Investors may acquire personal and real property under their own name or through a corporation. The most common practice is to acquire the property by means of corporations, which are the most suitable instrument to start planning a good investment in Costa Rica. Corporations are created before a Notary Public and registered in Costa Rica’s Public Registry. This institution is responsible for keeping all the information about every corporation registered in the country.
Advantages of using corporations:
 Readiness and flexibility in the conveyance of property that is part of a corporation’s equity .
Maximization of resources .
Complex succession processes are avoided.
The power of attorney-based representation facilitates the corporation’s activity.
The use of two types of corporations, stock and limited liability, is suggested for investing purposes. Both shall be constituted by a minimum of two partners, but later on, they may become sole owners or continue operating with several partners, who may be either natural persons or legal entities.
Stock Corporations
Incorporation: For incorporation, a minimum of two partners is required, yet they can later on become sole owners. The Board of Directors has three members: the President, the Secretary and the Treasurer, in addition to a Statutory Examiner, who is responsible for supervising the corporation’s activity. In the event that none of the members of the Board of Directors lives in Costa Rica, a resident agent, who must be a lawyer, is to be appointed.
Representation: The corporation may have one or more representatives entitled to act on its behalf.
Shares: The capital stock (shareholders’ initial capital investment) shall be in the form of share certificates. These are issued under the name of all shareholders authorized to convey them without requiring the consent of the other shareholders. The transfer process is really expeditious; the share is endorsed, an entry is included in the shareholders’ ledger and a stock grant agreement is made.
Ledgers: Each shareholder corporation must have a set of six ledgers: (three legal and three accounting ledgers), for the recording of the corporation’s activities.
Shareholders’ General Meetings: The partners shall meet at least once every year to discuss different issues regarding the corporation.
Limited Liability Corporations
Incorporation: For incorporation, a minimum of two partners is required yet, later on, may become sole owners. The Board of Directors may have one or several members; however, unlike stock corporations, it may be managed by only one member, who would hold the position of a manager and act on behalf of and represent the corporation. This type of administration may be very convenient for investors not wanting to include other persons in their businesses. As in the case of stock corporations, if none of the members of the Board of Directors lives in Costa Rica, a resident agent, who must be a lawyer, is to be appointed.
Representation: The corporation may have one or more representatives entitled to act on its behalf.
Shares: In this corporation, the capital stock is represented by shares that cannot be transferred via endorsements. In the event that a share is to be transferred to persons not involved in the corporation, the consent of the other shareholders is required .
Ledgers: Each limited liability corporation must have a set of five ledgers: three legal and two accounting ledgers for the recording of the corporation’s activities.
Shareholders’ General Meetings: The partners shall meet at least once every year to discuss different issues regarding the corporation .
Corporation Management Service
Montejo & Associates also offers corporation management services, highly convenient for foreign clients doing business through corporations.
Our service includes safekeeping all of the corporation’s legal documents: articles of incorporation, share certificates, ledgers, annual payment of cultural and education taxes, contracts, etc.
Which corporation to acquire?
In conclusion, our legal advice on the type of corporation you should use will depend on the investment you wish to make and on your needs.
For further information, do not hesitate to contact us. We will be glad help you. |
