Starting a business is different in every part of the world due to the particular challenges you may come across, in addition each country has a business culture that is important to understand and Costa Rica is no exception.

One of the most important things we must do before we can run a business in Costa Rica is to define what type of business we want, whether we will do it under a corporation or personally and then complete the registration in the National Registry.

Costa Rica is a country that has a large number of public institutions, each with a list of requirements to issue licenses for each specific business or activity. The requirements vary according to the type of business you are looking to open. In some cases, this bureaucracy can make the startup process slow and tedious, so it is important to be patient throughout the process.

The mandatory permits that all businesses must obtain before starting operations include: sanitary operating licenses, municipal licenses and registration with the Ministry of Finance as a taxpayer, either as a company or in a personal capacity.

The basic and general requirements to establish a business are:

Determine type of Business Entity:

The company must be established and it is mandatory to comply with the monthly and annual obligations of such company, the type of company will be according to the purposes and plan for the business.

 

Brand and Commercial Name: (Intellectual Property)

Protect the intellectual property rights of the company, register both the trademark and the trade name in the National Registry.

 

Registration with the Ministry of Finance:

Register the company with the Ministry of Finance according to the economic activity or activities to be carried out.This step goes hand in hand with the fact that an accountant is eventually required, so it is important to hire one before going ahead with this registration because there are monthly and annual obligations that must be met and statements must be issued to the Ministry.

 

Inscription in the INS (National Insurance Institute):

The National Insurance Institute (INS in Spanish) is the entity in charge of insurance. Before your company starts hiring employees you must register such company and acquire a risk policy. This policy covers occupational illnesses and accidents. Then the company must pay an amount for each employee that is hired, and paid it monthly, quarterly or annually. In addition, you must report payroll monthly.

 

The Risk Insurance requirements are:

1. Certification of legal status of the company.

2. Fill in and sign the registration application forms and the issuance form.

3. If there is no legal representative of the company available for the process, a power of attorney will be needed to authorize and appoint a proxy to proceed.

4. The person who is going to do the registration will need the details of the worker’s full name, identification, occupation, salary, payment method, working days, hours, rest time (lunch), place of work and start date.

5. This is not an essential requirement, but our Labor Code establishes that you can have a verbal contract in agricultural or livestock workers, this exception does not include industrial work carried out in the field.

6. After obtaining the policy, you will have an INS contract number and you will be able to obtain the username and password to continue making the other inclusions and exclusions online.

Registration in the Costa Rican Social Security Fund:

The Costa Rican Social Security Fund is a government institution in charge of social security. You must register and acquire social security for each employee, the report and payment of the insurance is monthly. After having registered the company as an employer, the username and password can be obtained to continue making changes online.

An important fact is that the Ministry of Labor establishes minimum wages each year according to the occupation and the functions to be performed by each employee.

Currently of this insurance, the employer pays 26.5% and the employee 10.5% for a total of 37%, this is calculated from the gross salary.

Local operating permits:

You must have the following licenses:

Municipal Patent

The interested party must process the patent with the corresponding Municipality.

It consists of requesting operating permission from the Municipality in the location of your business.

Health license from Ministry of Health

The interested party must process the patent with the corresponding Ministry of Health.

It consists of requesting permission from the Ministry of Health in the location of your business.

Our recommendation is that before leasing or buying property destined for the premises, research in the municipality everything you need for the use of land first, and then also verify that you have the appropriate construction licenses if needed.

Additional permissions:

According to the economic activity of the company, it should be registered in institutions such as SUGEF, MINAE among others, but each case is specific according to the purpose and activities of the company. In addition, each financial institution has different requirements to open a corporate bank account.

With this article we hope that you have a clearer idea of what it means to start a business in Costa Rica, what is needed to do so and how long can the process be. We would like to remind you as well, since there are several institutions and steps involved, that not all of them represent the same level of ease or agility, however any business with a lucrative purpose and with commercial venues must comply with them.

Do not hesitate to contact us in case you have any questions or suggestions, we have a dedicated team ready to help you in the process of starting a new business.

 

This article was written in collaboration with Aron Mekler, Legal Assistant.