What is the main source of law authorising this entity form?

Commercial Code, Law N. 3284.

Give a brief summary of the entity form:

Does the entity possess separate legal personality?

SRLs have separate legal personalities.

(Maximum) period of existence

There is no maximum period of existence.

Governing document(s)

The SRL's Social Pact is its principal governing document.

Liability of incorporators / shareholders

Responsible only for their contributions to the social or corporate capital.

(Governing) bodies

Managers.

Other particularities

Its capital stock can be issued only in national currency (colones).

Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions and divestitures, equity acquisitions, conversions etc.)?

Under Costa Rican law it is possible for SRLs to enter into legal mergers (whereby the Company ceases to exist by operation of law and its assets are acquired under universal succession of title) and mergers of all or a portion of its assets and liabilities (with universal succession of title to the relevant assets), and conversions (changing into another form of legal entity without ceasing to exist). [Note to Multilaw: this response does not specify whether an SRL can perform such transactions in the international context]

Can this type of entity be publicly listed or held, or its securities be issued to members of the public?

Yes, they can be listed or publicly held. Listed and public companies also have other specific requirements.

Can this type of entity be used for a non-profit or charitable organization?

No, other legal entities are used for non-profit or charitable objects such as a civil association or a non-governmental organisation.

Give a brief summary of the process of incorporation, formation, or organization, including:

Main documents required

Identification card of at least two (2) persons who will constitute the entity. Also, the Social Pact must be registered with the National Registry, specifically at the Mercantile Registry.

Involvement of notary, company register, governmental authorities

The Social Pact must be notarised by a Public Notary in a public deed; later, it is submitted to the National Registry for its corresponding registration.

Timing (estimate)

If it is submitted online, it may take two (2) days. If it is submitted "by paper" at the National Registry, it may take one (1) week. However, in special cases for both modalities could take up to 15 days.

Main costs, including registration and similar fees (excluding legal fees)

Approximately US$300.

Is a description of the anticipated business or purpose of the entity required for incorporation, formation or organization?

Yes, in the Social Pact the following must be indicated: Name of the persons constituting the entity, object and purpose, capital stock, domicile, specifications regarding legal representation, as well as regarding the General Assembly etc.

Minimum number of incorporators / shareholders and residency requirements

Two (2) individuals or artificial entities. They can be either a Costa Rica national or a foreigner. However, at the time of establishing the company, the incorporators must sign the Public Deed.

Minimum number of directors (or other applicable officers) and residency requirements

Managers. The SRL can be administered by one (1) manager or as many managers as the Quota Holders Assembly establishes.

Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

There is no minimum amount, usually it's a low amount, of 10,000 colones (around US$20). Only specific companies that deal with banking and insurance activities require a high minimum stock capital contribution.

Is the physical presence of incorporators/directors/shareholders required in the jurisdiction for incorporation, formation, or organisation?

Physical presence is not required when submitting the Public Deed to the National Registry. However, all incorporators must personally sign the Public Deed.

Is a tax identification number, or equivalent, required? If so, how is it obtained?

A tax identification number is given at the Ministry of Treasury. However, when the entity is registered it acquires a legal or corporate identification number which is called cédula jurídica.

What is the title of the applicable company registry?

Mercantile Registry of the National Registry of Costa Rica (Registro de Personas Jurídicas del Registro Nacional).

What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.:

The information listed below must be filed at the National Register by means of the Company's Social Pact and is publicly available:

• Articles of association.
• Date of incorporation.
• Name and address details.
• The activities of the SRL.
• Stock capital (issued and paid-up).
• Legal representatives of the SRL and their personal information.
• Constituting quota holders and their personal information (there must be at least two (2) initial quota holders).
• Information regarding insolvency, and liquidation of the SRL.
• The annual accounts.
• Information regarding the General Assembly and its meetings.

In Costa Rica, the National Registry does not disclose the quota holders of an SRL. A new bill regarding "ultimate beneficial ownership" entered into force, but this information must be submitted to the Central Bank of Costa Rica.

What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

The Managers (or Manager) represent the SRL and must carry out management duties in the interests of the SRL in accordance with the objects as provided in the articles of incorporation of the SRL.

How are the members of the executive body appointed, dismissed and replaced?

They are appointed initially in the Social Pact, meaning in the public deed of incorporation and thereafter by the general meeting of quota holders.

The General Assembly of quota holders can appoint and dismiss managers. These changes must first be registered in the Quota Holders' Assembly Book and later, registered with the National Registry.

Is it possible to appoint corporate directors or must all directors be natural persons?

Only the Quota Holders Assembly can appoint new directors. The managers can, however, grant powers of attorney if so indicated. The manager or managers have the legal representation of the SRL.

Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

In an SRL, there must always be manager or managers. In an SRL, this structure cannot be changed but other directors may be appointed by the Quota Holders' Assembly. Also, the legal representatives may grant powers of attorney (special, full etc.) if that power is authorised in the corporate bylaws.

What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

The General Assembly of Quota Holders includes all quota holders without regard to their percentage of ownership of the stock capital. The General Assembly appoints and dismisses the managers and can make any decisions with regards to the SRL. They can also grant powers of attorney.

What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

Yes, these can vary depending on the corporation's Social Pact or corporate bylaws. In the Public Deed all matters regarding the General Assembly are established, such as the quorum and majority requirements.

Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

No, there are no special regimes for an SRL, except for those companies that will perform financing, banking, and insurance activities, for which particular laws establish several additional requirements.

What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

After the end of the fiscal (financial) year, the SRL must submit a report to the Ministry of Treasury within three (3) months. Also, there must be an obligatory General Assembly Meeting in order to determine the financial position of the SRL.

Is the entity permitted to determine its own financial year?

In principle, all Costa Rican entities have a fiscal year from 1 January to 31 December. If the SRL is part of a foreign structure and if the headquarters abroad use a different fiscal year, the SRL may ask the Tax Authorities to change the SRL's fiscal year to be the same one as its headquarters.

Is the entity subject to any statutory (external) auditor obligations?

No.

Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

There are no requirements for these appointments. The SRL determines these matters based upon its actual operation.

What is the title designated for 'ownership interests' (e.g. shares, quota, interests, membership)?

Quotas (Cuotas).

Are different classes of ownership interests possible? If so, what are some examples of different classes?

In SRLs, you can only own quotas and there are no preferred quotas that will grant their owners special rights.

What documentation is required for the transfer of ownership interests?

Usually, the transfer of quotas is done through a sale and transfer of quotas contract between the parties. This transfer of quotas must be registered in the SRL's Quota Holders Registry Book. After this, a new quota certificate must be issued.

Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

The transfer must be inscribed in the Book of Registry of Quota Holders – which is a private record.

Are there any applicable stamp duties imposed when transferring ownership interests?

No.

How are shares issued? (including information on payment obligations, registration requirements)

All quotas are registered in the Quota Holders Registry Book and through quota certificates, which are provided to each owner. There are no further payment or registration obligations or requirements.

Further information on equity contributions, e.g., non-cash payments on shares, (share premium) contributions without issuances of shares, can partially paid shares/ownership interests be permitted and what are the restrictions on them?

There are no special requirements. Usually, the purchase of quotas is done via bank transfers.

Any requirements with respect to share cancellation, share repurchase and other capital reductions

It is uncommon for a SRL to reduce its capital stock.

Any requirements with respect to distributions to shareholders?

The Quota Holders' Assembly will decide on the distribution of dividends to the quota holders.

Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

Yes, if said agreement does not contravene the Social Pact.

Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

The SRL pays a yearly corporate tax. The amount of the tax depends on the yearly sales of the SRL. This corporate tax will be for an amount of between US$100 to US$400 per year, depending on the sales of the SRL. Also, there are other types of taxes that companies must pay if they have any economic activity such as sales and income tax.

What are the general corporate tax rates? (Specify if there is a national versus local distinction).

Companies pay tax at the rate of- Registered in the Legal Entities Registry of the National Registry, but not registered in the Single Tax Registry (RUT) with profit-making activity (Inactive Company), 15% rate on the base salary, tax to be paid: ¢69,330.

Taxpayers in the Income Tax (Simplified Tax Regime, Traditional Regime and/or Income and Capital Gains), with gross income less than 120 times the base salary*, in the declarations that they were required to submit in the previous period, 25% rate on the base salary, tax to be paid: ¢115,550.

Taxpayers in the Income Tax (Traditional Regime and/or Income and Capital Gains), with gross income between 120 and less than 280 times the base salary, in the declarations that they were required to submit in the previous period, 30% rate on the base salary, tax to be paid ¢138.660.

Taxpayers in the Income Tax (Traditional Regime and/or Income and Capital Gains), with gross income exceeding 280 times the base salary, in the declarations that they were required to submit in the previous period, 50% rate on the base salary, tax to be paid ¢231.100.

*Current base salary ¢462,200 (period 2024) *of yearly income;

Summary of any specific matters, e.g. recent or prospective major legal developments

The last major legal development was the pending law regarding the obligation of disclosing the ultimate beneficial owners of all Costa Rican companies to the Costa Rican Central Bank.