INCORPORATING IN COSTA RICA

Costa Rica - "the Switzerland of the Americas" - has always created favorable tax conditions for offshore operations, but the country's popularity as such, has only caught on over the last few years. Banks are required by law to maintain absolute secrecy regarding the operations of their clients. Information about normal banking operations is not passed on to any government agency - including the Tax Department. Information given to local attorneys/notaries is protected by professional secrecy. Under Costa Rican law there is still no particular requirement to get any licence to operate an online casino or gambling website.

An interesting angle of financial secrecy is the use of Costa Rican "offshore" corporations. Like bank accounts, these corporations can be started by anyone - citizen, resident, or tourist - and are supposed to be totally secret. Since there's no way of knowing just whose names are on the corporation books, it's almost impossible to discover who actually controls any of these corporations. In fact, the legal name is "sociedad anonima" or "anonymous society". That's why corporation names are appended with "S.A." instead of "Inc." or "Ltd."

Costa Rica's corporate structure allows any person (Costa Rican or not) to control a company without his or her name appearing in the public records. Our Costa Rican law office can set up your corporation without the real owner's name ever appearing in the record. Although there is a legal president, vice-president, secretary and treasurer (our nominees), the actual ownership of the corporation is invested in whoever physically has the stock certificates in his/her pocket or safe-deposit box.

A Costa Rican S.A. is free to engage in many types of business activities, both in Costa Rica and in other countries and it pays nothing on what it earns outside of Costa Rica! Local laws require that a yearly tax report must be filed (we do the job); should there be no income to report, there are no tax consequences. Last but not least, Costa Rican corporations are now one of the best offshore vehicles because many of high-tax rated countries like the U.S.A. do not consider them as offshore companies!!!

Please note that the Standard Authorized Share Capital is only CR Colones 10,000 (something like US$30). Bearer Shares are not permitted here but actual ownership of a Costa Rican corporation is invested in whoever physically has the stock certificates in his/her pocket (Shares can be endorsed) or safe-deposit box (We do provide such service locally).

Time frame to incorporate: about 2 weeks

Corporate Nominee Directors are simply corporations who undertake by way of a signed legal agreement with the owner of a company to act as a director of that company on their behalf.

The over-riding advantage of this is that the nominee's name will show up in all (if any) government or public records relating to the company, thus giving the company owner or manager a further degree of protection and privacy should records be searched. Frequently the nominee director is itself another offshore company, thus giving yet further protection from invasion into the true owner's privacy.

Here at OffshoreSimple we (or one or other associated companies) act as a nominee for a good many client companies and, in addition to protecting the privacy of the company managers, carry out the statutory duties on their behalf. Where we (or our associate companies) act as a nominee, a Form of Indemnity has to be signed by the Beneficial Owner(s) of the company, both protecting us from any financial or other liabilities of that company and giving back power of day to day management to the beneficial owner. A separate Power of Attorney will also be provided on a regular basis.

POPULATION
The Population of Costa Rica is approximately 4,000,000, about 1.5 million live in the country's capital, San José .

POLITICAL STRUCTURE
Costa Rica became independent from Spain on September 15, 1821. Since 1506 until 1821, Costa Rica was a colony of Spain governed from Guatemala City. The Government is divided into three branches: Executive, Legislative and Judicial. Executive Branch: Headed by the by President of the Country. It also includes the President, Vice-president, Ministers and Presidents of Autonomous Institutions. The Execute Branch enforces and regulates the law, and it is in-charge of the daily administration of the Government. The Legislative Branch: 57 Congressmen, responsible for the approval of the laws and amendments to the constitution. The Judicial Branch: Responsible for the application and interpretation of the Constitution, Laws, and Regulations. The Supreme Court Justices and other judges, including a Constitutional Court compose it.

INFRASTRUCTURE
Many international passenger and cargo airlines fly to Costa Rica, including American Airlines, Continental Airlines, United Airlines, Grupo Taca, Copa, Condor, Martin Air, British Airways, and Iberia. The main airport is called Juan Santamaría, located in the province of Alajuela, about 15 minutes from the capital.
Several ocean freight companies maintain regular services to Costa Rica, including container cargo, from both coasts of the United States, Europe, Asia and Latin America. Most of Costa Rica´s exports and imports go through the port in Limon, in the Caribbean, and through the port of Caldera, located in Puntarenas, in the Pacific.
The Communication and Electricity systems cover the needs of the agricultural and industry sectors and are among the most advanced in Latin America.

ECONOMY
Costa Rica's economy was originally based on the export of coffee and banana. This has changed dramatically during the last few years. Seeking to compete in the world market, Costa Rica has now diversified its economy and it became a member of the World Trade Organization. It has developed incentives for companies operating under the Free Trade Zone Regulations and other export programs.

LANGUAGE
The official and spoken language is Spanish. A large part of the urban population speaks and understands English. Company names and trademarks may now be recorded in any language. Certain clauses in contracts of adhesion must be written in Spanish. All documents written in any other language must be translated for purposes of judicial claims.

CURRENCY
Costa Rican Colon

EXCHANGE CONTROL
None

TYPE OF LAW
Based on Roman Law.

PRINCIPAL CORPORATE LEGISLATION
Commerce Code, Law 3284 of April 30, 1964.

COMPANY FORMATION

TYPE OF COMPANY FOR INTERNATIONAL HOLDING, TRADE AND INVESTMENT
The mostly used type of company is the "Sociedad Anónima", in which shareholders are not liable for the actions of the company. The "Sociedad de Responsabilidad Limitada" or LLC is also recommended.

PROCEDURE TO INCORPORATE
By presenting to the Commercial Registry, the articles of incorporation duly notarized by a Costa Rican Notary Public who creates a Public Deed for registration.

RESTRICTIONS ON TRADING
There are certain minimum capital and other regulations for banking, financing, investment funds, fund management, and pension funds. There are certain monopolies controlled by the state, i.e. insurance, telecommunications and electricity.

LANGUAGE OF LEGISLATION AND CORPORATE FUNDS
Spanish.

REGISTERED OFFICE REQUIRED
The company should have a registered street address in Costa Rica or abroad.

NAME APPROVAL REQUIRED
Yes. Should be done at incorporation. Previous searches of names are recommended.

TIME TO INCORPORATE
1-2 weeks.

NAME RESTRICTIONS
A name that is similar to or identical to that of an existing company. Numbers, letters, and places are not enough to differentiate between two companies. "Company", "investment ", "corporation", "", and "business" are words that for purposes of the company's name have the same meaning.

LANGUAGE OF NAME
No limitation; if the name is not in Spanish, the translation must be included next to the name of the company.

NAMES REQUIRING CONSENT OR A LICENSE
For banking, financing, investment funds, fund management, and pensions funds.

SUFFIXES TO DENOTE LIMITED LIABILITY
All Costa Rican corporations must end with the suffix S.A., Sociedad Anónima, Ltda, Limitada, SRL, or Sociedad de Responsabilidad Limitada.

DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES
Disclosure is required for certain government procurement activities and for certain businesses in which a minimum of Costa Rican ownership share capital is required.

CHANGE OF JURISDICTION
Subsidiaries of companies organized under a foreign law may be incorporated in Costa Rica and be governed by Costa Rican Law.

SHELF COMPANIES
We have a number of existing companies. The companies are "clean", that is to say, they have never traded nor engaged in any transaction whatsoever.

SHARES, TAXATION AND OTHER MATTERS

AUTHORIZED AND ISSUED SHARE CAPITAL
The normal authorized share capital is CRø10,000.00 divided into 10 shares of CRø1,000.00 each. The share capital may be expressed in any currency. All share capital must be suscribed by the shareholders, but its payment may be at any time. The share capital may be paid for with cash, securities, moveable, real estate and services.

CLASSES OF SHARES PERMITTED
Common shares and preferred or special shares. All shares must be nominative; bearer shares are not allowed. Preferred or special shares may have limitations or restrictions on voting, but voting cannot be limited for issues decided upon by extraordinary shareholders meetings (i.e. amendment of articles of incorporation, mergers, acquisitions, share capital increase, change of address to a foreign country).

BEARER SHARES
Not allowed by law.

TAXATION
A Costa Rican corporation does not pay any income tax on profits earned abroad and without any link to Costa Rica . An Education and Culture tax in the amount of US$30.00 has to be paid in March of every year by every corporation.

LICENSE FEES
No annual tax is payable.

FINANCIAL STATEMENT REQUIREMENTS
None

MANAGEMENT STRUCTURE

DIRECTORS
Only natural persons may act as directors and the minimum number of directors is three. They may be of any nationality and need not be residents of Costa Rica. The directors must be at least a President, Secretary and Treasurer.

STATUTORY CONTROLLER
The shareholders must appoint a Controller-Internal Auditor, who will control and audit the actions of the directors; the Controller protects the interests of the shareholders.

COMPANY RESIDENT AGENT
If the directors of the company do not have their domicile in Costa Rica, a Resident Agent must be appointed. The Resident Agent must be an attorney with an office in Costa Rica

SHAREHOLDERS
To incorporate the company, the minimum number of shareholders is 2. After the company is recorded, the shareholders required may transfer their shares to only one shareholder. Natural persons or companies may be shareholders.

CORPORATE HIGHLIGHTS

GENERAL
Type of Company - Stock Corporation or limited liability company
Political Stability - Stable Democracy
Common or Civil Law - Civil Law
Disclosure of Beneficial Owner - No, except for government procurement
Change of Domicile Permitted – Yes
Tax on Offshore Income – None

CORPORATE FEATURES
Minimum Number of Shareholders - At least 2 for incorporation; later 1
Minimum Number of Directors - President, Secretary and Treasurer, plus 1 Controller
Bearer Shares Allowed – No
Corporate Directors Permitted – Yes
Company Secretary Required – No
Standard Authorised Share Capital – 10,000 colones

LOCAL REQUIREMENTS
Registered Office/Agent - Resident Agent if directors have address abroad. Domicile of the company may be abroad
Company Secretary – No
Local Directors – No
Local Meetings - No, but places of meetings must be indicated in articles of incorporation
Government Register of Directors – Yes
Government Register of Shareholders – No

ANNUAL REQUIREMENTS
Annual Return - No
Submit Accounts – No, unless income is generated in Costa Rica

ANNUAL GOVERNMENT COSTS
Minimum Annual Tax/Licence Fee - US$ 30.00 (Education and Culture Tax)
Annual Return Filing Fee - None, unless income is generated in Costa Rica

SHELF COMPANIES AVAILABLE
Offshore companies are the preferred company structure to achieve anonymity and privacy protection, keep all business details confidential and combine all this with limited liability and legal tax exemption. The offshore incorporation Costa Rica allows you to compile the range of services from the following list. Such a range of products and services out of one hand is not offered by anybody else!

CORPORATE PACKAGE
Each corporate package includes:
Certificate of Incorporation
Memorandum and Articles of Association
Appointment of the First Director
Registered Office service to December following incorporation
Registered Agent service to December following incorporation
Share certificates
Corporate Seal (may be delivered separately)

The complete corporate package is delivered by express courier.

In case you may have any matter or issue to discuss or clarify, please contact us

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