As we evolve in order to provide you with the best service possible, so does our office. That is why we are pleased to inform you that we have evolved from BCE Law into Venture Legal, a boutique law firm that seeks to cater to your specific needs. We are welcoming you into our family and look forward to working together in order to reach your goals.
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Changes to Business Structures in Costa Rica
We would like to take the time to inform you that the Costa Rican government passed a new law called “Law to Improve the Fight Against Tax Fraud” and the General Tax Administration and Costa Rican Institute on Drugs published in the 78th Scope of “La Gaceta” on April 2019, the “Joint Resolution of General Scope for the Registration of Transparency and Final Beneficiaries”. The new law and resolution imposes new rules, it states that all legal entities or legal structures located in Costa Rica, trusts (except the public ones), authorized person of any Costa Rican corporation or foreign company, non-profit organizations and their branches, and Foreign subsidiaries of non-profit organizations, must provide the information of those final beneficiaries who have a substantive participation (corresponds to the holding of shares in a percentage equal to or greater than 15% of the participation regarding the total equity of the legal entity).
The legal entities that are obligated to comply with the disclosure requirements are:
- Costa Rican S.A. corporations (Sociedad Anónima) through the President of the company.
- Limited Liability Companies (Sociedad de Responsabilidad Limitada) through the Manager or Assistant Manager.
- General Partnerships (Sociedad en Nombre Colectivo) through the Administrator
- Limited Partnerships (Sociedad en Comandita) through the Manager
- Branches of foreign corporations in Costa Rica through the Legal Representative with the Power of Attorney
- Individual company with limited liability (Empresa Individual de Responsabilidad Limitada) through the Manager
- Civil law corporations (Sociedades Civiles) through Administrators
The legal representative of these listed companies has the legal obligation to file the declaration in the database created and managed by the Central Bank called Transparency and Final Beneficiaries Registry. The filling can only be done online at the web portal of the Central Bank known as Central Directo. That website is https://www.centraldirecto.fi.cr
It is important to highlight that the legal representatives of the legal entities must have a valid digital signature (Firma Digital) in order to do the filing. The digital signature card is issued by the Costa Rica Central Bank either directly or through authorized Costa Rican banks. However, the digital signature is only available for Costa Rican citizens or foreigners that have residency and a valid DIMEX card.
If the representative does not fulfill the criteria to obtain a digital signature card, you would have to consider the alternative to go to a Notary Public in order to grant a Power of Attorney to a third party of that has a digital signature card to complete the registration for you. The Power of Attorney must be granted to a physical person with sufficient authorization to do the filling. The law requires the Power of Attorney to be granted in the presence of a Notary Public in a public deed.
Under this scenario, you can choose the following options:
- You can grant a Power of Attorney to any Costa Rican person that you trust and has a valid digital signature in order to take care of this new obligation.
- If you don’t have any trusted person in Costa Rica, and you would like me to do the process, I could fill all the paperwork and I would sent you a proper quote.
- You can grant a proxy to a trusted person located in Costa Rica, and this person could go to Notary Public in order to grant a General Power based on article 1253 of Costa Rican Civil Code.
In the case that a legal entity is located abroad and this entity is a final beneficiary of a legal structure located in Costa Rica, article 10 of the Law to Improve the Fight Against Tax Fraud, establishes that the legal representative or authorized person must provide all the information of the totality of the shares that the corporation company has and it must also provide the identification of the beneficial owners, as well all the powers granted for the development of the activity in Costa Rica.
When it is impossible to identify the beneficial owners of the corporation company located abroad, the legal representative or authorized person must indicate the reason for which it cannot identify the participants of the share capital and the beneficial owners. This requirement should be done by affidavit, which will be available at the Transparency and Final Beneficiaries Registry.
In accordance with article 1 of the Joint Resolutions of General Scope for the Registration of Transparency and Final Beneficiaries, the legal entities must file their declarations based on their last digit of the Costa Rican entity’s tax ID number.
0 and 1 : September 2019
2 and 3: October 2019
4 and 5: November 2019
6 and 7: December 2019
8 and 9: January 2020
Regarding the filing date of the declarations, it is established:
- Ordinary declaration: once a year from April 1st to April 30th. Legal entities constituted after this date, must provide the information within 20 working days after completing their constitution in the National Registry.
- Extraordinary declaration: must be submitted within 15 working days counted from the date of the entry in the official book in which these data are recorded and it is noted that one of the owners of the shares equaled or exceeded 15% of the total of the shares.
Sanctions: If the legal representative does not fill the form on the due date, the Costa Rican Government would apply penalties to the company. The sanction is regulated under article 84 bis of the Code of Tax Rules and Procedures. In compliance with article 84 bis of the Code of Tax Rules and Procedures the corporation company will be considered as “Defaulter”. Additionally, a considerable economic sanction will be imposed.
Those who fail to provide the information may also risk being denied certifications of legal status or registration of documents from the National Registry (Registro Nacional), and it will also be officially recorded that they are in breach of the Law to Improve the Fight against Tax Fraud.
Should you have any questions please do not hesitate to contact us.