Accountant in Costa Rica: Why do you need an accountant for your business?

In Latin America, few countries are as promising for corporate investment as Costa Rica, with its rapid growth and exciting potential.

As Costa Rica's economy continues to grow despite the current unfavorable global economic conditions, it becomes an even more attractive market for your business to enter.

Before starting or moving your business to Costa Rica, it is important that you understand the local tax and accounting requirements.

In this article we will explain why you may need an accountant and details on tax advice in Costa Rica.

Why does a company need an accountant in Costa Rica?

Local expertise is essential for foreign investors to navigate the complexities of doing business in a new country.

Financial regulations in Costa Rica, for example, can be particularly complex and require months or even years to fully understand.

As a precaution against potential problems, it is strongly recommended to use the services of local specialists.

Here are the three most common legal entity (company) structures in Costa Rica:

1. The company/stock company (Sociedad Anónima – SA)
2. The Limited Liability Company (Sociedad de Responsabilidad Limitada – SRL)
3. The branches

SA is the most common legal entity structure in Costa Rica.

Read more HERE

In general, there are no restrictions preventing foreign investment in Costa Rica, except for mining and power generation.

However, there are specific ones local laws and tax requirements when registering a new company in Costa Rica.

According to Costa Rica's Commercial Code, every company must appoint a Fiscal, who acts as an internal auditor.

The Swedish Tax Agency can be a board member, but they do not have to have that position. The Swedish Tax Agency's primary responsibility is to monitor and protect shareholders' investments.

So there is a need for your company to have an appointed accountant in Costa Rica. It is also important to note that the Commercial Code requires that accounting records must be kept in Spanish.

What is the role of an accountant in Costa Rica?

Prior to 2011, there were no mandatory legal requirements to file audited financial statements for private companies.

Following an administrative rule issued by the tax authorities on August 31, 2011, companies classified as “large taxpayers” were required to submit audited financial statements prepared in accordance with IFRS within six months of the end of the accounting period.

However, in September 2012, a new law was passed giving tax authorities the power to require audited financial statements for all “large taxpayers”. As of the accounting period ending in 2012, the requirement for audited financial statements has thus changed from being an administrative rule to a legally substantiated requirement.

In order to fulfill the tax obligation, it is therefore now mandatory for “large taxpayers” to carry out audits of financial statements.

It is important to have an experienced accountant in Costa Rica to ensure that your company complies with the country's financial regulations.

What to look for in an accountant in Costa Rica:

When looking for an accountant in Costa Rica, there are certain factors to consider, including:

• Experience: Look for an accountant who has experience working with foreign investors and in your industry.

• Reputation: Check online reviews and feedback to gauge the quality of service you can expect.

• Language: Make sure the accountant you work with is fluent in a language you are comfortable communicating with.

• Communication: If you will be spending extended periods outside of Costa Rica, choose an attorney or firm that is adept at using online tools for easy management and reporting.

5 reasons to expand your business to Costa Rica

• Economic development
• Safe mode
• Booming tourism
• Educated workforce
• Clean energy leader

Let's look in more detail at why Costa Rica is such an attractive place to do business.

1 – Economic development

According to the Global Index of Prosperity, Costa Rica is the second most prosperous country in Latin America. The index highlights factors such as individual freedom, government policy and healthcare. Costa Rica's 2022 GDP grew 27 percent above official estimates. Costa Rica has free trade agreements with China, Mexico, Chile, Canada, Panama and the Dominican Republic.

2 – Safe place

Costa Rica is one of the safest places to live and travel to in Latin America. In a recent Gallup poll, Costa Rica was ranked seventh among the safest countries in the region and it was ranked second in LATAM by the Global Peace Index.

3 – Booming tourism

In a 2022 report highlighting countries there tourism has increased Costa Rica is the most post-pandemic, ranked third in the world. Its tourism grew by 74 percent in 2022 with nearly 2.35 million arrivals. The tourism industry is expected to grow by over 12 percent by 2027.

4 – Trained workforce

Primary and secondary education is free and compulsory in Costa Rica. This has led to a literacy rate of 98 percent. Costa Rican universities are well funded and professors from all over the world share their knowledge there. The government has invested heavily in technical skills training and start-up ecosystems. Costa Rica is now leading the way in software outsourcing in Latin America.

5 – Pure energy conductor

Costa Rica is a global leader in the installation and operation of renewable energy. 100 percent of the power generated within the country comes from five different renewable energy sources – hydropower, wind power, geothermal energy, biomass and solar energy. This means that there is always an access to affordable energy for the country.

Biz Latin Hub can provide you with an accountant in Costa Rica

Starting a business in Costa Rica requires the support of a qualified finance team from the start to ensure that your business complies with local laws and is well regarded by the authorities.

Without this, even a well-planned business can struggle to thrive. At Biz Latin Hub we have one team of locally based specialists who has a comprehensive understanding of the Costa Rican business environment, including its laws and complications.

We are well equipped to assist foreign companies wishing to conduct commercial activities in the region with all accounting, taxation, and financial issues.

If you are interested in learning more about Costa Rica's economy, the possibilities of starting a business there and need an accountant in Costa Rica, please Contact Us today.