A Practical Guide to Choosing the Right Legal Structure in Costa Rica
If you are planning to set up a business in Costa Rica or structure investments in the country this year, one of the first key decisions is choosing the right legal structure. The two most common options are the Sociedad Anónima (S.A.) and the Sociedad de Responsabilidad Limitada (S.R.L.).
Both structures allow for the same types of business and commercial activities in Costa Rica. In practice, an S.R.L. is more commonly used, as it offers the same operational capabilities as an S.A., with a simpler and more efficient structure for many clients.
Similarities between S.A. and S.R.L.
These entities share the following key characteristics:
- Limited liability: The company’s assets are independent from those of its shareholders, members, directors, or managers—except in certain legal exceptions.
- Incorporation through a public deed granted before a Costa Rican Notary Public.
- Mandatory registered legal address in Costa Rica.
- Official email address required for receiving judicial and administrative notifications.
- Shareholders or quotaholders can be individuals or legal entities, either foreign or domestic.
- Confidential ownership of equity, unless disclosure is legally required.
Similar annual compliance obligations
- Payment of the annual legal entity tax
- Filing of the Ultimate Beneficial Owner (UBO) declaration
- Filing of inactive company declaration (if applicable)
- Legal corporate books issuance
Key Differences: S.A. vs S.R.L.
| Feature | Sociedad Anónima (S.A.) | Sociedad de Responsabilidad Limitada (S.R.L.) |
|---|---|---|
| U.S. Equivalent | Similar to a Corporation | Similar to an LLC |
| Administrative structure | Mandatory Board of Directors (min. 3 members) | One or multiple Managers |
| Legal representation | President holds universal power of attorney by law | Manager holds universal power of attorney by law |
| Auditor/Fiscal | Required by law | Not required |
| Capital currency | Colones or foreign currency | Only Costa Rican colones |
| Equity transfer | Shares transferable by endorsement | Quota transfers require approval by at least 75% |
Which structure is right for your business?
There is no absolute “better” structure—the right choice depends on:
- Business model
- Number of stakeholders
- Desired level of control
- Long-term business goals
In practice, the S.R.L. tends to be more efficient for simple, family-owned, or closely held structures, as it can perform the same commercial activities as an S.A., but with fewer formal requirements.
The S.A. remains advisable for more complex setups, with multiple investors, financing plans, or capital market involvement.
Author: Estefanía Brenes
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