We at Carter Law know that proper legal representation is critical anywhere, San Jose. Santa Ana. Find a Law Firm:. Need a Lawyer? BDS Asesores.
Law Firm's Overview. AG Legal. Law Firm's Overview Credit Cards. Pragma Legal. Fragomen Worldwide. Niehaus Abogados Immigration Lawyers in San Jose, Costa Rica Niehaus Abogados is located in San Jose, Costa Rica and offers preventive legal advice and litigation management in a variety of practice areas including: administrative and constitutional law, environmental law, banking, real estate and condominium law, labor, immigration, commercial law, Share capital There is no maximum or minimum share capital regarding an S.
However, S. Non-cash consideration Shares can be issued for non-cash consideration as long as the shareholders determine the value given to the specific contribution. Rights attaching to shares Restrictions on rights attaching to shares.
There can be restrictions to the rights of each class of shares, as provided in the company's Articles of Incorporation. Voting rights of shares can be restricted, except for common shares. Automatic rights attaching to shares. The law provides certain rights such as voting rights and the right to request information about the company. In relation to the most common form of corporate business vehicle used by foreign companies in your jurisdiction, outline the management structure and key liability issues.
Management structure In a S. The shareholders can appoint as many managers as they consider necessary and they can limit each manager's powers. The S. Management restrictions There are no management restrictions. Directors' and officers' liability It is common that officers and managers are the same persons, and as such, directors tend to execute managing functions.
Directors must observe the law and the company's Articles of Incorporation, and any breach can lead to liability regarding the damages caused by such breach. Parent company liability Under the S. This is not the case for branches, where the principal is liable for the acts executed by the branch.
Employment Laws, contracts and permits. What are the main laws regulating employment relationships? The main body of law regulating employment relationships is the Labour Code. The Code applies to any employment relationship that is executed in Costa Rica.
As such, local law may apply to foreign employees under an employment relationship in Costa Rica. It does not apply to Costa Rican employees working abroad unless the employment relationship is established in Costa Rica and the work executed abroad is not considered occasional an exception and not the rule.
The rights conferred to employees under the Labour Code cannot be renounced for example, severance payments and vacation time.
Is a written contract of employment required? If so, what main terms must be included in it? The employment agreement does not necessarily have to be written. However, a written agreement is strongly recommended. The main terms of the employment agreement are as follows:. Name of the parties. Clear description of the employee's responsibilities. There is a substance over form principle which governs employment relationships. According to this principle, the employment conditions which operate in practice prevail over those provided in the agreement.
Foreign employees do require a special work permit or a temporary residency, depending on the scope of the work and duration that they will reside in Costa Rica. The process to obtain the permit can take between six months and one year. However, once the application for the permit has been submitted and its resolution is pending, the employee is authorised to start working.
The Immigration Direction offers a company registration process for specific companies that regularly need to obtain this type of permit for its employees. Once completed, it provides a simpler and quicker way to obtain temporary work and residency permits for the company's employees. Termination and redundancy. Employees are not entitled to management representation or to be consulted in relation to corporate transactions.
They can be consulted but doing so is not compulsory. How is the termination of individual employment contracts regulated? The employer can terminate an employee at will, with or without notice or just cause, as long as the dismissal is not discriminatory. However, the employer will have to pay the applicable labour rights of the employee. The Labour Code does make a difference between justified and unjustified dismissals.
There are different causes that enable an employer to execute a justified dismissal including Article 81, Labour Code :. Immoral behaviour. Breach of the conditions established in the agreement. Generally, when the employer executes a dismissal, the employee may be compensated with the following:. Severance pay. This is calculated according to the length of the employment relationship as provided in the Labour Code. Advanced notice. The length of this term is established in the Labour Code according to the length of the employment relationship.
The employer can decide whether to keep the employee during the said term, or to provide the corresponding compensation applicable salary for the said term. This includes any vacation days which the employee is entitled to use. Christmas bonus Aguinaldo. This is proportional to the number of months of that specific year which the employee has worked.
When a justified dismissal is executed, the employee loses their rights to receive a minimum advanced notice period or severance payment. The recently enforced Procedural Labour Reform, established new procedures which must be observed by the employer when executing a dismissal.
There are special procedures which need to be observed in certain special circumstances, for example the dismissal of pregnant employees. Are redundancies and mass layoffs regulated?
Redundancies and mass layoffs are not regulated. Tax Taxes on employment. In what circumstances is an employee taxed in your jurisdiction and what criteria are used? The criteria to determine whether the employee is taxed in Costa Rica or not, is if the services are provided or executed in Costa Rica.
Services which are not provided in Costa Rica, are not subject to tax. In other words, if the employment relationship is deemed to be based in Costa Rica and subject to the Costa Rican law, the employee should be taxed.
What income tax and social security contributions must be paid by the employee and the employer during the employment relationship? Tax resident employees A tax resident employee is subject to income tax and social security contributions at the following rates:.
Non-tax resident employees Non-tax resident employees are not subject to payments for social contributions. Employers Employers must make a social security contribution of Business vehicles.
When is a business vehicle subject to tax in your jurisdiction? Tax resident business Tax is applied on a territorial basis. The income that a company generates as a result of activities executed in Costa Rica is subject to tax in Costa Rica, regardless of the nationality or country of incorporation of such company. However, the income that a local company or a Costa Rican citizen generates from its activities that are not based in Costa Rica is not subject to taxation in Costa Rica.
Non-tax resident business Non-tax residents may be subject to taxation in Costa Rica when they have a permanent establishment in Costa Rica. They may also be taxed when their income comes from an activity executed in Costa Rica Costa Rican source.
This last scenario may be taxed through withholding tax to remittances. What are the main taxes that potentially apply to a business vehicle subject to tax in your jurisdiction including tax rates? Business vehicles are taxed on their Costa Rican source income. The main taxes that apply to these business vehicles are as follows:. Corporate tax. The tax is applied to any S.
This tax is paid annually, and the due date is 1 January of each year. Income tax. The fiscal period is from 1 October until 30 September. However, under certain circumstances, companies can apply for a special fiscal period for example 1 January to 31 December.
The tax returns must be filed within two and a half months following the end of the fiscal period. Sales tax. Sales tax is paid once every month, within the first 15 days of that month. Municipal taxes. Politically and geographically, Costa Rica is divided into cantons. Each canton is governed by a local municipality. This does not represent a federal system, but each municipality has some regulatory powers over its territory and it is entitled to certain taxes, for example:.
Dividends, interest and IP royalties. How are the following taxed:. Dividends paid to foreign corporate shareholders? From its inception, Civil and family attorney in Costa Rica. An expert in procedure law, real estate law, commercial, and civil law. If you have business in Costa Rica, then you should call me. Contributing to the various companies, individuals and national and international, to provide consulting services in the legal field, particularly in its management area, allowing them to achieve their goals and successfully conclude their business and complex situations that present themselves.
Permanent training and assessments allow us to be updated in different areas and offer unbeatable service. Since , we provide comprehensive legal counsel services Registered in the National Registry of Costa Rica, Number: , as a corporation providing legal, consulting and advisory services At my practice your are not just another client.
I seek to help you solve your legal situations, giving you timely and adequate legal adivce as your counselor, and also, as a friend. Litigating and practicing Law since ; Specializing in corporate, commercial, and business law; Has litigated in all fields of Law, including civil, commercial, insurance, banking, finance, government and criminal laws; naturalization procedures and immigration law expert.
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