Jurisdiction Spotlight: Costa Rica

Costa RicaOften compared to Panama, Costa Rica is next in line for a closer inspection.

Not exactly a major player in the international financial services sector, what is it that makes this jurisdiction so attractive?

And what is the deal with offshore online gambling in Costa Rica?

Geography and Demography

Map from Wikipedia.

Map from Wikipedia.



Full Name:;República de Costa Rica (Republic of Costa Rica)

Official language(s):;Spanish

Other major languages:;English

Type of government:;Constitutional republic

Area:;75,517 km²

Timezone:;UTC+1 (GMT)

Population:;4.5 million

GDP per capita:;11,000 USD

Currency:;Costa Rican colón (CRC)



Costa Rica can best be summed up in a two-worded French phrase: laissez-fare, literally let do. This is a country where asking forgiveness is more common than asking for permission. This stems from a small, corrupt, and underfunded government.

Gambling? Unregulated.

Financial services? Barely regulated.

Regulators and authorities in Costa Rica are famous for taking a hands-off approach to nearly everything. There are things going on in the jungles and cities alike of Costa Rica that would (and often do) make even the most seasoned veteran in financial services, gambling, entertainment, and many other industries blush.

Incorporation and Business

General Information

On the surface, there are a lot of similarities between forming a company in Panama and forming a company in Costa Rica.

Much like with Panama – contrary to popular belief, there is no such thing as IBC in Costa Rica. I cannot make this clear enough. A lot of service providers are marketing Panamanian IBC. No such thing exists.

Instead, there are two primary types of companies: the Sociedad Anónima and the Sociedad de Responsabilidad Limitada.


Costa Rica’s reputation is all over the spectrum.

There are many who view it favourably or its business-friendliness, lack of regulation, and general easygoingness.

Then there are many who view it as a place for criminals to hide in plain view, obtaining Costa Rican citizenship to avoid extradition.

It is a tax haven but it is not a problematic one. Secrecy is not high on the agenda – never has been.


Regulator? In Costa Rica? Surely, you jest.

SA – Sociedad Anónima

This is the most popular type of company in Costa Rica. It is very similar to its Panamanian counterpart.


  • Three directors.
  • One shareholder (corporate shareholders are permitted). No maximum.
  • No restrictions on residence and nationality of directors and shareholders.
  • No minimum share capital is required but 25% must be paid up.
  • Registered address in Costa Rica.

Contrary to Panama, bearer shares are not permitted in Costa Rica.


Territorial taxation applies. Income earned from outside of Costa Rica are not subject to tax in Costa Rica. Comparable to Panama and Hong Kong.

SRL – Sociedad de Responsabilidad Limitada

The SRL is comparable to LLC, although it is a taxable entity (not a tax neutral or pass-through entity).


  • Two members (corporate members are permitted).
  • No minimum (or maximum) capital required. Normally 10,000 USD.
  • Registered address in Costa Rica.


Territorial taxation applies. Income earned from outside of Costa Rica are not subject to tax in Costa Rica. Comparable to Panama and Hong Kong.

Public Records

The Registro Nacional has full records of companies, including names and addresses of directors and shareholders.

Nominees are often used.

Record Keeping (Bookkeeping)

Both SAs and SRLs must keep financial records but need not prepare financial statements. Filing is only required for companies that carry on activities within Costa Rica.

Companies must also keep records of member or shareholder meetings, member or director registries, and shareholder registries.

Noteworthy Service Providers

As always, this is not a recommendation.


Banking in general in Costa Rica is quite lackluster.

There are two types of banks: national (owned by the government) and private.

Government banks are backed by the government, which some perceive as making them more financially stable. They also have a far greater reach with virtually any and all cities, towns, and small villages having at least one of these banks physically present.

Private banks are smaller in outreach but are often part of international banks with more sophisticated services, greater English-language coverage, and being easier to open accounts with as a non-resident (natural person or company).

There is no deposit insurance for private banks.

Regulation and enforcement of the banking sector, securities market, and economic policies falls unto SUGEF (Superintendencia General de Entidades Financieras), SUGEVAL (Superintendencia General de Valores), and the Banco Central de Costa Rica. Interaction with these regulators is generally slow and much of the staff does not speak English.

Opening a bank account in Costa Rica is not as difficult as in Panama but can still be challenging.

Personal bank accounts for non-residents in Costa Rica are relatively easy to open, provided that you appear in person with the bank. It is extremely difficult to mention banks that accept non-resident account opening in Costa Rica. Having a local lawyer is usually beneficial and can in some cases even mean you don’t actually have to visit Costa Rica. The same bank can say no to you one day and yes the other.

Corporate bank accounts for Costa Rican entities are relatively easy to open. Most banks will consider your application even if the company is owned and operated outside of Costa Rica. Non-Costa Rican companies will have a much harder time unless it is for trade in Costa Rican. Panamanian and some other local companies are usually accepted, but subject to lots of scrutiny.

Once opened, expect the bank to ask questions for high amounts (high amount can start as low as 2,500 USD to 10,000 USD) initially and invoices for corporate transactions. However, once the bank has a good understanding of how you use your account and you stick to that, they will almost never bother you.

Fees are generally cheap except for international wire transfers which can be pricey. Private international banks are sometimes cheaper for this, at least for intra-bank transfers.

Banking Secrecy

Costa Rica enjoys a fairly tight banking secrecy.  While authorities are able to compel banks to disclose information and respond to EOI requests under TIEA/DTA, the scope is narrow and SUGEF routinely turns down requests.

While you cannot hide money in Costa Rica like you can in places like Lebanon and Vanuatu and with laws against severe crimes being enforced strictly, its banking secrecy is comparable to Panama – with the added bonus of being lower-profile.

Banks in Costa Rica

There are five state-owned banks:

The last two are banks created under special laws.

There are 12 private banks.

Costa Rica Online Gambling Company

So you still want to start an online gambling company and you have compared offshore igaming jurisdictions and decided on Costa Rica?

Congratulations, you are in for quite an adventure.

First of all – no, you cannot just form a Costa Rican company, stay in your comfy apartment in Europe, and legally run a gambling company. I know that might be what the friendly sales representative from that offshore service provider you spoke to said, but he or she is wrong.

To oversimplify – your gambling company is going to be resident wherever its management and operations take place, and or wherever the gambling services are offered from. No, renting servers in Panama or Latvia won’t be enough.

A Costa Rica gambling company is going to need a presence in Costa Rica, many opting to set up a small office to leverage the low cost of labour for things like customer service and IT infrastructure.

When it comes to a online gambling license, Costa Rica does not offer any. Online gambling is completely legal and unregulated. While the government has made some indications about possibly starting a licensing system, Costa Rica has hitherto not faced any significant international pressure for its laissez-faire attitude towards igaming. (The reaction from EU and EEA has instead been to put restrictions on gambling operators not licensed in the EU/EEA and a handful of approved jurisdictions.)

However, a type of license is required if you set up shop in Costa Rica. This is a simple business license and is very easy to obtain for just a few hundred dollars from whatever municipality your office is in.

Taxation is the same as for other companies: none on income accrued from outside of Costa Rica.

Living in Costa Rica

Quality of Life

It’s not for everyone but for those who like it, it’s fantastic.

Many last only a few months to a year in Costa Rica, around the second time they catch a large snake taking a nap on their balcony. Violent crime is a problem but it’s easily avoidable by taking precautions and using common sense.

While it is possible to survive on just English, learning Spanish is essential if you want to fully assimilate.

The population is often described as one of the friendliest in the world, and I am in full agreement.

Bureaucracy and interaction with institutions can be extremely drawn-out and tedious procedures.

The climate is warm and humid. There is stunning scenery around every corner once you are outside of San José or any other bigger city.

Infrastructure is second only to Panama in the region.


Resident in Costa Rica pay income tax on locally sourced income only, meaning that income from abroad is not in scope for tax.

There is generally no capital gains tax (except for certain transactions involving real estate or other special cases). Costa Rica does not have any capital duty, stamp duty, inheritance tax, or wealth tax. Sales tax stands at 13%.

Immigration and Residence

Many nationals are granted 90 days visa free entries as tourists.

Contrary to popular belief, permanent residence in Costa Rica is not as easy as Panama.

Retirees who can show an income of at least 600 USD per month can be granted permanent residence for retirement. Persons under this residency scheme can work in a limited capacity and may not compete with locals.

Excluding this, there are five types of residences in Costa Rica:

Pensionado: for pensioners (retirees) with an income of at least 1,000 USD per month but cannot work in Costa Rica, although they can receive income from foreign companies (which they may or may not own). The annual amount of 12,000 USD must be converted to Costa Rican colónes.

Rentista: for persons with an income of at least 2,500 USD per month. This income must be backed up with bank statements and/or bank letters which prove the stability of the income for at least 24 months. Cannot work in Costa Rica but can own and run companies. Income cannot come from work but should rather be from investments or other passive income.

Again, the minimum amount must be converted to Costa Rican colónes.

Inversionista: requires a deposit of 200,000 USD as investment, either in a government-approved fund or in a local company.

Representante: some company senior managers; must earn at least 25% of the Costa Rican minimum wage. Limited in scope, meaning not anyone can qualify.

Permanent: requires relation to Costa Rica either by marriage or bloodline. Free to work. Full list of requirements can be found on the Dirección de Migración y Extranjería de Costa Rica website (Spanish(.


Costa Rican citizenship can be acquired by residence or by marriage to a Costa Rican national. Marriages are often scrutinized by authorities, as it is often used for a way for criminals to evade extradition since Costa Rica does not extradite its own citizens.

Final words

I have heard Costa Rica described as the wild west in the jungle, and while that fails to account for the full spectrum of everything from the busy San José to the less so towns and villages in the mountains, it is pretty accurate.

Life in Costa Rica is never boring. It somehow manages be the most peaceful and then the most hectic place on earth.

For financial services, Costa Rica offers an alternative to Panama but without any clear advantages.

See also

15 Comments on "Jurisdiction Spotlight: Costa Rica"

  1. Hello,

    I’m in conversations with a white label casino firm based in Europe to launch an online casino and they requiere a B2C gaming license. They will provide everything to run the business, from servers and games to customer support. They told me a Costa Rica company it’s ok to run the business, but as you said in your post I cannot just form a CR company and legally run a gambling company from my country. What can I do in order to make it “legally”?

    Thank you.

    • Hello,

      If they are the ones providing the gambling services (taking the bets, hosting the games, taking the payment) then what you have is essentially a whitelabel. Those normally do not require a license. You might run into problems if you live in a particularly gambling-hostile jurisdiction (for example Turkey or Russia) but even gambling-skeptical jurisdictions tend to be OK with whitelabels being run from within their borders.

      Definitely check with a lawyer what your situation is like. You might not have to move anywhere.

      Now, as for Costa Rica – you would basically have to set up shop in Costa Rica, i.e. form the company there, run the day-to-day operations from there, rent an office space, and so on. Establish a presence and residence in Costa Rica. There are a couple of formalities you need to take care of, for which it may be wise to hire a local law firm.

      Good luck!


      • Hi!

        Thank you very much for your answer. Yes, they will provide a white label solution but we will receive the payments locally in the countries we will focus on. I’ve speaked with some CR lawyers and they said (for formality purposes) I just need to form a company in CR to run the site, because the online gaming business is legal there. No special licenses or presence in the country. That was very odd.

        Cheers 🙂

        • Your Costa Rican attorney is correct from a Costa Rican point of view. But you still have to worry about the local law where you live. White label solutions are a bit different than situations where you are the gambling operator yourself.

          Is it legal to run a gambling site where you live? What about white labels?

          It is to satisfy those laws that you might need to relocate to Costa Rica or elsewhere.

          • My country’s gaming law doesn’t consider online gaming, making it illegal. But there are many online operators (licensed in other countries, like Malta) who accepts local players and payments, using local payments processors.

  2. A couple of times in the blog you mention that corporate members are allowed in certain LLC/LLP setups. I’m trying to understand what is the benefit of using a simple setup like this one (it seems to be highly popular):

    1) You incorporate an LLC or LLP in a jurisdiction where it is tax transparent. For this you use two corporate members in your country of tax residence, let’s say two LTDs.
    2) The profits are passed to the LTDs tax free. If it wasn’t LTDs but natural persons they are supposed to pay income tax on them (social security as well maybe?). Aren’t the LTDs supposed to pay corporation tax on them? Or they can be declared as dividends from a foreign country? If it’s the latter I could understand why it’s highly beneficial but otherwise it doesn’t make sense to me to use corporate members.

    • A benefit in the case of UK LLP or US LLCs with public registries is that you wouldn’t have any natural persons appearing on public record.

      For tax, it’s much more complex and on a case-by-case basis. In the structure you present, there would probably be no tax advantages unless the LTDs are in zero-tax jurisdictions and are actually resident there.

      Sometimes, you might want to use a pass-through entity because it might be used to skirt dividends taxes or regulations or to enjoy tax deferral that may not be applicable to a pass-through entity. The pass-through entity passes its income to one or two stock companies which are owned by a holding company which is owned by the manager/partners of the LLC/LLP, enabling them to pay themselves only whatever funds they want/need and (in some jurisdictions, such as Estonia) not pay tax on undistributed profits.

      Now, let’s not forget about good old tax evasion. A UK LLP owned by two impenetrably (or almost impenetrably) secretive offshore companies makes for a very easy vehicle to dodge tax with while appearing superficially as a typical, reputable UK entity. The LLP owes no tax and its members are foreign entities, outside of HMRC jurisdiction. The weakness here would usually be the bank account but provided that it’s kept confidential enough, a structure like this can be strong enough to repel all but the most powerful and aggressive tax authorities.

  3. Thanks for this article. Congrats once again.
    As for gambling, you should discriminate online and “brick and mortar” gambling. Online gaming is unregulated in CR, but setting up an online gaming business in Costa Rica is mostly unseen there, most egambling related businesses there focusing on marketing, call centers… Authorities were at some point discussing the option to set up a tax per employee since most gambling business in CR are call centers servicing the US. Did not happened.
    If you want to open a “real” casino in costa rica, you should apply for a license between different authorities (ICT, municipality, health…) and build or have your own hotel. Only 1 slot allowed per operated room. And pay both a fixed and variable tax on GGR (gross gambling revenue).
    I fully agree with you on the bank system. It is good and bad at the same time. BAC is efficient if you have a good bank executive. Lafise is bad in term of service but offers an excellent Debit card in Euro, which is extremely rare on the continent.
    Costa RIca is more peaceful than anything else : una finca grande ” a big farm”. Spectacular landscape and great things to do ans dee if you like nature. San Jose as a capital is quite boring but the mix with a tropical life style brings something unique to a US or European citizen. Lots of american people live there btw
    The country is getting more dangerous than a few years back, but it is a “heaven” compared to Salvador, Guatemala Honduras and Mexico….

  4. Hi,
    Thanks so much for the blog. In your article about opening accounts you mentioned that some banks dont require proof of address. I am a traveling engineering consultant and am never in one place long enough to get a utility bill. Are there any banks that you know of that are lenient on this aspect?

    • This is very difficult to answer since policies and interpretation/enforcement of policies, too. The same bank may ask for different documents for different customers at different times.

      That said, banks are less likely to ask for proof of address when opening an account in person than when opening an account remotely.

      European banks rarely ask for proof of address when opening an account in person, but they may become suspicious if they send you a letter and it bounces.

      • Hi,
        Thanks for the answer. I would most likely visit the bank in person in all cases. I would just have to give an address of a friend or some relatives in Greece as the address. I just wouldnt have any document indicating that I am paying for utilities. Can you point me to some countries where I can go and have a good chance of opening an account with a personal visit?

        • Good chance depends on who you are, where your financial ties are, and how much money you are going to deposit. You’ll probably find yourself having to spend several hours emailing, chatting, and calling banks to find a bank.

          Opening an account in person in most of Europe (excluding Andorra, Monaco, and San Marino), I find it rare for banks to ask for a proof of address. The difficult part is finding a bank that will take you on. I have heard a lot about people going to Spain to open accounts recently. There has also been an increase of activity in Slovenia and Croatia.

          Banks in Hong Kong often don’t require a proof of address if you show up in person but that varies.

          The international banking wings of Lloyds, Barclays, and RBS (Gibraltar, Isle of Man, Jersey) are relatively easy-going as well. If I recall correctly, they only require a certified proof of identity.

  5. Your section on SRLs says you must have a registered address in Panama. Did you mean Panama, or should it be Costa Rica?

Leave a comment

Skip to toolbar