It is possible in Costa Rica to register your property under your own name or in the name of a Limited Liability Company (Sociedad de Responsibilidad Limitada). Many buyers prefer to purchase property in the name of a company, especially if they live most of the year outside of Costa Rica. With a company it is easier to set up power of attorneys that allow your lawyer or your property manager to administer the property on your behalf - whether that be dealing with the utility companies, dealing with the local municipality or opening a bank account to manage the expenses of the property. The best purchase structure for your unique situation should be discussed with your lawyer prior to the purchase.
If you do decide to purchase your property in the name of a company, it is very important to make sure you are aware of the annual reporting and tax requirements for the company... and to make sure your lawyer is taking charge of this for you!
Failure to complete the annual company compliance can result in problems for the owner of the property. For example, a failure to pay the annual company tax for three consecutive years will result in the automatic dissolution of the company.
Pignataro Abogados kindly shared with us the full 2024 compliance obligations that you should be aware of if you own a company. These are listed below. Please note that in addition to the company compliance listed below, you will also need to stay up to date with your municipal property tax and any luxury home tax that is due.
Annual Shareholders' Meeting:
- Discuss and approve the annual report.
- Determine the distribution of dividends.
- Appoint or revoke management and the comptroller (when applicable).
- Address other ordinary issues outlined in the bylaws.
Registered Agent:
- As per Article 18, section 13) of our Commerce Code, entities with representatives outside Costa Rica must have a Registered Agent. You will likely appoint your lawyer to this role during the purchase process.
Annual Corporations' Tax:
- Active and inactive entities must pay the annual tax by the end of January. Inactive companies are those that only hold property and have no business activities.
- Current tax fees are set at ¢69,330.00 (US$124.00 at today’s exchange rate) for inactive companies, and ¢138,660.00 (US$248.00 at today’s exchange rate) for most active companies, during the month of January of each year.
Ultimate Beneficial Owners' (UBO) Registry Declaration:
- Submit UBO information by April 30 using a Costa Rican official digital signature card (issued for nationals and permanent residents by the Central Bank).
- Failure to comply with this obligation shall result in fines imposed by the Tax Authority equivalent to 2% of the company’s gross income for the previous fiscal period, with a minimum of three base salaries and a maximum of one hundred base salaries, which are equivalent to approximately ¢1,056,494.73 (US$1,889.97 at today’s exchange rate) and ¢35,216,491.00 (US$62,999.09 at today’s exchange rate). In addition to the financial penalties imposed, the National Registry will not issue certifications or record any documents for a company that is in default.
Declaration of Inactive Companies:
- Entities under activity code No. 960113 must complete the declaration by April 30, 2023; this declaration must be uploaded through the Tax Authority's official website.
Education and Culture Stamp:
- Pay the fixed amount of ¢5,000.00 by March 31, 2024; this payment must be made through the official website of the Bank of Costa Rica (state owned bank).
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