The Guide to Starting a Company in Costa Rica - Choose a Lawyer Carefully

When starting my company in Costa Rica, I found it strange that every second person I met had a cousin or brother who was a lawyer. It seems this is not rare in Costa Rica, and everyone is more than happy to introduce you to him or her. I made the terrible mistake of taking the first person who was introduced to me, all because he had a nice house and looked professional. In the end I should have shopped around. I was charged $500 USD for him to register our business. At the time I thought this was a steal, but I later found out it was highway robbery.

Our lawyer friend charged us the full amount and did not even take the time to fill out our legal books. We were told to copy a text by hand in the books ourselves and to make sure that we did not make any grammatical errors. On top of everything, he never printed off our shares, which I was not even aware were needed. And all of this I got from a friend!!!

In the end, this little mistake ended up costing us thousands of dollars in order to set all of our books and contracts straight a few years later. Even worst, we had to pay fines from the Costa Rican government for not having the correct forms filled out. This gave us a black eye and we are still trying to clean up our image in terms of the government.

In the end you should pay no more than $300 USD to have a corporation started in Costa Rica. You do not need any Costa Rican partners, as you and your foreign investors are all that is needed. Included in the fee should be your shares, which you should guard with your life as all it takes is a signature on the back of them for someone to claim that the shares were legally transferred to them.

For more tips on Costa Rica you can click here.

The Guide to Starting a Company in Costa Rica - Lesson 2 - Build a Great Team

The most important lesson I learned while starting a company in Costa Rica was that I needed to surround myself with the best team possible. This was actually something I screwed up during my first attempt at building a team. The first group that surrounded me was my Costa Rican partner and two other Canadians.

Of course when I pitched the idea, everyone was crazy about it. But when it came down to crunch time, and I moved to Costa Rica, and I needed everyone to start doing their share, no one was around to help. Sure a little project here and there, but no real commitment from anybody.

Eventually, one of the partners was asked to leave, and a new person took his place. My newest partner was definitely as motivated as myself after seeing the beauty of Costa Rica first hand while visiting La Cusinga Lodge and Punta Uva. From the moment he joined us the company finally started moving forward. His specialty was finances, and he brought our company some financial structure and organization, that allowed us to survive the extremely slow beginning of Exclusive X-cursions.

Therefore, we had our finance guy, our Costa Rica connection, and our sales person (myself), as well as a forth that really wasn't bringing anything to the table. In the end, he was let go (prior to any contracts being signed thank goodness), and was replaced by a computer specialist.

This must have been our best decision. I have no idea what we were thinking starting an Internet company without a computer genius to assist us along the way. At this moment, we had a complete team, and our first sale followed soon after. None of this would have been possible with the old team, and my company would have surely failed.

The lesson in all of this, is that you must ensure that everyone brings something different to the table when you start a company in Costa Rica. Too many of us had the same qualities, and this prevented our company from taking off in Costa Rica.

The Guide to Starting a Company in Costa Rica - The First Visit

When thinking about starting a company in Costa Rica, there is one fundamental thing that must be done before anything else. It may seem obvious to some, but not followed by all. Before coming down with your bags filled with cash ready to invest your money on a surefire way to make the big bucks, please visit Costa Rica first.
I have met numerous people who have made the big move to Costa Rica thinking this was the place for them, only to find out a few months later, or years, that Costa Rica really wasn’t for them.

Although visiting Costa Rica first isn’t a guarantee that things won’t go bad, it is a smart way to check out the culture and see if you can really see yourself living in Costa Rica for multiple years.

Since it takes 5 years usually to turn a profit with a new company, you will have to keep in mind that this will probably be the same for you. I moved here with the intention of blowing up after a year, and hard the harsh reality of making my first sale a year and a half after first moving in.

When you visit Costa Rica, try to get the tour by a local, and not your Gringo friend that absolutely loves Costa Rica. It is important that you get an honest view from the people who can get you the authentic experience. Also, try to visit small towns in Costa Rica as much as the larger ones. Whatever you do, try to avoid staying in Gringo rich communities such as Escazu, as these places are not an accurate portrait of Costa Rica.

My best advice for you before you move to Costa Rica to start your company is to visit first, and to do it with private transportation so you can shoot a bunch a questions to your driver without feeling like you are bothering everyone else in the van. This is the best way to get info on Costa Rica. After your trip, you will have a much better idea if this is the place for you.

Guide to Starting a Company in Costa Rica

Welcome to my online guide to starting a company in Costa Rica. Although this guide will be specific to Costa Rica, I am certain there are many lessons that can be applied to other third World Countries around the World.

Although I have been living here for many years, I do no guarantee that this information will be 100% accurate, but I can promise that it will be as close as possible to being 100% accurate. If you are going to start your own company in Costa Rica, please do your own research and ensure that you have all of the latest and most accurate information out there.

In my guide to starting a company in Costa Rica I will be making multiple weekly installments, with each post being separate from the next. You can expect to read honest opinions and hear real stories from someone who has actually gone through all the steps of starting a company. I will also try to throw the Costa Rican perspective in all of my posts.

This blog does not pertain to those with large funds to invest, as these people surely will have teams of people around them giving them all of the pointers needed regarding starting a business in Costa Rica. Rather, this guide will be geared towards those who are on a reasonable budget. I had $20 000 USD to invest in my company from the start and had to get everything done under that specific price range.

Bellow is a breakdown of all of the topics and issues that you will be able to follow in the coming weeks. I also invite everyone to leave comments and ask as many questions as they wish.

The Guide to Starting a Company in Costa Rica



The Guide to Starting a Company in Costa Rica - Lesson 1- The First Visit

The Guide to Starting a Company in Costa Rica - Lesson 2 - Build a Great Team

The Guide to Starting a Company in Costa Rica - Lesson 3 - Choose a good Costa Rican Lawyer

The Guide to Starting a Company in Costa Rica - Lesson 4 - Find a Designer

The Guide to Starting a Company in Costa Rica - Lesson 5 - Choose your Office

The Guide to Starting a Company in Costa Rica - Lesson 6 - Know the Law

The Guide to Starting a Company in Costa Rica - Lesson 7 - Accountants

The Guide to Starting a Company in Costa Rica - Lesson 8 - Employees

The Guide to Starting a Company in Costa Rica - Lesson 9 - Paying the Bills

The Guide to Starting a Company in Costa Rica - Lesson 8 - Tips

Registering a Business in Costa Rica

Registering a business in Costa Rica can prove to be quite the process if you try to do everything on your own. As a foreigner, I am allowed to start a business, but having a Tico partner definitely helps the process along. Rather than doing everything yourself, and having to wait in long lines, I suggest paying a Costa Rican lawyer to do it from the very start.


When I first moved to Costa Rica I was charged $500 for this process. The lawyer was very professional, however, did not even fill out our books. He still had us run around to get stamps and have us hand write the legal text in our legal books. Later on, we met better lawyers, and found out that the cost for these services should be no more than $200 USD, and the lawyer should fill all of the books out, not the client.

When we got our book, six in total, 3 for accounting and 3 for office use, we got the necessary stamps. Our lawyer than proceeded to create our company shares. This is the normal practice in Costa Rica. Since we were three owners at the beginning, we create thirty shares and divided them evenly amongst ourselves.

If there is ever anything you should guard with your life in Costa Rica, it is your company shares. All someone would have to do to pass legal ownership of your company over to them is forge your signature on the back stating that you have sold your company to them. From that moment on he would be the legal owner of your very company.

The entire process of registering a company in Costa Rica takes about 2 months. You have to be there in person in order to do this as well. Costa Rica in general makes it very easy to start a business and they encourage this in order to grow the domestic economy. You can look into all of this the next time you travel to Costa Rica.

The first meeting in Costa Rica

Things do not always happen as expected, and this was certainly the case upon my arrival to Costa Rica. My business partner who is Costa Rican was suppose to help me settle in my new country which he did just fine. After a few weeks of settling in, I figured it was time to set up some meetings.

We set up our first meeting with a Costa Rican transportation provider that was a good friend of my Costa Rican partner, Marco. Marco told me how his friend had been in the business for years and would be a great asset for our company. Well, he and his wife ended up making all sorts of proposals right out of the first meeting, offering to help us with whatever we would need. He gave us important phone numbers and contacts.

They seemed very kind and sincere and we accepted their help with all sorts of projects. They assisted us in getting prices from various hotel providers and activity providers in Costa Rica. These hotel rates, we would find out later were inflated to leave some room for their commissions that they were to collect from these providers. They even introduced us to our first lawyer and we ended up registering everything through him, which we later regretted. This will be explained in the next post.

In the end, our first meeting would set us back a year without us having any idea. We would eventually have to cut our ties with Marco’s friend and have to get a new contract signed with our current lawyer and have our books completely redone. This was a huge headache and I wish I would have taken my time to look around at other options.

The problem is arriving to a Country where you do not speak the language leaves you susceptible to being used and manipulated. These errors would not have transpired in Canada. Costa Rican law is one that can sometimes be bent, and many Costa Ricans look for ways to make a dollar any way they can. Anyone who wants to start a business in Costa Rica should be very careful prior to doing so.

Homestays

Doing a Homestay, although not of the traditional type where you stay with a random family, was probably my best decision to getting off the ground. Staying with a family in Costa Rica was extremely helpful in terms of learning the language and culture. I wanted to know the culture and ensure that I could go on living in Costa Rica without offending anyone of becoming just another Gringo. Living with my wonderful family I learned about their political views, opinions about people from where I come from, as well as religion, which is a subject that must be greatly respected in this country. Saying grace, and prayer are vital for those wanting to fit in with a typical family. This was new to me, and took a while to get used to, but in the end became one of the customs that I liked most about Costa Ricans.