When business owners are ready to formalize their operations in Costa Rica, one of the first questions they often ask is: Should I set up a Corporation (S.A.) or an LLC (SRL)?
The answer does not depend solely on the current size of the business. Before choosing a corporate structure, it is important to consider who will participate in the company, how ownership will be divided, who will make key decisions, who will manage the business, and how the company is expected to evolve over time.
In our previous article, “Opening an SRL in Costa Rica: 2026 Guide,” we explained why an SRL may be appropriate for companies with a limited number of members, family businesses, or structures seeking greater control over the admission of third parties.
A Corporation in Costa Rica (Sociedad Anónima or S.A.) follows a different model. It is not simply a “larger company” or a superior version of an SRL. It is a different legal structure that may be better suited to certain ownership, management, investment, and growth models.
How does a Corporation work in Costa Rica?
A Sociedad Anónima, commonly referred to as an S.A. or Corporation, is a commercial entity with its own legal personality. Its capital is represented by shares, which determine each shareholder’s participation in the company.
As a general rule, shareholders’ liability is limited to the payment of their contributions.
From a business perspective, one of the relevant characteristics of an S.A. is that it allows for a distinction between ownership and management. Shareholders own the shares, while the administration of the company’s affairs is entrusted to a Board of Directors.
In Costa Rica, the Board must have at least three members. They may or may not be shareholders and must include, at a minimum, a President, Secretary, and Treasurer.
The Shareholders’ Meeting is the company’s highest decision-making body for matters within its authority.
Regarding oversight, the current Costa Rican Commercial Code establishes that a corporate oversight system is optional. If the shareholders decide to implement one, it must be established in the Articles of Incorporation and its operation defined accordingly. Therefore, the appointment of a statutory examiner (fiscal) should not be treated as a mandatory requirement for every S.A.
In practical terms, this structure organizes three fundamental aspects of a business: who owns it, who makes corporate decisions, and who manages it.
What do you need to form an S.A. in Costa Rica in 2026?
A Corporation in Costa Rica must be incorporated through a public deed and registered with the Registry of Legal Entities (Registro de Personas Jurídicas).
Some of the main matters that must be defined at incorporation include:
- at least two founding shareholders, each of whom must subscribe to at least one share;
- the share capital and its division into shares;
- the number, par value, nature, and class of shares;
- the company’s corporate purpose and domicile;
- its management structure;
- the composition of its Board of Directors;
- legal representation and the corresponding powers;
- an email address for official notifications;
- any additional corporate rules that must be included in the Articles of Incorporation.
When subscribed shares are paid in cash, at least 25% of their value must be paid upon incorporation. If contributions are made through assets other than cash, their corresponding value must be fully paid at that time.
Beyond these legal requirements, several business decisions should also be considered: how shares will be distributed, what authority each corporate body will have, who will be authorized to represent the company, and what rules may be needed if the ownership structure changes in the future.
What reforms affected Costa Rican Corporations in 2025 and 2026?
Costa Rica introduced important changes to its corporate rules during 2025 and 2026. For this reason, incorporating an S.A. in 2026 based automatically on older templates may leave relevant matters outdated.
One of the main changes came with Law No. 10729, effective May 30, 2025. For newly incorporated S.A.s and SRLs, the National Registry now assigns the legal entity identification number used to identify the company, together with the designation corresponding to its corporate form.
This also makes it important to distinguish a company’s legal identification from the name it uses commercially. If a business operates in the market under a particular name, the appropriate intellectual property protection for that name should be considered separately.
Another important development is the use of email as an official notification channel for commercial entities. Newly incorporated companies must provide an email address as part of the incorporation process and keep it updated for administrative and judicial notifications.
In addition, Law No. 10840 changed the rules governing representation at corporate meetings in 2026. The reform establishes requirements for representation through attorneys-in-fact and provides a specific regime for SMEs registered with the Ministry of Economy, Industry and Commerce (MEIC) and qualifying small and medium-sized agricultural producers registered with the Ministry of Agriculture and Livestock (MAG).
In June 2026, Law No. 10962 also introduced new provisions intended to facilitate the registration of corporate email addresses.
These developments make it important to review the rules in force when incorporating or modifying a company, particularly when relying on Articles of Incorporation or procedures prepared under previous regulations.
How is an S.A. structured?
A Corporation may appear highly formal when viewed only from a legal perspective. For a business owner, however, its structure can be understood through three straightforward questions:
Who owns the company? Who makes the decisions? Who manages it?
How these questions are answered can have a significant impact on the company’s future operations.
Shareholders and shares in an S.A.: who owns the company?
The capital of a Corporation is divided into shares. Each shareholder participates in the company according to the shares they own and the rights attached to those shares under the law and the Articles of Incorporation.
The company must maintain an up-to-date Shareholders’ Registry, reflecting the transactions and changes that are legally required to be recorded.
The shareholding structure should therefore not be viewed merely as an incorporation requirement. It legally defines how ownership of the company is distributed.
This becomes particularly relevant when there are several founders, when ownership percentages differ, or when the shareholders anticipate that the ownership structure may change in the future.
Shareholders’ Meetings in an S.A.: who makes corporate decisions?
The Shareholders’ Meeting is the highest corporate authority for matters within its jurisdiction.
Costa Rican law requires at least one Ordinary Shareholders’ Meeting each year, within three months following the end of the fiscal year. Among other matters, this meeting addresses annual results, potential distributions of profits, and appointments when applicable.
Certain extraordinary decisions require specific corporate procedures.
For business owners, the key point is that not every company decision is made in the same manner. The Articles of Incorporation, ownership percentages, and applicable voting thresholds can become particularly important when several shareholders participate in the business.
Board of Directors of an S.A.: who manages the company?
The administration of the company’s affairs is entrusted to a Board of Directors.
This structure allows the owners of the business and the people responsible for its administration to be different individuals.
That distinction may be useful, for example, when some shareholders contribute capital but do not participate in day-to-day operations, when founders perform different roles, or when the business requires a more clearly defined governance structure.
Legal representation must also be structured appropriately. Naming directors is not enough: the company should clearly establish who has authority to represent and legally bind the entity and the scope of those powers.
When might forming an S.A. make sense?
There is no single category of businesses that must automatically operate as a Corporation.
However, it may make sense to consider an S.A. when the current or anticipated characteristics of the business call for a more developed ownership and management structure.
For example, an S.A. may be worth evaluating when:
- new shareholders or investors may join the company;
- the ownership structure may change over time;
- several participants have different roles within the business;
- there is an interest in clearly separating ownership from management;
- the company wants to organize decision-making through a defined corporate governance structure;
- future changes to the company’s capital structure are anticipated;
- the founders want to establish rules for different stages of the company’s development.
The determining factor is not whether the company is currently small, medium-sized, or large.
A newly established venture may have valid reasons to consider an S.A. if its ownership model or expected evolution justifies it. Likewise, an established business may determine that another corporate structure is more appropriate for its circumstances.
How can new investors join an S.A.?
Because the capital of an S.A. is divided into shares, its structure can accommodate certain models for bringing new participants or investors into the company.
The share structure makes it possible to identify each shareholder’s participation and legally organize changes in ownership.
However, incorporating an S.A. does not automatically mean that a company is ready to receive investment, nor does this structure guarantee that raising capital will be easier.
Before bringing in a new investor, the company should consider matters such as:
- what ownership interest the investor will receive;
- what economic and voting rights will apply;
- which decisions will require specific voting thresholds;
- how transfers of shares will be regulated;
- what will happen if a shareholder wants to sell or exit the business;
- how potential disagreements will be addressed;
- what information each shareholder will be entitled to receive;
- how future capital contributions or investment rounds could be structured.
Depending on the transaction, it may also be necessary to conduct due diligence, determine the company’s valuation, negotiate shareholders’ agreements or investment documents, and evaluate the corresponding legal and tax implications.
An S.A. should therefore be understood as the legal vehicle within which an investment may be structured, rather than a substitute for the planning required to bring new participants into a business.
Anticipating these issues can be particularly important. When a company starts with only a few shareholders, certain situations may seem remote. The entry of an investor, the departure of a founder, or a disagreement over a significant decision can quickly change that dynamic.
What does corporate governance involve in an S.A.?
A corporate structure provides tools for allocating responsibilities and organizing decisions, but it also creates ongoing responsibilities.
A Corporation should maintain consistency between its Articles of Incorporation, the resolutions adopted by its shareholders, the decisions of its Board of Directors, and the way the business actually operates.
Depending on the circumstances, this requires attention to matters such as:
- corporate books and records;
- minutes of Shareholders’ Meetings;
- minutes of Board meetings;
- an up-to-date Shareholders’ Registry;
- current appointments of directors and officers;
- powers of attorney and authority to represent the company;
- proper documentation of significant resolutions;
- amendments that must be registered;
- updates to information recorded with the relevant authorities.
A more developed corporate structure therefore requires organized corporate administration.
This should not be viewed exclusively as a legal formality. When several shareholders, directors, or investors are involved, properly documenting decisions helps establish who had authority to act, what was approved, and under what conditions.
Corporate governance therefore serves a preventive function by helping reduce uncertainty within the business.
What obligations does an S.A. have after incorporation?
Registration of a Corporation is only the beginning of its legal obligations. After incorporation, an S.A. must comply with ongoing corporate requirements and, depending on its activities, tax, employment, and regulatory obligations.
Does an S.A. have to pay the Legal Entities Tax?
Registered commercial companies are generally subject to Costa Rica’s Legal Entities Tax (Impuesto a las Personas Jurídicas), including inactive companies, unless a statutory exemption applies.
For 2026, the Ministry of Finance established different amounts depending on the company’s status and gross income. The base salary used for the calculation was CRC 462,200, and the 2026 payment deadline was February 2, 2026.
Amounts and deadlines should be verified each year because the applicable parameters may change.
Does an S.A. have to file the Transparency and Ultimate Beneficial Ownership Registry?
Corporations must also comply with Costa Rica’s Transparency and Ultimate Beneficial Ownership Registry (RTBF) in accordance with the applicable regulations.
The ordinary 2026 filing took place during April. Certain changes to company information may also trigger additional updating requirements.
This obligation deserves particular attention when changes occur in the shareholding structure or in the information concerning ultimate beneficial owners.
Does an S.A. need to keep its official email address updated?
Yes. The registered email address has a legal function and should not be treated simply as an administrative contact detail.
Costa Rican law recognizes it as a valid channel for receiving administrative and judicial notifications. In addition to registering it correctly, companies should therefore keep it updated and establish who will be responsible for monitoring it.
Further changes concerning the registration procedure for corporate email addresses were introduced during 2026. Companies incorporated before the new regime should verify which requirements and deadlines apply to their particular situation.
What corporate books and records must an S.A. maintain?
A Corporation must maintain the corporate books and records required under Costa Rican law.
The Shareholders’ Registry is particularly important because it establishes who is legally recorded as holding the company’s shares.
Changes in share ownership must be properly reflected in the corresponding records. Costa Rican legislation also provides penalties for failure to maintain an updated Shareholders’ Registry.
What obligations apply if the S.A. conducts business or hires employees?
An S.A. conducting economic activities must comply with the tax obligations applicable to those activities, including registration and information updates before the Tax Administration, as well as the required tax returns and payments.
If the company hires employees, it must also comply with employer obligations before the Costa Rican Social Security Administration (CCSS), employment laws, and occupational risk requirements.
Depending on the nature and location of the business, municipal licenses, permits, or other regulatory authorizations may also be required.
Not every Corporation therefore has exactly the same operational compliance obligations. An inactive company, an operating business, and a company with employees may each have different requirements.
S.A. or SRL: which structure may be better suited to your business?
Choosing between an S.A. and an SRL should not be reduced to determining which structure has more requirements or which one appears simpler.
A better starting point is to ask questions about how the company operates today and how it may evolve:
- How will ownership be divided?
- Who will manage the business?
- Do you expect new participants to join?
- How could ownership interests change in the future?
- What level of corporate formality does the business require?
- How should decision-making be structured?
- Is a clear separation between ownership and management important?
As discussed in our guide to Costa Rican SRLs, that structure may be suitable for more closely held businesses, companies with a limited number of members, and situations where controlling the admission of third parties is particularly important.
An S.A. follows a different logic, where share ownership, governance, participation by different stakeholders, and the evolution of the corporate structure may become more relevant.
This does not make one structure inherently better than the other.
There is no universally superior corporate structure. The appropriate structure depends on the characteristics and objectives of each business.
Do you need legal advice when forming an S.A. in Costa Rica?
Forming a Corporation in Costa Rica involves specific legal and notarial formalities. Legal advice before incorporation serves an additional purpose: determining how the company should be structured before its incorporation documents are executed and registered.
That distinction matters.
Forming a company is not simply a matter of obtaining a legal entity identification number. Decisions made at the beginning may later determine how ownership is distributed, who manages the business, who can legally represent the company, and how new participants may be incorporated.
A legal review before incorporation can help prevent:
- disputes over the authority of shareholders or directors;
- unnecessarily complex corporate structures;
- difficulties when bringing in investors or new participants;
- inconsistencies between the legal structure and the way the business actually operates;
- representation powers that do not reflect the company’s needs;
- problems caused by corporate rules that did not anticipate the future evolution of the business.
At ERP Lawyers & Associates, we advise business owners, entrepreneurs, and investors on the incorporation and structuring of companies in Costa Rica. Our role goes beyond completing the registration process: we assess the business model, the composition of its participants, and its current and future needs to help determine an appropriate legal structure.
A Corporation should not be chosen simply out of habit or because a business intends to become “large.” The decision should reflect how ownership will be divided, how the company will be managed, who may participate, and how the business is expected to evolve.
If you are considering forming an S.A. or are still deciding which corporate structure to use for your business in Costa Rica, a legal review can help you approach that decision from a business-oriented and preventive perspective.
📩 Contact us today for legal advice on incorporating and structuring your business in Costa Rica.
