Open a Foundation in Costa Rica

There are two ways to open a foundation in Costa Rica – by registering a non-profit organization (NGOs) and by setting up an association. The main difference between them is the purpose of creation, as such, you can choose the desired form based on this aspect.

Below, our agents for setting up a Costa Rican company explain the process to register a foundation. We can assist with the establishment and ensure all compliance regulations are met.

Registration of foundations in Costa Rica

All types of foundations must be registered with the National Register of Legal Entities in Costa Rica. This way, they will obtain a legal status. After that, they will usually complete similar steps to those when opening a company in Costa Rica, namely:

• obtain a tax identification code;
• opening a Costa Rican bank account.

Additionally, Costa Rican foundations can also register with the General Superintendency of Financial Entities (SUGEF) for anti-money laundering regulations.

Our local advisors are at your service for support with registering a foundation in Costa Rica.

Associations and NGOs in Costa Rica

Here are the main differences between the two forms of foundations in Costa Rica:

• the association is created with the purpose of fulfilling a social objective;
• the NGO is established for charitable, educational, or other purposes that contribute to the benefit of a community or the society;
• the association must have at least 10 members, while the NGO must have at least one founder.

In the case of foundations created as NGOs, the founder can be a natural person or a company. Our local consultants can assist with the registration of both types of entities.

The Articles of Association of a foundation

The main document required to open a foundation in Costa Rica is the Articles of Association. When created as an NGO, it must contain the following information:

• details about the founder;
• the name of the foundation;
• the Costa Rican address;
• the assets of the foundation;
• the way of appointing directors;
• how the administration of the foundation will be made;
• details about the supervisory body.

When established as an association, the formation deed must also provide information about:

• the purpose(s) and means to obtain it or them;
• how members can participate and exit the association;
• the right and duties of the members;
• the conditions and procedure of dissolving the association.

Also, associations are required to hold annual meetings of the members.

Our company registration consultants in Costa Rica can assist with the preparation of the founding documents.

Taxation of foundations in Costa Rica

From a taxation point of view, foundations are exempt from paying taxes in Costa Rica. However, if carrying out activities that may be subject to certain taxes, such as the VAT, certain compliance requirements must be respected. From this point of view, our accountants in Costa Rica can offer information and support.

Compliance requirements for foundations

Recent changes in the legislation require Costa Rican foundations to respect a few important compliance requirements. They refer to filing a Transparency and Final Beneficiary Registry (RTBF) declaration with the Central Bank.

The declaration must contain information about the:

• directors;
• board members;
• donors that have contributed at least the base salary of the respective year;
• beneficiaries;
• details about income and expenses.

How long does it take to register a foundation in Costa Rica?

Here is how long it takes to register the available types of foundations:

• NGOs are incorporated in about 3 to 4 weeks;
• associations can be registered in about 20 days;
• about 30 days to have the accounting books legalized by the tax department.

If you want to open a foundation in Costa Rica and need support, please contact us.