E.            INCORPORATION OF A COSTA RICAN COMPANY

 1.        Name - The name can be in either English or Spanish.  Country names cannot be part of the name of a company.

2.        Cost – The cost of a corporation is nine hundred fifty ($US 950.00) US dollars for the first company, and seven hundred fifty ($US 750.00) for additional companies for the same client.  Fees include:

·        Consulting

·        Legal fees

·        Registration costs

·        Cédula Juridica – Legal identification card

·        Costa Rican legal minute books

·        Costa Rican legal accounting books

·        Costa Rican shareholder register books

3.     Administration Charges, paid annually in advance

·        Administration - $US 300 – includes registered office, updating accounting books, annual filing (but not preparation of taxes or financial statements), dealing with legal notifications and other administrative functions as required.

·        Where income taxes must be paid (usually 12% of the net profit) the charge is an additional $100.  This includes making quarterly payments the following year for estimated taxes as required, annual tax filing with Costa Rican style financial statements and English style financial statements for the client.

·        Nominee Shareholders and Directors - $400 – Where complete confidentiality is required we would provide those shareholders and officers required for the company.  Two shareholders, a President, Treasurer, Secretary and Fiscal are needed for a Costa Rican company.

 4.        Incorporation Time

·        We have companies that we have incorporated available for immediate use.  These companies are new, and have never been active in any way.  They have very broad objects of incorporation and can do almost anything.

·        A specialized company will take from 30 to 45 days for registration and incorporation once the registry has approved the name

            5.            Types of Corporation

            There are two basic types of limited liability companies available under Costa Rican law as shown below.

1.  Limitada

- May have a manager instead of a board of directors.

- Shares cannot be endorsed or transferred.  They must be assigned.  To be    assigned they require approval of 75% or more of the other stockholders.

- If a person's name is used as part of the name of a company, that person is personally liable for corporate debts to the amount of the paid up capital of the largest single stockholder.

The Limitada form of incorporation is not recognised by the department of internal revenue in the U.S. as being a limited company.  Income is treated as if the stockholders were a partnership.  Costa Rica treats this form of corporation as a limited liability company.

2.  Sociedad Anonima (Recommended in most cases)

- Requires at least three directors - president, secretary treasurer

- Requires a comptroller, called a “fiscal”, to ensure the company abides by the laws of Costa Rica.

- There must be at least two shareholders at incorporation.  After incorporation, one shareholder may wholly own the company.

- Total amount of capitalization must be paid in advance of incorporation.  These funds become available to the corporation after the company is incorporated.  Minimum capital is 1,000 colones.

3.  The Casa Canada Group recommends the Sociedad Anonima form of incorporation as it has more liability protection for the owner, and is more flexible.

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