Why Open a Company in Costa Rica? Key Benefits for Foreign Entrepreneurs and Investors
Introduction
Costa Rica has steadily positioned itself as one of the most business-friendly and economically stable jurisdictions in Latin America. For foreign entrepreneurs, international investors, and globally mobile businesses, opening a company in Costa Rica offers a rare combination of regulatory transparency, tax efficiency, political stability, and international credibility.
Unlike traditional offshore jurisdictions, Costa Rica is a fully compliant, onshore country with a territorial tax system, meaning only locally sourced income is subject to taxation. This makes Costa Rica particularly attractive for international service providers, digital businesses, holding companies, and nearshoring operations that serve clients outside the country.
Over the past decade, Costa Rica has also benefited from strong foreign direct investment, robust trade agreements, and a growing reputation as a nearshoring hub for North American and European companies. Multinational corporations, startups, and SMEs alike have chosen Costa Rica as a strategic base for regional or global operations.
This article explains why Costa Rica company formation is increasingly popular, outlines the key benefits for foreigners, and compares Costa Rica with other Latin American business hubs to help you determine whether it is the right jurisdiction for your business goals.
➡️ For a complete overview of setup, taxation, and compliance, see our pillar guide:
Costa Rica Company Formation: The Definitive Guide for Foreign Entrepreneurs and Investors
Costa Rica’s Territorial Tax System: A Major Advantage
One of the most compelling reasons to open a company in Costa Rica is its territorial taxation principle, which distinguishes it from many high-tax jurisdictions worldwide.
What Does Territorial Taxation Mean?
Under Costa Rica’s tax system:
- Only income generated within Costa Rica is subject to Costa Rican income tax
- Foreign-sourced income is generally exempt from local taxation
- The tax treatment depends on the source of income, not the nationality of the company owner
When structured correctly, this system can significantly reduce the effective tax burden for international businesses.
Who Benefits Most from Territorial Taxation?
Costa Rica’s territorial tax system is particularly advantageous for:
- International consultants and advisors
- Digital service providers and online agencies
- Software, SaaS, and technology companies
- Holding companies and IP structures
- Export-oriented service businesses
For example, a Costa Rica company providing consulting or digital services to clients in Europe or North America may legally operate with minimal local tax exposure, provided no income-generating activities take place within Costa Rica.
⚠️ Important: Foreign tax obligations may still apply depending on the owner’s personal tax residency and global reporting obligations. Proper structuring and professional tax advice are essential.
100% Foreign Ownership with No Residency Requirement
Costa Rica is one of the most open jurisdictions in Latin America when it comes to foreign ownership.
Foreigners are allowed to:
- Own 100% of a Costa Rica company
- Act as shareholders, directors, and managers
- Incorporate without Costa Rican residency or citizenship
- Maintain full control without local partners
There is no requirement for Costa Rican shareholders, nominee owners, or resident directors, which is a significant advantage compared to many other jurisdictions in the region.
This flexibility makes Costa Rica especially attractive for non-resident entrepreneurs who want operational control, asset protection, and legal ownership without relocating.
Political Stability and Strong Rule of Law
Costa Rica stands out in Latin America for its long-standing political stability and institutional strength.
Key features include:
- Over 70 years of uninterrupted democracy
- An independent judiciary
- Strong contract enforcement
- A transparent and reliable National Corporate Registry
Costa Rica famously abolished its military in 1949, redirecting national investment into education, healthcare, and institutional development. As a result, the country enjoys one of the highest standards of governance in the region.
Why This Matters for Investors
For foreign investors and international businesses, political stability translates into:
- Lower political and regulatory risk
- Predictable legal outcomes
- Strong protection of property and shareholder rights
- Long-term confidence for capital deployment
These factors make Costa Rica an attractive jurisdiction for businesses seeking stability rather than short-term tax arbitrage.
Strategic Location and Global Market Access
Costa Rica’s geographic and economic positioning offers significant strategic advantages.
Geographic Benefits
- Located between North and South America
- Direct access to both Atlantic and Pacific oceans
- Well-developed ports and logistics infrastructure
Trade Agreements and Market Access
Costa Rica has an extensive network of Free Trade Agreements (FTAs), including with:
- United States
- European Union
- United Kingdom
- China
- Canada
- Mexico
- Most Latin American countries
These agreements allow Costa Rica-based companies to access major global markets under favourable trade conditions, making the country ideal for export-oriented businesses and regional headquarters.
Skilled Workforce and Nearshoring Opportunities
Costa Rica has become one of the leading nearshoring destinations in the Americas, particularly for North American companies seeking operational efficiency without sacrificing quality.
Workforce Advantages
- High literacy and education levels
- Strong English proficiency
- Competitive labour costs compared to the US and Canada
- Well-developed technology, engineering, and service talent
Popular Sectors
Costa Rica is especially strong in:
- IT and software development
- Business process outsourcing (BPO)
- Customer support and shared service centres
- Medical device manufacturing
- Engineering and life sciences
Global companies such as Intel, Amazon, HP, and Procter & Gamble have established major operations in Costa Rica, reinforcing its reputation as a high-quality nearshoring hub.
Ease of Company Formation for Foreigners
While professional assistance is recommended, Costa Rica company formation is relatively straightforward.
Key Advantages
- Clear legal framework for incorporation
- Reliable and digitised National Registry
- Well-defined corporate and commercial laws
- Availability of bilingual legal, accounting, and compliance professionals
Most companies can be incorporated within 2–4 weeks, depending on documentation readiness and banking requirements.
Flexible Company Structures
Costa Rica offers several legal entities suitable for foreign entrepreneurs, with two structures being the most common.
Sociedad de Responsabilidad Limitada (SRL)
- Similar to an LLC
- Ideal for SMEs and service companies
- Lower compliance and administrative burden
- Ownership represented by quotas rather than shares
Sociedad Anónima (SA)
- Corporate-style structure
- Commonly used for investment, holding, and real estate
- Allows share transfers
- Suitable for multiple shareholders and investors
Choosing the right structure depends on business activity, growth plans, and compliance strategy.
Banking System: Regulated and Reputable
Costa Rica has a conservative, well-regulated banking system that prioritises compliance and financial transparency.
Banking Benefits
- Internationally recognised banks
- Full compliance with FATCA and CRS
- Strong credibility with global counterparties
- Suitable for legitimate international business operations
Banking Challenges
- Strict due diligence requirements
- Detailed source-of-funds verification
- In-person interviews may be required
Although banking approval can be demanding, companies that prepare proper documentation and work with experienced advisors typically achieve successful outcomes.
Reputation: Onshore, Compliant, and Transparent
Costa Rica offers a strong international reputation compared to traditional offshore jurisdictions.
The country:
- Is not blacklisted
- Is widely accepted by international banks
- Maintains strong compliance standards
- Is suitable for working with regulated clients
For businesses operating in Europe or North America, Costa Rica provides a compliant structure that balances tax efficiency with credibility.
Cost Efficiency Compared to Other Jurisdictions
Costa Rica offers a balanced cost structure that appeals to startups and established companies alike.
Cost Advantages
- Lower incorporation costs than many EU jurisdictions
- More affordable operational costs than the US
- Competitive accounting, legal, and compliance fees
- Reasonable labour costs for skilled professionals
This makes Costa Rica particularly attractive for growing businesses that require quality infrastructure without excessive overhead.
Who Benefits Most from a Costa Rica Company?
Costa Rica company formation is particularly suitable for:
- Foreign entrepreneurs and business owners
- Digital nomads operating structured businesses
- International consultants and advisors
- LATAM-focused companies
- Holding and investment structures
- Nearshoring and outsourcing firms
Costa Rica Compared to Other LATAM Jurisdictions
Costa Rica is frequently compared with other regional options such as:
- Panama: More offshore-oriented, less transparent
- Mexico: Large domestic market, higher compliance burden
- Colombia: Emerging market with a more complex tax system
Costa Rica stands out for its:
- Political and institutional stability
- Territorial taxation
- Transparent legal system
- Balanced compliance requirements
How Bris Group Supports Costa Rica Company Formation
At Bris Group, we support international clients throughout the entire lifecycle of Costa Rica company formation, including:
- Strategic jurisdiction selection
- Company incorporation and structuring
- Tax planning and compliance
- Corporate banking assistance
- Ongoing legal, accounting, and advisory services
Conclusion
Opening a company in Costa Rica offers foreign entrepreneurs and investors a powerful combination of tax efficiency, political stability, skilled workforce access, and international credibility.
When structured correctly and supported by experienced professionals, a Costa Rica company can serve as a secure and scalable foundation for international business expansion in the Americas and beyond.
Need help registering a Costa Rica Company?
Our experienced team at BRIS Group is ready to guide you through the entire process — from name reservation and documentation to successful incorporation.
Contact us at [email protected] for personalized assistance.
Learn more about Starting Offshore Company in Costa Rica and other American Courtiers for Company registration :