Costa Rica – Lifestyle hub with territorial taxation

Costa Rica is popular with remote workers and founders who want a high quality of life and a relaxed but stable environment. Setting up a company there can be attractive for online services, tourism-related projects, holding structures and regional support operations. The country offers political stability, good infrastructure, a bilingual workforce (Spanish/English), and a strong brand internationally as a safe, eco-friendly destination.

For digital nomads and freelancers who sell primarily outside Costa Rica, the territorial tax system is a big draw: only Costa Rican-source income is taxed, which can make planning simpler if most revenue comes from abroad. There are also Free Trade Zone and other incentive regimes that can grant significant corporate tax reductions or even temporary exemptions for qualifying export-oriented or tech companies.

• Tax snapshot:
• Standard corporate income tax is up to 30%, with lower progressive rates for small companies below certain revenue thresholds. Both companies and individuals are generally taxed only on Costa Rican-source income (foreign-sourced income is typically not taxed), and special regimes such as Free Trade Zones can reduce corporate tax to 0% for an initial period for eligible projects.

Non-resident founders

Costa Rica is very comfortable with foreign entrepreneurs: companies can have 100% foreign ownership and shareholders/directors can be residents or non-residents. An EU-based founder can set up an SRL or SA, appoint themselves as director, and operate the business remotely, as long as they keep a Costa Rican registered address and stay on top of local filings. Much of the process (articles of incorporation, powers of attorney, etc.) can be handled via local lawyers and notaries without the founder physically present.

Because Costa Rica uses a territorial tax system, the company is generally taxed only on Costa Rican-source income; foreign-source income is typically outside the local tax net. For your clients, that means they can live in the EU, have a Costa Rican company, and pay Costa Rican tax mainly on income tied to activities in Costa Rica – but their personal tax obligations will still depend on where they are tax-resident (usually their home/EU country).

TYPE OF COMPANY:

SRL (LLC Limited Liability Company):

Ideal for small businesses or startups with a flexible structure.

Simplified taxes, since the profits are declared in the owners' personal taxes.

REQUIRED DOCUMENTS:

Main Owner, Shareholders and/or Directors of the company:

To complete the company incorporation, the following documentation is required:

• Passport Copy : Copy of the passport of the director(s) and the company's shareholders.
• Proof of Address : Utility bill from your current country of residence (water, electricity or gas) or a bank statement showing the address in the name of the director(s), which is no more than 2 months old, as proof of address.