New Corporation Law

BT68 Corportate Law Rod Tiger Martin neu

by Rod (Tigre) Martin

As of September 1st, significant corporate changes go into effect for SA and SRL corporations, among others. The President, Manager, or anyone with a general power of attorney has to report shareholders with 15% of a corporation to the Costa Rican government. The term for each corporation depends on the last number of corporate ID (cédula jurídica). September is for corporations ending in 0-1, October for those ending in 2-3, and continuing each month until January of 2020.

Here's where it gets complicated: to make the report, you need a digital signature certificate. Most foreigners do not fit the criteria for obtaining a digital signature (e.g., permanent resident, computer savvy, high Spanish reading comprehension). So the owners of the corporation will need to grant their lawyer an extraordinary power of attorney to do the reporting. This report needs to be filed yearly and whenever the ownership of shares changes. Recently, a long-time resident suggested "just transfer the property or car out of your corporation into your name"; however, it is not that simple. If you transfer the asset, you will be required to pay the transfer tax, stamps, and Notary fees. In some cases, this equates to thousands of dollars.

I spoke with Kristi Penland of Uvita Law Firm who offered the following advice, "Locate your corporate books and make an appointment with your lawyer. If you have plans to make changes in ownership in your corporation, it may be beneficial to do it before presenting it this first time. By this means, you avoid having to do it again when you make the change." She continued, "If you don't live in Costa Rica, you will need to appoint someone in the country to handle the representation of your assets. Otherwise, you may end up having to go to the Costa Rican consulate abroad every time you need something done with your assets in Costa Rica." 

Failure to comply with these new corporate requirements will lead to potential problems. Such as fines by the tax authority and corporate documents (e.g., personerias) will not be certified. I encourage you to take care of it at your earliest convenience.

 

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