Starting Your Own Business

Café David at Rescate Animal Zoo Ave in La Garrita

In principle, it’s a snap. Anyone can start her/his own business. You don’t have to be a Costa Rican citizen, or even a resident. A standard 90-day tourist entry allows you to buy an existing business, or start your own.

Then it gets a little more difficult. First tip: find yourself a good, competent attorney. Lawyers abound in Costa Rica; there seem to be as many as stars in the skies. But the good, upfront, straightforward ones are few and far between. Real Estate Costa Rica can recommend an excellent lawyer who will guide you through all the legal steps, and will make doing business in Costa Rica as hassle-free as possible. Or if you prefer, you can consult acquaintances who already are business owners, or contact your country’s embassy; most will have lists of recommended Costa Rican attorneys. Ditto for an accountant. Attorney and accountant will be your two pillars of support.

Incorporate your company. Good lawyers have corporations already on the shelf; if you want a special name, the attorney will see if it is available, and submit the articles of incorporation. There are a bunch of bureaucratic steps and regulations that a good lawyer will guide you through quickly, such as paying registration fees and stamp duties; registering the incorporation charter in the mercantile section of the public registry and obtaining authorization to legalize the company books; and filing Form D-140 with the Tax Department to register the firm as a taxpayer. Again, this is your attorney’s job.

A non-resident cannot physically work unless you have a work permit or certain types of residency. If you plan to have employees, there are additional items to deal with. You will have to register for labor risk insurance with the National Insurance Institute (Instituto Nacional de Seguros) and register the company as an employer with Caja Costarricense de Seguro Social (Social Security Institution). If your type of business takes place in an office or physical structure (tourist office; hotel; restaurant; B&B) you must apply for a sanitary permit, and apply to the municipality for a business permit. This is why a good lawyer is obligatory.

Learn the labor laws! If you have employees, you have to ensure social security benefits through joint employer/employee contributions, usually paid monthly. They are entitled to sick pay, severance pay and holiday pay. There is also the Aguinaldo, the 13th month bonus, paid to employees in December, calculated on the basis of how many months of the year the employee has worked for you. Letting someone go, or having someone quit, is a pain in the you-know-where. If hiring labor for a farm, there are other requisites. You also have to file tax forms. All of the above can be a real hassle unless you find a good accountant.

Once all this is assimilated, your business will be as good as you can make it!
Want to know more? Feel free to contact us at realestatecostarica.com@gmail.com.