, among others), as well for those corporations that are in the process of being registered or that will be registered in the future.

There is a difference in the amount to be paid per year, depending if they appear as active or inactive contributors before tax authorities:

  • Corporations which are contributors will pay 50% of the base salary, on an annual basis.
  • Corporations which are not contributors or are inactive will have to pay 25% of the base salary, on an annual basis.

All corporations must pay this tax on or before January 31st of each year during the existence of the company, and the tax can only be paid through the Bank of Costa Rica. This tax will not be deductible as an expense from the Income Tax.

Liability, fines and penalties

It is important to emphasize that the corporation Legal Representatives will be held responsible in case of default on the payment of said tax. Also, in case that the tax is not duly paid the Public Registry will not issue any Certificate of Incumbency nor will record any kind of document for the default contributor. In the same way, defaulting taxpayers will not be able to contract with the Public Administration.

Failure to pay this tax for three consecutive terms shall be grounds for the automatic liquidation of the corporation. The Public Registry will send the notice of dissolution to the official newspaper, La Gaceta and shall cancel the registration and will place a lien on its goods. The debts arising from this tax will form a legal preferred mortgage or pledge, in the case of real or personal property owned by the corporation.
El no pago del impuesto establecido en la ley por tres períodos consecutivos será causal de disolución de la sociedad, por lo tanto, el Registro Nacional procederá a la cancelación de la inscripción y anotación de bienes; constituyéndose una hipoteca o prenda legal preferente sobre los bienes de las sociedades mercantiles o sus representantes.

ERP COSTA RICA LAWYERS