PostHeaderIcon 10 Reasons to Incorporate in Costa Rica

In a nutshell, here are ten highlighted reasons for incorporating an offshore company in Costa Rica:

Favorable Fiscal Regime

Taxation on a territorial basis: In most offshore havens, the key factor for applying taxes is residency in that most offshore companies do not operate and are not domiciled within the jurisdiction where they are incorporated. This is a bit different in Costa Rica for whilst there are many Costa Rica companies domiciled overseas, Costa Rica encourages offshore companies to setup offices and production sites on Costa Rican soil. Taxation in Costa Rica on legal and natural persons is thus applied on a territorial basis depending on where income is derived. There are no designated offshore corporate structures; instead, a Costa Rica company may opt to supply its products locally, or solely to foreign markets, that is, to conduct offshore business as an offshore company.

Competitive Legislation

Competitive legislation in Costa Rica is closely linked to the country’s tax structure, business and investment climate since Costa Rica’s very advanced and mature legislative framework is the basis on which taxation and corporation laws are founded.

1. Free Trade Zones

Free Trade Zones are closely related to the former highlight on Costa Rica’s favorable fiscal regime. Costa Rica offshore companies which trade soles with foreign markets to which their goods are exported are usually housed in free trade zones or industrial parks. Costa Rica’s legislation for free trade zones are subject to international treaties and provide the following incentives:

* No sales tax

* No excise tax

* No capital gains tax

* No export tax

* No import duties in capital goods and raw materials

* Option to provide goods and services to local residence in accordance with legal requirements

* Option to trade with other Costa Rican exporters

* On-site customs clearance facilities

2. Efficient Incorporation Process

Authorized corporate service providers help ensure successful incorporation. Agents help facilitate registered office and agent services which all Costa Rica companies are required to have. Agents which offer business establishement, comparable to Dominica company formation, services serve as the intermediary between the relevant authorities with which Costa Rica offshore companies must be registered and facilitate the filing of documents with the public registry for incorporation purposes and filing of tax forms after incorporation.

3. Political and Social Stability

Increasing improvements in Costa Rica economic welfare has in many ways helped secure social stability. According to surveys carried out to measure violence and political instability in Latin America, Costa was ranked amongst the top countries for the least incidence of violence and the most political stability.

4. Workforce

Literacy rates in Costa Rica are rated as one of the highest in the Americas. The labour force is calculated to be roughly 2.05 million. Out of a total population of 4.5 million, nearly half of the people fall between the 15 and 40 years of age. According to 2008 estimates, unemployment is calculated at 6%.

5. Economic Development

Whist the past decade represented one of steady growth for Costa Rica, positive developments continue to be seen in the areas of medical technology, technological services, tourism, manufacturing and other activities generated income of USD304.6 million and created new jobs amounting to 5,730.

San Jose, January 20,2010 – The Costa Rican Investment Promotion Agency (CINDE), indicated that 29 new foreign investment projects that arrived in the country in the high technology services sector, medical devices and advanced manufacturing, in conjunction with the companies already installed, generated 5,730 new jobs and US $304.6 million during 2009.

6. Strategic Location and Modern Infrastructure

With strategic location comes modernized infrastructure. Costa Rica has a centralized location with Panama and Nicaragua on its borders. Costa Rica has two international airports, over thirty smaller regional airports and two international sea ports. Telecommunications services are advanced, the water supply is abundant – supplying over 350 000 gallons to industrial sites on a daily basis, remarkable progress has been accomplished in renewable geothermal, wind and hydro energy for electricity production.

Two major international airports (Juan Santamaria International Airport and Daniel Oduber International Airport) and more than 30 regional airports; two major international ports: Caldera (Pacific Ocean) and Moin (Caribbean Sea). Seven customs offices for

7. Favorable Trade Policy

Trade liberalization in Costa Rica has been the backbone for economic diversification and development. Free trade agreements were signed CAFTA, CARICOM, Canada, Mexico, Panama and the Dominican Republic, while preferential access to markets was achieved under arrangements with Asia, the Caribbean Basin Initiative signed with the U.S. and European Union Generalized Preferential Tariff System. Trade agreements with major economies such as China and Singapore are in the pipeline.

In 2008, goods exported under free trade agreements accounted for 80% of Costa Rica’s gross domestic product.

8. Friendly Business Climate

To conclude, a pool of young and educated professionals, beneficial trade policies, modernized infrastructure, political, economic and social stability and a forward looking legislative framework are cause to describe Costa Rica’s business climate as progressive and investor friendly; a wonderful option for incorporating offshore.