Costa Rica Offshore Corporation
Best Offshore Corporation Structure in Latin America
Have you ever given some thought to forming your own offshore structure or IBC
(International Business Corporation)? Don't know where to start, much less how to go about it? Why would you want an offshore
In this article, Lee Harrison sheds some light on those and other questions you
might have, giving you a place to start, especially if you live in North America. Although, having an offshore
corporation is a useful vehicle for managing your business and financial affairs no matter where you might
|Costa Rica Corporation is amongst the best offshore structures in the world. Further
business and investment advantages can be gained through its neighbouring country of
San José, Costa Rica
The airport in San José has changed remarkably since my last visit. Gone is the
mayhem at the rustic airport with shouting vendors, and taxi drivers swarming all over to get your attention. The
clean, modern facility in San José is now second to none that I've seen, and the fleet of brand-new taxis -- with
their drivers dressed in white shirts and ties -- will speed you though the 30-minute ride downtown for less than
There's more to Costa
Rica than rainforests, beaches, mountains, and canopy tours. This trip,
I'm visiting Costa Rica to tend to some business with respect to my Costa Rican offshore corporation.
Why might you need an offshore
Well, there are many different reasons, but I'll outline here the most important
The first improtant reason is privacy, for one. Countries that have secrecy laws protect
the identities of those who own private corporations -- this can keep prying eyes from your business and
2. Inheritance Laws
You also need to consider inheritance laws if you buy real estate
overseas. Some countries have strict laws that dictate who gets your assets when you pass away. But the assets of a
corporation can often be transferred independently of these laws, allowing you to leave your property to whoever
3. Tax and Financial
Plus, there can be tax and
financial advantages. Depending on the laws in your country of
citizenship and in the countries where you do business -- such as how corporations are taxed on income,
inheritance, and capital gains relative to private individuals -- it may be to your tax advantage to conduct
business via a private corporation.
Costa Rica Offshore Corporation
But why Costa Rica? Other than providing an excuse to visit here once in a while,
there are a few things that appealed to me about setting up a corporation here:
» It's easy to set up
I set up everything via e-mail in a matter of weeks, including the registration of
the corporation, creation of the by-laws, naming of the officers and shareholders, and the creation of the required
» Real Estate advantage
A corporation in Costa Rica can legally own real estate outside of the country, so
I can use my corporation for property transactions far and wide. Use caution here however, and check with an
attorney in the country where you're buying the property to make sure that there are no adverse tax or legal
consequences on that end. In Ecuador, for example, there is no problem buying property via a foreign corporation,
while in Honduras, it's prohibited.
» Tax advantage
The tax situation also worked well for me, since Costa Rican corporations only pay
tax on Costa Rica-sourced income. This, when combined with the tax laws of some other countries, can be an
advantage. Also, I find the corporate privacy laws in Costa Rica well-suited to my needs.
» Low set up cost
You can have the whole thing set up "turnkey" for $900. By comparison, I was
quoted $3,500 in the Cayman Islands, and $2,000 in Honduras for setting up a similar structure. (My additional
expenses are currently: $100 per year for my resident agent -- required by Costa Rican law; and $100 to have my tax
return prepared and filed -- if the corporation were generating income in Costa Rica, this would be
|Costa Rica is known for its natural splendor - and its
offshore business. Find out more in the International Living
Choose a recommended attorney
Costa Rican law doesn't permit attorneys to advertise, so it's difficult to
"window shop" in the San José papers or the Internet. When choosing an attorney in Costa Rica, be sure to get a
recommendation from a trusted source.
I recommend attorney Carlos Umana (e-mail: email@example.com) of Tacsan y Umana in San José.
Everyone on his knowledgeable staff speaks excellent English, and they've been helpful and reliable. I've used this
firm for almost 10 years, and continue to be satisfied.
If you plan to set up an offshore corporation, you'll need to choose the country
in which it's located in accordance with your personal needs, tax situation, and in-country legal requirements. But
once you've checked all those boxes, you may find that Costa Rica is the best choice for you, too.
Finally, a caveat: for U.S. persons (citizens and resident aliens), there can be
serious and costly tax implications in creating and operating an offshore IBC. Check with your tax expert before
Roving Latin America Editor, International
P.S. If you'd like to try a down-home Italian restaurant for lunch or dinner while
in Costa Rica, try Mama's Place on Avenida Segunda near Calle Central. An excellent gnocchi dinner with garlic
bread, wine, dessert, and cappuccino set me back a mere $8.70.
NOTE: All above quoted prices and
contact information were correct at the time of writing this article in 2006. Please get updated quotes before
proceeding with your offshore structure plans.