BUSINESS START UP IN COSTA RICA
Wondering what you have to do to get a new business started in Costa Rica? What should you do first? What next?
Starting your business in Costa Rica may require to obtain governmental, commercial, or municipal licenses or permits. In order to assist entrepreneurs with the start-up process, our professionals provide the necessary experience in legal procedures and commercial registrations.
Our assistance includes acquisition of permits and approvals in different institutions, chambers of commerce, associations, insurance corporations, social security, etc.
All corporations executing business in Costa Rica require to have the corresponding permits and licenses in order to develop its economical activities. Usual registrations and permits are:
- MUNICIPAL LICENSE IN COSTA RICA
- COSTA RICAN SOCIAL SECURITY REGISTRATION
- NATIONAL INSURANCE INSTITUTE REGISTRATION
- MINISTRY OF PUBLIC HEALTH: CERTIFICATE OF OPERATIONS
- REGISTRATION OF A TRADEMARK OR A COMMERCIAL NAME.
- REGISTRATION IN THE TAX AUTHORITIES:
1. MUNICIPAL LICENSE IN COSTA RICA:
All lucrative activities in Costa Rica require a municipal license (or permit) from the canton in which the activity is developed. The license involves the payment of a tax during the time of operations (Municipal Code, Law N° 7794, Article 79).
In virtue of the municipal autonomy, the forms and requisites to obtain a license may vary among municipalities, pursuant to their legislation and administrative dispositions. In the Exhibit of this section, included is a list of the municipal license laws for the existing 81 municipalities.
With independence from the heterogeneousness of these forms for obtaining a municipal license, it is common for the municipalities to ask for the following requirements.
COMMON REQUIREMENTS FOR MUNICIPAL LICENSE:
- Presentation of a certification of the legal capacities and the corporate identification of the company or a copy of these forms certified by an attorney when the interested party is an artificial person.
- In the case of natural persons, copies of both sides of the identification card. When the applicant is a foreigner, the municipality usually requires a certification from the Immigration Department to demonstrate that the applicant has a permanent residence authorized in the country.
- Copy of the operation certificate granted from the Ministry of Health, in cases where it is applicable, pursuant to the Granting of Operation Certificates, Executive Decree N° 30465-S.
- Employees risk insurance policy and the receipt that it has been paid, in those cases where it is applicable.
- Use of land or certified use of land, pursuant to Article 28 of the Urban Planning and Municipal Code, granted by the same municipality.
- The applicant and owner of the property where the business is located must have paid all municipal taxes owed to date, usually the respective certifications are requested.
2. COSTA RICAN SOCIAL SECURITY OFFICE REGISTRATION (CCSS IN SPANISH).
Pursuant to Costa Rican legislation, the employer must contribute to the social security system of its employees. To this effect, prior to paying the social security contributions, it must register as an employer at the central or regional offices of the CCSS.
The employer registration and the insurance of the employees have to be executed within the following eight days after the employees have initiated employment.
The social charges covered are:
SOCIAL CHARGES COLLECTED BY THE CCSS THROUGH THE PAYROLL. |
CONTRIBUTIONS |
EMPLOYER (%) |
EMPLOYEE (%) |
| SYSTEMS ADMINISTERED BY THE CCSS |
|
|
| Insurance for Illness and Maternity Leave |
9.25 |
5.50 |
| Disability, Retirement and Life Insurance |
4.92 |
2.67 |
| TOTAL |
14.17% |
8.17% |
| OTHER INSTITUTIONS |
|
|
| Banco Popular y de Desarrollo Comunal 1/ |
0.50 |
1.00 |
| Asignaciones Familiares |
5.00 |
- |
| Instituto Mixto de Ayuda Social |
0.50 |
- |
| Instituto Nacional de Aprendizaje 2/ |
1.50 |
- |
| Capitalization Fund 3/ |
3.00 |
|
| Mandatory Complementary Pension 4/ |
1.50 |
|
| TOTALS |
26.17% |
9.17% |
3. NATIONAL INSURANCE INSTITUTE REGISTRATION ( INS IN SPANISH ).
To conform to the Costa Rican Labor Code, the employer must secure an occupational risk insurance policy for its employees. For this, the employer has to underwrite a policy from the National Institute of Insurance (INS). The policy has to be underwritten at the beginning of the operation and has to be in force during the operation.
To underwrite an occupational risk policy, the applicant has to go to the Central Office or a branch of the INS, a commercial Insurance agency or an authorized Insurance agent. At the moment the policy is underwritten, the company will be automatically registered as an employer at the INS.
Once the policy is underwritten, the employer has to remit to the INS on a monthly basis a status of the forms indicated: names of the workers, days and hours worked and the salaries paid. This form can be executed electronically through the web page: http://www.ins.co.cr the non-compliance of this obligation can generate a series of sanctions for the employer. For example: if some of the workers that are not reported suffer an accident, the employer has to cover all of the medical and economic expenses that the INS incurs; or the temporary suspension or the closing of the establishment.
4. MINISTRY OF PUBLIC HEALTH: CERTIFICATE OF OPERATIONS:
In accordance with the General Health Law, once the construction of the facilities has been completed, and prior to the initiation of operations, companies must request authorization, or an Operation Certificate, from the Ministry of Public Health. This is a requisite prior to obtaining the municipal business license.
The activities that are subject to said process, as well as the requirements for obtaining the permit and the duration of such a permit, are defined in Executive Decree N° 30465 and its amendments and in the Regulations on Sanitary Registry of Establishments Regulated by the Ministry of Public Health. In this decree, activities are classified in three categories in accordance their level of environmental and health risks: A (high risk), B (moderate risk) and C (low risk).
5. REGISTRATION OF A TRADEMARK OR A COMMERCIAL NAME.
Requirements:
- Prior to the presentation of the registration application to the Patent and Trademark Office, an innovation study has to be executed in order to determine if equal or similar distinctions exist that have been previously registered and, if they are in force in the same international class.
- Submit the pertinent form duly signed by the applicant or the legal representative and the signature authenticated by a notary.
- The payment of the registration stamps can be executed upon presenting the application or subsequently.
6. REGISTRATION IN THE TAX ADMINISTRATION:
Registration as a taxpayer in Costa Rica:
This registration process is required of every person or entity that performs one or more economic activities. The procedure is executed at the Tax Administration offices detailed in the final annex of this chapter.
To this effect, the taxpayer has to complete Form D-140 to register as a taxpayer. The general requirements, as well as the specifics for the corresponding activity, are presented next.
- General requirements.
- Submit Form D-140 “Declaration of Registration, Modification of Data and De-Registration, Sole Registry of Taxpayers” duly completed and without corrections or erasures.
- If the form submitted pertains to a natural person, then the individual has to present the original of the identification card and a photocopy; or a photocopy certified by a notary public.
- If the form submitted pertains to an artificial person, then the entity has to present the following:
- Corporate Identification, in original and photocopy; or a photocopy certified by a notary public.
- Certification of the artificial person, issued by the Public Registry or by a notary public, no older than 3 months from the date issued. The certification must attest to the term of the legal representation as well as the legal capacity – in conjunction or separately – and the power of attorney held - universally or without limitations as to amount, general or otherwise.
- Identification card of the legal representative, in original and photocopy; or a photocopy certified by a notary public.
- If the form presented is for a foreign person, the individual has to present his or her passport, permanent or temporary residence identification card, and diplomatic card for an international mission or other identification documents, in original and photocopy; or a photocopy certified by a notary public.
- If the procedure is requested or carried out by a third party, it has to be presented additionally with:
- Identification card of the applicant, in original and simple photocopy, or a photocopy certified by a notary public.
- Certification of the power of attorney held, or a note issued by the taxpayer indicating: the name of the person authorized and the person who authorizes, the identification card number of both and the procedure for which the authorization is issued. This document has to be authenticated by an attorney.
Ask our team for more information about the requirements and procedures to be followed for the service or services needed or visit us in San José, San Pedro, Barrio Dent, del Centro Cultural Costarricense Norteamericano, 200 metros al Norte y 50 al Este, Edificio Ofident.
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