Starting a business in
🇨🇷Costa Rica
Checked November 4, 2026 · How we score
Corporate tax
30%
Top income tax
25%
Setup from
$1,500
all-in, first year
Time to form
14 days
can be done remotely
Taxes in Costa Rica
| Corporate income tax | 30% Progressive 5%–30% on Costa Rican-source income; small companies with gross income below roughly CRC 120M pay 5%–20%, larger ones 30%. Free Trade Zone (Régimen de Zona Franca) companies pay 0% for the first years and then 6%–15% on qualifying export and services activity. Foreign-source income is generally outside the tax base, though 2019 reforms tax passive foreign income received by residents (dividends/interest) at 5%–15%. |
|---|---|
| Personal income tax (top) | 25% Salaried income is taxed progressively up to 25% (brackets reset annually). Self-employed rates reach 25%. Foreign-source active income is not taxed; passive foreign income (interest, dividends, royalties) is taxed at 5%–15% since 2019. |
| Tax system | Territorial (foreign income untaxed) |
| Capital gains tax | 15%15% on gains from the sale of capital assets such as real estate or shares in Costa Rican companies; foreign-source gains are generally outside scope. |
| Dividend withholding (non-residents) | 15% |
| VAT / GST | 13% |
| Social security | IVA 13% standard (1%–4% reduced for basics). Employer social security (CCSS) is about 26%–27% of payroll plus employee ~10.7%. Corporations pay an annual legal entity tax (about CRC 150,000–CRC 600,000). |
Forming a company in Costa Rica
| Usual entity | S.A. (Sociedad Anónima) or S.R.L. (Sociedad de Responsabilidad Limitada) |
|---|---|
| Minimum capital | None |
| Setup cost (all-in) | $1,500–$3,500 |
| Annual running cost | $1,000–$3,000 |
| Time to incorporate | 14 days |
| Form remotely as a foreigner | Yes |
| Local director required | No |
| Local address required | Yes |
| Owners on public register | No |
| Statutory audit for small companies | No |
| Business banking for non-residents | Hard |
Residency and visas
Law 10.008 grants a 1-year renewable stay to remote workers earning US$3,000/month (US$4,000 with family) and exempts imported equipment from duty and foreign income from local tax. Permanent routes include Rentista (about US$2,500/month for 24 months) and Investor (US$150,000 in qualifying assets). Fees are modest, but processing can take months.
| Digital nomad visa | Digital Nomad Law (Law 10.008) – Remote Worker / International Services Provider, $3,000/month income |
|---|---|
| Golden visa | Yes, from $150k |
| Ease of residency for founders | 2/5 (1 = easiest) |
Special tax regimes
Territorial taxation
Only Costa Rican-source income is taxed. Passive foreign income received by residents (dividends, interest) is subject to 5%–15% since 2019.
Free Trade Zone regime
Qualifying export and services companies get 0% income tax for the first years, a reduced rate afterwards, and exemptions on withholding and duties, subject to jobs and investment minimums.
Digital Nomad Law (Law 10.008)
Remote workers earning at least US$3,000/month can live in Costa Rica for one year (renewable) and enjoy exemption from local income tax on foreign income, plus duty-free equipment import.
Pros and cons
Why founders pick Costa Rica
- Territorial system with a dedicated nomad law
- Stable democracy and strong rule of law in Latin America
- Free Trade Zone offers low tax for export services
- Large English-speaking, tech-ready talent pool
Watch out for
- Employer social security is about 26%–27% of payroll
- Banking for foreign-owned companies requires heavy KYC
- Passive foreign income of residents is taxed at 5%–15%
- Bureaucracy is slow and Spanish documentation is expected
Best for: Remote workers who want a stable, democratic base with territorial tax · Export services and tech companies in the Free Trade Zone · Founders who value quality of life and a skilled bilingual workforce
Costa Rica: common questions
Is Costa Rica a territorial tax system?
Yes. Costa Rica taxes income from Costa Rican sources, so profits earned from clients abroad by an active business are generally not taxed. Since July 2019, passive foreign income received by residents, such as dividends and interest, is taxed at 5%–15%.
What is the Costa Rica digital nomad visa?
Law 10.008 lets remote workers and international service providers live in Costa Rica for one year, renewable for another, if they earn at least US$3,000 per month (US$4,000 with family). Foreign income is not taxed locally, and you can import personal equipment duty-free.
What is the corporate tax rate in Costa Rica?
It is progressive: 5%–20% for small companies with gross income below roughly CRC 120M and 30% for larger ones, applied only to Costa Rican-source income. Free Trade Zone companies pay 0% in early years and a reduced rate afterwards.
How much does it cost to set up a company in Costa Rica?
A Costa Rican S.A. or S.R.L. typically costs about $1,500–$3,500 including notary fees, registration and the beneficial-ownership filing, then $1,000–$3,000 annually including accounting and the legal entity tax. A Costa Rican notary public is required.
Can I get residency by investing in Costa Rica?
Yes. The Investor residency requires US$150,000 in qualifying investment (real estate, business or similar), and the Rentista route requires showing US$2,500 monthly income for 24 months. Neither route grants citizenship; naturalization takes 7 years of legal residence.
Sources
- Ministerio de Hacienda de Costa Rica
- Dirección General de Migración y ExtranjerÃa
- PwC Worldwide Tax Summaries: Costa Rica
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.