How to Do Business in Costa Rica Without Forming a Business Organization

Generally, when doing business in Costa Rica, it is advised that you register a business locally. This business could either be a Corporation, a Limited Liability Company, a Limited Partnership or a General Partnership. The Costa Rica law specifies that foreign companies or individuals who seek to conduct business in the country should be registered in one of the recognized forms of business organizations stated above. However, there are some exceptions to that.

If a foreign company meets certain laid down requirements by the Costa Rican law, that company is allowed to conduct business in Costa Rica through a parent company subsidiary. The first requirement is the appointment of a legal representative who would be given full powers of attorney to act on behalf of the subsidiary.

Once that first requirement is met, a series of statements would need to be provided. These includes a Statement of the subsidiary’s corporate purpose and the amount of its assigned share capital; a Statement which will bear the Parent Company’s purpose, share capital, full names of current officers and managers and the legal term of the parent company.

The next step would be another statement, this time stating that the proxy and the Branch would be subject to Costa Rican laws and jurisdiction when it comes to matters that have been performed in the country and that the rights of the parent company to appeal to its local jurisdiction has been waived.

The above requirements are for the establishment of a branch in Costa Rica but there is another exception to registering an organization, which is the establishment of a proxy through whom the foreign company can do business in Costa Rica. That proxy would be the representative of the company. Here too a Statement is needed showing the Corporate purpose, Share Capital and Legal Term of the Parent company including the full names of all current officers and managers. There should also be a formal statement that the proxy will be subject to Costa Rican laws and jurisdiction when it comes to acts that are performed or are to be performed within the country. The same waiver of the rights of the parent company to appeal to the laws of its local jurisdiction would also apply here.

The Power of Attorney granted in both circumstances must be notarized and authenticated by the relevant authority where the Power of Attorney is granted.

This is a legal and accepted way of doing business in Costa Rica for an already existing company that does not want to form another business organization in the country.