More and more people seem to be deciding to give Costa Rica a try as their new home these days. And many are still of working age (not retired) and in search of their next big endeavor. If you have read some of our Moving to Costa Rica articles, you know that life in a new country comes with both its challenges and rewards. The same holds true for starting a business. In this post, we’ll give some insight into starting a business in Costa Rica.
Why Start a Business in Costa Rica?
There are many reasons why an expat would want to start a business in Costa Rica, but the biggest one is obvious — income! If you are not already receiving some type of steady income like retirement or from an online job, you need to figure out how to support yourself.
Visa Requirements for Working as a Foreigner
Simply working as an employee in Costa Rica is not an easy option. This is because as a foreigner, you are not allowed to work without a special visa unless you have citizenship or a particular residency status called permanent residency. You can apply for permanent residency by having a first-degree kinship to a Costa Rican (e.g., through the birth of a child). But most people get it after having temporary residency first for three years.
Otherwise, most people who move to Costa Rica would need to get a visa to work. These can be hard to get because the government does not want to take jobs away from locals. Visas sometimes can be obtained for specialized fields like scientists, professors, and things like that. But for an employer to get a work visa for a foreigner, they would have to show that the job is something that no local is able to do. Therefore, it can’t be for a regular job like construction, mechanic, restaurant server, etc.
This doesn’t mean that you don’t find foreigners without permanent residency or citizenship working in Costa Rica, though. Working without the proper documents is somewhat common here, especially in more rural areas. But doing so is risky and could get you deported.
Wages in Costa Rica
Another reason to start your own business is that wages are typically low here. Therefore, even if you do obtain permanent residency (which can take years) and are able to work for someone else, most jobs don’t pay what you would expect. At least in relation to your home country’s standards. Many workers in Costa Rica, even skilled ones like plumbers or dental assistants, make only around $2.00-$5.00 USD per hour.
For more information on specific professions, you can check out Costa Rica’s 2020 minimum wage guidelines here.
Opening a Business in Costa Rica
Owning a business is something that is permitted as a foreigner, even without any type of residency status.
In general, you can own and operate your own business with only a tourist visa. When doing so, you must hire locals for the actual labor, but you can do the management and related tasks. Later, if you do obtain permanent residency or citizenship, you can be much more involved in other parts of the business as well.
Background – Our Experience
We set up a Costa Rican corporation in 2016 as a part our existing travel agency and hired a lawyer in Costa Rica to do the paperwork. When doing so, we remember having so many questions that it was almost overwhelming. Jenn is a lawyer in the United States so that helped, but we still had a lot of unknowns.
As our lawyer guided us through the options, we found that much of the process for opening a business in Costa Rica is the same as it was in our home country. We had recently set up a corporation in the United States too, so many of the requirements and steps overlapped.
Steps for Starting a Business in Costa Rica
Some businesses are more complicated than others so this won’t be a complete list for everyone. But many of the core steps for starting a business in Costa Rica are the same. So this should give you an idea of what to expect.
Disclaimer: We are not experts in business law in Costa Rica and are not intending to give legal or other professional advice. If you are opening a business, we strongly recommend that you seek the advice of a legal professional.
Pick a Business Structure
Much like other countries, Costa Rica has different business structures that vary in terms of complexity, number of people involved, and liability protection. There are a handful of different types, but here are the two most common.
Sociedad Anonima (Anonymous Society) or S.A.
This business form is similar to a corporation in the United States. To form an S.A., you need several people, including at least two shareholders, three board members, a controller, and a resident agent (attorney). The duties can overlap in some cases so, for example, a shareholder also can be a board member.
Sociedad de Responsabilidad Limitada (Society of Limited Responsibility) or S.R.L.
This is like a limited liability company (L.L.C.) in the United States. Forming an S.R.L. is much simpler since you only need two people to be shareholders, no board of directors or controller, and usually no resident agent.
Decide on a Legal Name
In Costa Rica, a legal name can be the same name you call your business or it can be something completely different. For example, if you open a restaurant, the legal name may not have anything to do with the name on the sign. Some names are even a series of numbers or special date written out. The legal name you choose cannot be too similar to an existing business in the government database.
Get Business Licenses and Permits
Depending on the type of business you are starting, you may be required to apply for a variety of licenses and permits. For a business with a physical location, you may need an occupancy permit from the health department and/or business license from the local municipality. An experienced business attorney should be able to walk you through what is needed for your specific business.
Shareholder Declaration and Digital Signature
Each year, it is mandatory to make a declaration of your business’ shareholders and/or beneficial owners to the Central Bank. Along with this requirement, you will need something called a digital signature (firma digital). The digital signature is a card that is used to electronically sign documents and can be applied for at an approved bank.
Other Important Factors in Starting a Business
Taxes
Another big step with starting a business in Costa Rica is getting set up with the Ministerio de Hacienda, which is the country’s tax authority. Your lawyer will register you with the Hacienda using your business’ legal name and corporate ID number (called a cedula juridica in Spanish).
Corporate Taxes
Once you are in the government system, you will be subject to corporate taxes and an annual corporation fee. The corporation fee is between $175-400 for an active corporation, depending on gross income.
The corporate tax rate in Costa Rica is 30%. But there are special provisions for small businesses with less than around $191,000/year in gross income. These provisions can lower the tax rate to 10-20%. Here’s a link to a website with more specific information on those other provisions.
VAT (Value Added Tax)
In addition to corporate taxes, your business will most likely need to collect the VAT (value added tax), called IVA (Impuesto sobre el Valor Agregado) in Spanish. This was implemented in Costa Rica in July 2019 and was kind of a big deal. It’s a 13% tax on the total of goods and services. Some exceptions apply, but the majority of businesses are subject to this tax. Here’s a link to the Hacienda’s website with more information.
As a business, you need to collect the VAT and send monthly payments to the Hacienda. A monthly tax filing is also required. Keep in mind that unless you can figure out how to do the tax filings yourself, you will need to hire an accountant. At the time of this writing, our accountant was charging about $65 USD per month to take care of this. That fee also included the end of the year tax filing.
Other Taxes
Along with corporate taxes, you’ll need to pay an annual tax that goes towards education and culture called the Timbre de Educación y Cultura. It’s a small amount (around $20 max) but important to remember. Also be sure to check with your attorney to see if there are any municipal taxes that apply to your business.
Electronic Invoicing
Related to the monthly tax filings of the IVA (above), you will need to be able to issue and receive electronic invoices/receipts. This can be a confusing and tedious process, so it is best to consult with an accountant. They will set you up with an online invoicing system and teach you how to use it. There are several options that private companies offer and a free government system.
Basically, the way it works is that all expenses, sales, taxes, and VAT amounts need to be recorded in your electronic invoicing system. To do that, generally you need to issue an electronic invoice for anything you sell. You also need to receive one in the system for anything you buy (major purchases). The invoicing system then sends the information to the government’s database. Those corresponding values will be used to file your monthly, quarterly, and annual taxes.
At the end of the tax year, other companies and individuals that did a lot of business with you may ask to compare their electronic invoicing reports against yours. This is to make sure you are both reporting the same amounts to the Hacienda so as to avoid any tax issues. Adjustments can be made, but it is best to keep up with your electronic invoicing throughout the year to avoid headaches later.
Employees
Like most employers around the world, in Costa Rica you are subject to government regulations when it comes to your workers. The biggest financial obligation is that you must contribute towards each employee’s government healthcare costs (CCSS). You are also responsible for deducting the employee’s contribution from their pay and passing it onto the government. Each employee’s taxes also must be deducted from their pay and passed onto the Hacienda.
There are many other requirements for full time employees such as paid holidays, vacation pay, annual bonuses, and other topics that an experienced attorney can walk you through.
Banking
After officially inscribing your business and receiving your corporate ID (cedula juridica), you’ll want to open a business bank account. This is possible as a foreigner, even without any type of residency, but has its limitations.
When we opened our business bank account, for example, we did not have our permanent residency yet. It was in process. Because we had only foreign passport numbers to open the accounts, we were not allowed to bank online. We think this was to prevent fraud.
What it meant for us, though, was that all bank transfers needed to be done in person at the bank. We often had a lot of transactions to make, sometimes multiple times per week. This meant a lot of time at the bank, waiting in line and then waiting for each transaction to be processed by the teller. Once we received our residency and updated our accounts with our corresponding DIMEX (cedula) numbers, online banking made things a lot easier.
Different banks have different requirements for opening an account. But all require an accountant to provide a cash-flow projection for your company. Opening our bank account at Banco de Costa Rica in 2016 was relatively straightforward once we had our accountant make that document.
Timeline to Incorporate a Business in Costa Rica
While many of the steps involved in starting a business in Costa Rica can happen quickly, putting it all together and getting everything checked off the list can take around 2-3 months. There will no doubt be some holiday or glitch in the system that will delay you, so count on a few months or even more if you need special licenses or permits. Administrative tasks in Costa Rica can take a lot longer than expected, so be sure to exercise patience. Check out our post about Applying for Residency and you will see that we waited a long time for that too!
Takeaways
When we opened our Costa Rican corporation, we were completely overwhelmed by the process. Once we met with our attorney and knew the steps, though, we started laying out our plan and began feeling a lot more confident. We’d highly recommend hiring a lawyer that is easy to communicate with and fully bilingual so that you understand everything going on. Our attorney even translated the documents to English for us before we signed, since our Spanish isn’t perfect.
Ultimately, opening a business in Costa Rica was an adventure for us. We used it successfully for several years until our overall business structure changed and we shifted things back to our original corporation in the United States.
In the process of opening and running the Costa Rica part, however, we learned a lot about the intricacies of doing business in Costa Rica. It wasn’t all good or all bad but somewhere in between. Just like anywhere in the world, there are things that come easy and things that come hard.
One of the bigger challenges for us was the new VAT/IVA. We found it to be very costly in terms of the actual percentage that we had to pay as well as the associated accounting costs and manpower required to comply with it. Since the VAT is new, everyone is still getting used to it, even now, so maybe things will become more streamlined in the near future.
We hope this post gets you started on opening your business in Costa Rica and we wish you much success!
Have a question about starting a business in Costa Rica? Leave a comment below.
Looking for more information on moving to and living in Costa Rica? Check out these resources:
Frequently Asked Questions About Moving to Costa Rica – If you are considering a move to Costa Rica, check out this post with some of the most frequently asked questions.
Moving to Costa Rica Checklist – Getting more serious about a move abroad? Read our checklist to see how to prepare for the big jump. This list starts the planning process months in advance.
Video Chat Service – Have a question about moving to, living in, or even starting a business in Costa Rica? Chat with us for an hour to get the ball rolling.
Buying a Car in Costa Rica – One of our most popular posts about living in Costa Rica. Buying a car in a foreign country can be an adventure, so check out our experience here.
I’m a college professor and a chiropractor/nutritionist. Do you know if I would be allowed to work in Costa Rica? I would ideally like to have private practice and teach in a University.
Thanks.
Hi Emmett, You may be able to get a teaching job, but we don’t think you’d be able to practice as a chiropractor or nutritionist as there are lots of locals who do that for work. Would be worth it to talk to a lawyer in Costa Rica, though.
Thanks for the info. Working for me isn’t necessary, just something I like to do. I appreciate the help very much.
Dear Jenn and Matt, we have been in Costa Rica since 26th of november and we both practice our own method in natural energetic healing. It is not something people know. Can we open up a practice here in Costa Rica? Even if we do not hire Costa Ricans? They would not know how to give treatments obviously… so there is no point for us to hire them. We are in the process of applying for residency, so that is pending.
Am looking forward to your answer.
Regards, Mandy van den Dolder
Hi Mandy, We’re not sure. Officially, a lawyer would probably tell you that you would need to hire Costa Ricans for any administrative work and anything where you could train people. People do holistic medicine without hiring locals and without residency but it may not be legal. We’d talk to a lawyer.
Hey Jenn and Matt we are looking for a good lawyer and are having a difficult time finding a trustworthy one. Do you mind if I ask who you use? You guys seem like you found a good person. Thank you Hunter
Hi Hunter, sorry but the lawyer we used is no longer in business. There are lots of recommendations in the expat Facebook groups, maybe try searching there.
Hi,
If we apply for a temporary visa are we allowed to rent a part of our property or give workshops?
As a foreigner you can buy a house and rent it as a vacation home but what if you have a temporary residency
Any suggestions are helpfull
Hi Ferdinand, Temporary visas aren’t common here. You could apply for temporary residency, but usually people do this with the intention of staying long term.
Anyone can rent a property. I’m not sure about workshops. It would probably depend on the type of workshop you would be offering. We would recommend talking to a lawyer in Costa Rica.
any info on business insurance, liability, work comp, bonding employees who handle cash
Hi David, It would be best to talk to a lawyer about all these types of more specific questions.
Hi, I’m looking to move with my family from the U.K. under the new remote workers law passed in December. Also looking to work as a business consultant (remotely) to U.K. businesses. It feels like it might be very complicated so I’m a little uncertain. Any advice please?
Hi Kerry, That law did not pass yet. We have heard that it is receiving a lot of positive feedback among lawmakers but it has yet to be approved. Hopefully it will sometime this quarter.
The general consensus is that if you work for companies in the UK and payments to you are deposited into a UK bank account, you can work legally in Costa Rica.
Thank you for taking the time and trouble to respond. Your advice is really appreciated. Maybe see you there soon!!
Hi! I have an online business (Etsy). I paint mandalas & a few other items. Will this fall within the same perimeters?
Hi Brandi, As long as you keep the financial side out of Costa Rica (deposit the money into your bank account where you are from), you should be fine. You’re working for yourself online and selling to people outside Costa Rica.
Thanks so much! I believe I’ll be able to maintain my current US bank account. Now, to figure out shipping from CR.
Really appreciate your reply & enjoyed all your great info in your newsletters & site.
Take care!
What are the options for opening a dog grooming business there? I own and operate one in Canada, but within 5 years, want to do something different. We are considering moving to Costa Rica or Belize.
Hi Debbie, The law is that you could own the grooming business but would need to hire locals to do the actual work. Foreigners without residency can own a business but not work at it. Unless you were to get permanent residency. This takes some time, though. You have to have temporary residency first (unless you fall within a narrow category of people who have a direct relationship to a Costa Rican, like by having a baby here). Hope that helps!
Hi Debbie. I am looking to start a flooring business in San Jose. I am from the US. I have an existing flooring company there. I like to see running one in SJ as well
Hello Jenn/Matt,
I am a Certified Personal Trainer/Nutrition Coach living in Miami, FL. My girlfriend and I are interested in moving in the short future to Costa Rica and start a holistic wellness studio (meditation, fitness and nutrition) business. Do you have any information on how to obtain starting capital in Costa Rica to set up the business and takeoff? Thanks in advance for your help.
Hi Cesar, As a foreigner and non-resident, you won’t be able to get a loan from a bank/lender. We have heard of some expats taking on partners to invest in their company. We’ve seen that with things like car dealerships and tourism businesses. So maybe that is something you could look into.
Did this work out for you all?
Hi Jenn and Matt, thank you for a very detailed article. If someone would like to start an agriculture business but you don’t wanna leave in Costa Rica, which area will be best? Thank you
Hi Espérance, I’m sorry, but I don’t exactly understand your question about which area would be best for starting an agricultural business. If you want to rephrase it, we will try to help. Thanks.
hi, I’m wondering if i’d be able to do Lash Extension service from home there?? id be renting a home first and then purchasing once I figure out where id like to reside.. I tried to look up if there was such a thing and I found just 1 in all of Costa rica..
If not, I could train locals to do the job, but is there any safety for me as the trainer, they don’t leave and go work for themselves?? thanks in advance
Hi Colleen, If you employed locals, yes, this would be fine. We haven’t heard of many places doing lash extension in Costa Rica, that’s true. As for preventing employees from leaving and starting their own company, that would be something you would work out with the employee, like through a non-compete agreements.
I want to spend my life after retirement (I am a US citizen), in Costa Rica, my monthly retirement income will be around $2300 per month, Can I start a business there like agriculture, growing vegetables and exporting them to the USA or restaurant business?
Hi Steve, Yes, as long as you employ locals for the farm work. We aren’t sure how easy it would be to export the products, though. We’d recommend taking to a good lawyer about how to set up the business so that everything would be done correctly.
Hey Jenn and Matt. Wondering if I would be able to open a food truck in Costa rica? Do you see them often? thanks for any info on this.
Hi Eric, Yes, we have seen some food trucks around. Not too many, but some. We aren’t sure of the particulars but think you would just have to get the standard health code approvals that restaurants need.
Hey Jenn & Matt! Thanks so much for the helpful posts! I’m a paramedic in the US with a Bachelor’s in Emergency Medical Care. I don’t think I would be able to work as a paramedic there, however, I did not know of the University or hospital requirements to teach locals to be paramedics. Can you point me in the right direction?
Hi Joel, We honestly don’t have any idea about the requirements for teaching paramedics. The Red Cross has ambulances here and there are many private companies too. Maybe you could reach out to one of them?
I want to have a workout studio. Would I have to hire locals or I would be able to teach the classes?
Hi Lina, there is a little gray area with things like that so you may be able to teach classes (since you are the only one who can do exactly what you do) but you would probably need to hire locals for the front desk, cleaning the studio, etc. You’ll want to confirm with a lawyer before going forward but we do think it could be possible.
Hi Matt&Jen, great article. I just received my permanent residency. I’m considering to open an online store (maybe via Instagram) as soon as the pandemia is over. This is more of a side hustle/hobby. I’m thinking of buying home goods, clothes, random knickknacks from the US when I travel, and resell here. I don’t expect much profit nor a regular schedule to go back and forth to the US.. but I want to do it right – I get overwhelmed with taxes and just how to start though. All the fees to incorporate & pay an accountant will for sure eat up most if not all profit, there must be some exemptions? I appreciate any insights/recommendations..thanks!
Hi Amria, it would be hard to make that a formal business without paying taxes on the items you are bringing in. We’re not sure of any exemptions for you but people do sell items personally online (Facebook, Craigslist, etc) for a little extra money on the side. This would be small scale and you would not likely have to set up a corporation. However, we have heard of people bringing loads of products in their suitcases (like electronics to sell or health & beauty items to stock a salon for example) and getting stopped by the Costa Rican customs officials. A few items seem to be fine but you would need to be cautious with how much. An alternative would be to get your items from some wholesale website at low prices and pay the import taxes when they are shipped to you in Costa Rica. Then resell them at a markup through the business you set up here. This model of course would incure all of the taxes, accounting, government filings, etc. though. Hope this gives you a bit of help.
Much appreciated, Jenn & Matt!
Hello and thank you for this incredible article and information. Ok so here’s a tricky one….so we own a business here in US, what if we have someone there who we know open up a new branch in costa and they help run it all and we hire locals of course, but the license holder to do the trade work is Us ..can this be done?
Hi Danielle, If it is a business that requires a license in Costa Rica, then you would probably need to meet licensing requirements here, whatever those are. Other than that, your plan sounds fine.
Hi!!
Thanks for this amazing blog!!
Can a self employed fitness instructor work both online (clients outside of CR and payments going to a Canadian bank) and also have own a studio there where I instruct classes?
I have specific training in weight lifting and strength training for senior citizens. I hope with the large population of aging expats I could open a gym and move my family to Costa Rica.
I would hire locals for cleaning and property maintenance.
Hi Tara, You could definitely work online with payments going to a Canadian bank but I’m not sure about teaching at a studio. The studio part would also mean you would have to start a company in Costa Rica and pay taxes here so you may want to keep your online business separate from the studio. Probably best to contact a lawyer in Costa Rica about how to structure things. Best of luck with your plans!
Hi great article, thank you for sharing.
We’d just like to buy a house/art studio, do our art and open our home for viewing–part time gallery party space. We would be public facing…like on a main road–not so discrete.
We are the producers of our own art, is that unique enough to say that we don’t need an employee? Can we do that without having a work visa or citizenship?
Part 2: would be helping Costa Ricans produce unique art for the market and selling their work. If we become a gallery at that point, is that different?
Thanks very much for you consideration. Barry
Hi Barry, I think that would be unique enough for you to say that no one else would be qualified to do the work, since art is intrinsically unique to the artist. I’d ask a lawyer to be sure before you get up and running, though, just to make sure you don’t need to do any paperwork to make it legit. If you sell the art at a gallery, you would probably need to hire a local at that point to help with the sales component.
There is a huge need for art in Costa Rica and helping locals get their stuff out there, so this is great! If you haven’t already, be sure to check out Tico Pod in Jaco. Great little art store with lots of stuff from Costa Ricans on display.
Hello Jenn and Matt! I am soooooo happy I found your so helpful website!
I am American and Canadian dual citizen and, as my age is getting closer to retirement, I started to look around what and how do I want to retire! Costa Rica took my attention the most! First cause I am so addicted to water and beach! I live in Florida now. And second cause this type of climate is very suitable with my health condition!
My thought was to retire and enjoy rest of my life at the beach, but now, reading all your information, i am thinking of maybe even move way earlier then my retirement age (I am 51 now) and support my living with running some business down there!
I am very addicted to water and boating! And my main profession is Auto Mechanic. The only an idea I have in my head is to do something around water sport, maybe something like See Doo rental or similar….. What would you think/advise? Is this type of business will be useful in Costa Rica? Basically I am looking to support my living on average level and i do have some small investments in Florida.
My plan is to visit CR this spring/summer for a week to look around, meet people, look for opportunity.
Any advise or suggestion will help a lot!
Can we meet in person when I am there?
Huge thanks for your hard working to help people with first step orientation!
Serge.
Hi Serge, Glad our website has been helpful to you! A jet ski company could work. Just keep in mind that this is already available in some areas so you will want to research where there’s a need for it. It might not be the best in some smaller communities too – some people don’t like the idea of it in their calm ocean so you may get some resistance from certain locals. But it could definitely work in bigger beach towns. Best of luck with your plans!
Thank you very much for your reply! I will discover areas which might suit my plans! Would it be ok if I plan my trip through your company, rent a car, meet you in person and maybe you could orient me where to go and what places to check? I’m planning on end of may and stay/ travel for a week. Thank you so much!
Hi Serge, We don’t usually provide that kind of help but maybe you will be interested in our video chat service? Through this, we would talk one on one and could help you figure out some places that may be good options for your business and help you set up an itinerary for your trip in May. Of course we could answer any other questions you have as well. Here’s the link to our page with more information: https://www.twoweeksincostarica.com/video-chat-service/
Hi Jenn and Matt, a friend and I are hoping to start a business in CR in the near future. Could you please share the contact info for the firm you used? Thanks!
Hi Ana, Sure, we will send you an email now.
Hi Jenn and Matt,
We are wanting to run a tour guide company in Costa Rica. We want to use the remote areas and we would hire locals. Would this be allowed? I can’t find out if there are special requirements like in the US
Hi Sandra, If you planning to own the company and hire locals as the guides, then yes, it’s legal from a visa/immigration perspective. Guides usually have certification from the Tourism Board (ICT) so you will need to look into that. There will be other legal issues you will want to check out beforehand too, like insurance. We would recommend talking to a local lawyer.
Hi, great article, this was really helpful.
I have a question, if I want to open a coaching business (all online) would that work in Costa Rica. Its only me and my services online, how would this work ?
Hi Isabell, Most people agree that if you’re working online for clients outside Costa Rica and the money is being deposited into a bank outside Costa Rica, then you are all set. You don’t have to worry about working illegally or paying income taxes in Costa Rica. We’re not experts on Cost Rica’s laws but that seems to be the general consensus. Lots of people do remote work from here.
Does Costa Rica offer any financial incentives for expats to open businesses? I’m asking based on the fact that the US offers many incentives (tax breaks, financing, etc) for foreigners to open businesses in America. I know CR is not the US… I’m just wondering if they do something similar.
Hi Kim, No, there aren’t any special tax incentives for foreigners who open a business. There are some incentives for small businesses or ecotourism businesses, though, that apply to everyone. A lawyer would be able to help you figure out if your business would fit into any of the categories.
Hi Jenn and Matt, I have an online business (coaching) and my clients are in Europe. I want to register my company in Costa Rica as a S.R.L. What does that mean for paying tax when I deposit my income on my German Paypal and bank account? What else do I need to keep in mind when registering my business here? Thank you!
Hi Judith, We would recommend talking to a lawyer or accountant in Costa Rica about setting up your company here. They may recommend keeping it in Germany because taxes here are high due to the new VAT. I think all your business income would be taxable in Costa Rica since you would have a CR company. But a professional would be able to give you the best advice.
Jenn and Matt, this post was fantastic! I am looking at purchasing an existing business in CR that comes with the established corporation. As an American I understand that I would have to hire locals to run it (not a problem at all). Is buying an established business “easier” than starting a new corporation from scratch?Thanks
Hi Terry, Glad our post was helpful!
Yes, we would think that buying an existing business would be much easier since it should have the legal framework in place.
Hi Jenn and Matt,
We are developing a specialty Wellness Retreat brand (the Mustang Strong brand). The retreat centers will feature working with Mustang horses from the U.S.. We’ve already established that we will be able to bring the horses to Costa Rica. If we employ local labor, is it reasonable to think that we could get the operation up and running 6-8 months after we purchase the property and make necessary changes?
Thank You!
Darcelle
Hi Darcelle, That seems reasonable but we would get a lawyer involved now so that you’re not delayed.
This is so interesting! My sister is married to a perform Costa Rica . We talked about opening a real estate office, but not having any idea where to start I google for information about opening a business in Costa Rica. I was wondering what were the requirements.
Do I have to open a business when I want to rent my Appartment on Airbnb? Or do I only have to register for the 13% tax?
Hi Melanie, You should check with a lawyer and/or accountant in Costa Rica, but we are fairly sure you just need to register with the Hacienda to pay the 13% VAT. You shouldn’t need to form a corporation.
Hi,
We are thinking of moving to Costa Rica and starting a business as well. We are currently working in the Cayman Islands under work permits but wish to move. We will not be residents when we arrive. Once we terminate our permits in the Cayman Islands, we will need to close our bank accounts in this country. My partner is from NZ and I am from Canada. Ideally, we would like to transfer our funds to CR rather than our home countries. I know that with a personal account opened only with our passports you can only put $1,000 US per month. Was there a similar restriction on your business bank account before becoming a resident? Please elaborate on the amounts.
Thank you so so much!
Hi Karine, If you have a corporation, it doesn’t matter if you’re a resident in terms of limits on your bank account. The bank will want a cash flow projection from an accountant when you set up the account and we think they will base your account limit on that. We never had any problems with an account limit. One thing you can’t do without legal residency is online banking so you’ll have to go into the bank for all transactions.
Can you share the contact of a lawyer you recommend?
Hi Jessica, Unfortunately, we don’t have a lawyer or firm that we currently recommend for this as our experience has gone downhill with who we were using before. You could ask for a recommendation in one of the groups for expats in Costa Rica on Facebook.
Hello, I am interested in starting a construction company in Costa Rica to build commercial and residential properties. I currently own a construction company in New York. Do I need to be a resident to be able to start this type of business? and will I need an actual physical office to run my company?
Hi Anthony, You don’t need to be a resident to own a business but you’re supposed to employ locals to do the labor. I don’t think you would need an actual physical location. They will need an address to put on the documents to file for your corporation but lots of people have businesses (online or otherwise) without a physical location.
Hi guys!
Super helpful information here. Can you share approximately how much it cost you in legal fees, tax registration, banking fees, etc to set up a business in CR? Are we talking $1,000 or $10,000? Any guidance would be helpful! Thanks!
Hi Javier, I think it was around $1,000-1,500. It has been a while but that ballpark seems right.
Hello,
I am in the process of taking ownership of a small boutique hotel in Guanacaste. I have a great lawyer and she is helping with most things.
However I am curious about the two options and what the pros and cons are. Opening a CR corporation vs operating a US corporation in CR. I owned a US business for several years and am familiar with that aspect and am currently learning about the process of owning and operating a CR corporation. My first impression is that the fees are high, credit card processing is 5.4% CR vs 2.99% US. Ultimately that fee will be passed on to my clients, but if I can stay competitive in my pricing by having less overhead that would give me a nice advantage.
I’m just not familiar with a US corporation that’s operating in Costa and if that’s even possible. I only process transactions online through booking services like Airbnb that are linked to my account with PayPal. Also not sure if PayPal is my best option at this point and curious what you would recommend for credit card processing in CR. Thanks for any help you can provide!
Hi Logan, We’re not sure you can operate through the US if you have a physical location in Costa Rica. Seems like maybe you can’t. But your lawyer should know for sure. People who live in Costa Rica but work completely online with no physical location in CR do sometimes have companies in the US only, but that seems different than owning a hotel in CR. Our business is in the US so everything goes through the US in terms of PayPal and billing. There are other payment options for companies in Costa Rica. Some use payment link systems through BAC, and BN does connect to PayPal, but we aren’t sure of the particulars with that. Best of luck with your new hotel!
Hi Jenn and Matt,
Thanks a lot for sharing your experience with all of us.
I am from IT back ground and have a business in US. I would like to start a branch office there
any inputs on Information Technology business and can you refer an attorney
Hi John, We don’t have any insight on starting an IT business in Costa Rica. We also don’t have a lawyer that we recommend anymore after having a bad experience. Sorry we could not be of more assistance. Good luck with your plans.
Jenn and Matt-
Thank you for all of your information! You have made this transition so much more bearable. I do have a question about taxes in the US. When you have an Society of Limited Responsibility here in CR how do taxes work in the US? When we opened our business bank account they asked about US taxes and if I plan on filing them. Any insight?
Thank you!!
Hi Nicole, You still have to file US taxes when living in Costa Rica and they become more complicated/expensive when you have a business in Costa Rica. Your accountant has to fill out a couple of special forms to file with your US taxes since you have foreign assets. We would recommend talking to a tax specialist who does expat taxes, but basically, your foreign income is taxed in the US (there are exemptions). You will also have to file taxes in Costa Rica, like we talk about in this article.
Jenn & Matt,
Thank for your great website and supports you provide through questions/answers. Just wondering how are you able to keep up at answering everyone’s questions. That is amazing and very informative.
I think that I am now better informed when it comes to doing business in CR.
Hi Iven, Yes, it is a lot to keep up with. We stay busy! 🙂
Glad our article was helpful. We appreciate your kind words. Good luck with your plans.
Hello, My wife and I are interested in moving to Costa Rica and opening a cafe or small restaurant. I’ve been reading all the comments on only locals can work before I can obtain my residency. So I cant work at my own place then? Thanks in advance for any help.
Hi Conrod, Yes, that’s correct. You can own the restaurant but aren’t supposed to work at it unless you have legal residency.
Hello! I’m curious as to a situation where one owns the business, but cannot legally work in it unless you have residency.. what if you cannot find good, qualified locals for the jobs you need filled? What do you do then? Are you allowed to work those positions until it becomes filled?
If you really can’t find someone qualified, there are special visa programs that you can apply for as the person’s employer. Private schools often do this for native English speakers.
Hi! Thank you guys for taking so much time to blog so many amazing articles & answer questions!
I saw the question from the personal trainer and her wanting to open and operate her own gym in Costa.
I feel like I could be in a similar situation, however I wanted to write in and check just to make sure.
I am currently a hairstylist & salon owner in the states. I hold many licenses in the world of hair care, which means I bring a very specialized approach to hair care.
Do you guys think that I could open & operate/work a salon in Costa, or would I have to only hire Costa Rican’s as stylists?
Thanks for any guidance!
Dete
Hi Dete, We’re not sure but think you may need to hire Costa Rican stylists, or have permission to work. We would recommend talking to a lawyer in Costa Rica.
Hi Jenn & Matt,
I own a medical/dental/infection control supply company. Most of my products (non-pharma) disposables only – are drop shipped directly to end users in bulk. I would like to continue to supply hospitals, clinics, doctors, etc. once I retire and relocate premanently to CR. Where do hospitals/clinics/doctors get their supplies? Are they strictly regulated like the US? Since my business is primarily done by taking orders online and then drop shipped, my question is on import taxes and if those apply if products are drop shipped from manufacturers in the US? As a permanent resident, would it be easier for me simply to have a store front and stock?
Hi Lisa, We have no experience with this type of business so won’t be able to help much. Costa Rica is very regulated, though, so our guess is that the medical supply industry is highly regulated as well. The supplies would be subject to import taxes. It would be best to talk to a good lawyer in Costa Rica. Sorry we can’t help more!
Jenn & Matt,
Thanks so much for lots of great insight regarding starting a business in Costa Rica.
You stated the following:
“Ultimately, opening a business in Costa Rica was an adventure for us. We used it successfully for several years until our overall business structure changed and we shifted things back to our original corporation in the United States.”
Can you elaborate on that? I am wondering under what circumstances it might be better to have a corporation in the US rather than in Costa Rica.
Thank You,
Patty
Hi Patty, There were many reasons for us to close our Costa Rica company but the main reasons were the high taxes due to the new IVA and that the paperwork was too much hassle (the filing of electronic invoices). We found that we could do everything we needed to do through our US company with less hassle.
As a US citizen, you still have to file US taxes so there isn’t really a tax benefit to having a CR corporation instead of one in the US. Of course, this depends on your specific situation and is best discussed with a lawyer or tax professional.
Hi! My husband and I just visited costa rica for a week. We are wanting to open a kratom tea lounge(small one) kind of bigger than a smoothie shop. We would be moving from Florida. Any tips/recommendations on how to get started? Thank you!!!
Hi Julia, We don’t know much about kratom tea, but Costa Rica is somewhat old fashioned with what is legal vs. illegal for substances so you would want to make sure you wouldn’t have any problems getting the permits to open. Best to talk to a local lawyer. Good luck!
Hi there, we’re just starting up a business and about to open a bank account. We have an accountant but she’s a private accountant and we apparently need a public accountant to provide a cash-flow projection for our company. We have just been quoted $700USD for this which seems absolutely ridiculous and extortionate. What price should we be expecting to pay.
Thanks
Hi Sue, Our recollection is that we paid a few hundred dollars. This was about 5 years ago and it was a simple cash-flow projection for a small business. They would probably charge more for something more complicated.
Hi there Jenn and Matt, thank you for taking the time to write the informative article and taking the time answer all of the questions. That said, I have an additional question for you. My wife and I are retiring, however I have been offered a remote consultancy position with a company. All work would be online and they company requires that i have a local Costa Rican LLC (or similar). As i would be the only employee and it is the industry specific intrinsic knowledge that i provide, would i be required to hire a local or is this a “digital Nomad” type scenario. Do you have any thoughts / suggestions
Hi Alexander, You should consult with a lawyer, but we think if you have a Costa Rican company, you will need to get paid a salary so will need to be a legal employee. Not many jobs are so unique that you don’t need to hire locals. You have a unique situation, though, so we would ask a lawyer what they think.
Hello Jenn and Matt,
Thank you guys for the great information, this was so beneficial to me.
I operate a natural skincare business where I sell my products online. Some of my products are made from scratch and others are formulated from bases that I purchased here in the US. My family and I are looking to move to Costa Rica within the next two years and wondering if I could still operate my business as a resident of Costa Rica? I would hire a local to assist me with the daily operations of the business.
Thank you guys!
Hi Althea, If you hire a local and keep it on the books, you’ll need to pay into their Caja, comply with all CR labor laws, and would probably want to start the business as an official CR company. If your company is already based in the US, you could keep it there if you don’t need an assistant. It’s probably best to talk to a good lawyer in Costa Rica before you do anything.
Thanks guys, I appreciate your response.
Hi, I own a company name in CR it’s a S.A.. I also own a house and some land. My business will be two fold. I will operate a Screen printing business Which I have done all over the world for the part 40 years and also a Harley Davidson B&B. I will importing the printing equipment from china and the Harleys from the USA. along with all of my tools for repairing them. My question is…. can I work on my motorcycles, operate my printing press, and my B&B or do I have to hire workers for that? These businesses will be located in my house on my property. Not a commercial storefront in a town.
Hi Ric, You should talk to a lawyer in Costa Rica, but we think that since you have a Costa Rican company and your clients will be in Costa Rica, you are supposed to hire locals to do all the work for the screen printing and operating the B&B.