Costa Rica corporate tax - guide for international expansion

Are you considering expanding your business operations to Costa Rica? Understanding the country's corporate tax landscape is essential for making informed decisions about your international business strategy.

Costa Rica offers a stable business environment in Central America, with a democratic government and strong commitment to economic development. However, navigating the corporate tax requirements requires careful attention to local regulations and compliance procedures. Whether you're establishing a new subsidiary or expanding existing operations, having a clear grasp of your tax obligations will help ensure smooth business operations. Wise Business can help streamline your international payments and currency management as you establish your presence in this vibrant Central American market.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Costa Rica Corporate tax rate in 2026

Costa Rica maintains a corporate income tax rate of 30% for most businesses, which is above the OECD average of 23.9% but remains competitive within the Central American region.¹

The corporate income tax in Costa Rica applies to both resident and non-resident companies on their Costa Rican-sourced income. The Costa Rican tax system is based on the principle of territoriality, meaning that only income considered to be of Costa Rican source is subject to taxation. This includes income generated exclusively in the national territory from services rendered, goods located, capital invested, and rights used in Costa Rica.¹

Costa Rica also offers special rates for small companies whose gross income does not exceed 119,629,000 Costa Rican colones (CRC). For this category, progressive rates apply: 5% on the first CRC 5,642,000 of annual net income, 10% on the excess up to CRC 8,465,000, 15% on the excess up to CRC 11,286,000, and 20% on amounts above CRC 11,286,000.¹

Non-resident companies without a permanent establishment are subject to withholding taxes on Costa Rican source income, with rates varying from 5% to 30% depending on the type of income.²

How to pay corporate tax in Costa Rica

Corporate taxes in Costa Rica are administered by the Ministry of Finance (Ministerio de Hacienda) through the General Directorate of Taxation (Dirección General de Tributación). Companies must register with the tax authorities and obtain a tax identification number before commencing operations.³

The corporate income tax return must be filed annually within three months and 15 calendar days from the end of the tax period, which means by March 15th of the following year for companies following the calendar year. Payments are made in Costa Rican colones (CRC), the local currency. Companies with foreign functional currencies must convert their financial statements to colones using official exchange rates.⁴

Costa Rica operates an advance payment system where taxpayers must make three partial payments as an advance on the income tax obligation during the fiscal year. These quarterly provisional payments help ensure steady tax collection throughout the year, with the final balance settled when filing the annual return.⁵

Late payment penalties and interest charges apply to overdue taxes. Companies that fail to file returns on time face additional penalties, and non-compliance can result in significant financial consequences.⁶

For a company with an annual turnover of $1.5 million USD (approximately 780 million CRC at current exchange rates), assuming a profit margin of 10%, the taxable profit would be approximately 78 million CRC. At Costa Rica's corporate tax rate of 30%, the annual tax liability would be: 78,000,000 CRC × 30% = 23,400,000 CRC (approximately $45,000 USD)

When expanding your business to Costa Rica, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

Get started with Wise Business 🚀

Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.

Tax Compliance in Costa Rica

The steps to keep your company fully compliant with Costa Rica’s tax regulations:⁷

• Appoint a Resident Agent: If your company’s legal representative does not reside in Costa Rica, you must appoint a certified Costa Rican lawyer to receive legal communications.
• Maintain Legal and Accounting Records: All companies must keep private legal books and accounting records of transactions for at least 10 years. These records are not filed annually but must be available during a corporate tax audit.
• File Ultimate Beneficial Owner (UBO) Declaration: Since 2019, all entities must file annually via the RTBF platform each April. Late filings may result in fines or blocked operations.
• Meet Annual and Monthly Tax Obligations:

• The annual income tax return is due by March 15 of the following year.
• Annual legal entity tax due in January.
• VAT and payroll filings are due by the 15th of each month.

• Understand Tax Rates: Costa Rica's corporate tax policy applies progressive rates from 10% to 30%, depending on income. Corporate tax for small business entities falls under these same brackets.
• Be Aware of Penalties: Non-compliance can result in fines of 50%–150% of undeclared tax, suspension from the National Registry, blocked operations, personal liability for directors, or ineligibility for government contracts.
• Use Technology for Compliance: Many businesses adopt corporate tax compliance software to streamline filings and reduce the risk of penalties, particularly when a corporate tax increase or unexpected bill is expected.

International Expansion to Costa Rica

Costa Rica is stealing the attention of businesses planning to set foot in Latin America. Over 1,000 multinational companies, including Boston Scientific, Equifax, Johnson & Johnson, and Bayer, operate there. It’s clearly a hub for long-term investment and innovation.^{8 9} Foreign direct investment reached USD 3.045 billion in 2022, representing 4.45% of GDP, and inflows grew by 32% in 2024.¹⁰

The Free Trade Zone (FTZ) regime is a key driver of this growth. It offers companies qualified tax exemptions, streamlined customs, and stable operating conditions. By 2023, Costa Rica hosted 375 FDI companies under the FTZ system and operated 68 Free Trade Zone parks, supporting over 321,000 jobs.^{8 9} These incentives, coupled with efficient logistics and a skilled workforce, give businesses competitive advantages when entering Central American markets.
Besides these, Costa Rica’s sustainability record further strengthens its appeal. For the last five years, 98% of the country’s energy matrix has been powered by renewables, which is why it received the UN Champions of the Earth award in 2019.⁹ Moreover, its young, educated population, 47% under 30, ensures a steady supply of talent for advanced manufacturing, technology, and services.¹¹

For companies asking “how much is the corporate tax rate in Costa Rica?”, rates vary depending on revenue brackets. This means that you must get corporate tax consultants on board. Submit corporate tax return filings to remain compliant and structure operations efficiently under Costa Rica’s laws. Understanding the Costa Rica corporate tax rate in advance helps firms plan expansion costs and take full advantage of the FTZ regime.

Listed below are the steps on how to start a business in Costa Rica:¹²

1. Conduct market research and prepare a solid business plan.
2. Choose a business entity type and register with the National Registry.
3. Complete tax registration with the Ministry of Finance.
4. Open a corporate bank account and establish proper record-keeping systems.

Starting a business in Costa Rica isn’t a challenge. It’s how you continue your operations and whether you reach your objectives that matters.

Incorporation of Business in Costa Rica

To incorporate a company in Costa Rica, businesses must complete registration with the National Registry and prepare legal documentation through a licensed notary. The process begins with choosing a unique company name, verifying it against the National Business Registry, and outlining its objectives. Additional authorization from state supervisory entities is required if the business involves banking, insurance, or securities.
You will also need to provide:^{13 14}

• Directors or Managers: An S.R.L. requires at least one appointed manager, while an S.A. must have a board of directors with at least four officers (president, secretary, treasurer, and fiscal). Nationality is not restricted.
• Registered Office: Every company must maintain a legal business address in Costa Rica.
• Articles of Incorporation and Bylaws: Drafted by a notary, these documents must include the company name, business purpose, share capital structure, legal representation, and company duration (if applicable).
• Shareholders: An S.A. requires a minimum of two shareholders, while an S.R.L. may operate with fewer but must divide capital into quotas.

Types of Businesses in Costa Rica^{15 16}

Sociedad Anónima (S.A.) – Corporation
It is best suited for large enterprises or firms seeking external investment. It allows the issuing of shares and requires at least two shareholders and a board of directors. There is no set minimum capital.
Sociedad de Responsabilidad Limitada (S.R.L. or Ltda.) – Limited Liability Company It is common among small and medium-sized businesses. It provides limited liability and management flexibility, with capital divided into quotas. At least one general manager must be appointed.

Both structures provide liability protection, but the choice depends on ownership structure and business size. Many corporate tax cases for small businesses in Costa Rica favour the S.R.L. due to its simplicity and lower compliance burden.

Note: Companies must register with the Ministry of Finance for corporate tax obligations. Annual filings, including financial statements, are mandatory. In some cases, firms may undergo a corporate tax audit to ensure compliance with local law.

International corporate tax best practices

Successful international tax management requires a proactive approach to compliance and strategic planning across multiple jurisdictions.

Maintaining accurate and up-to-date financial records is fundamental to meeting tax obligations in any country. This includes keeping detailed documentation of all business transactions, expenses, and revenue streams. Regular reconciliation of accounts and proper documentation of intercompany transactions are particularly important for multinational operations.

Understanding and leveraging double taxation treaties can significantly reduce overall tax burdens. Costa Rica has been working to expand its network of tax treaties, though it currently has fewer agreements compared to other OECD countries. These treaties often provide reduced withholding tax rates on dividends, royalties, and interest payments between treaty countries.

Staying compliant with both local and international tax regulations requires ongoing attention to regulatory changes. The OECD's Base Erosion and Profit Shifting (BEPS) initiatives and Pillar Two global minimum tax rules are reshaping international tax landscapes, making it essential for businesses to adapt their strategies accordingly.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Costa Rica efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.
• Get paid as if you were a local business: Use local account details for 8+ major currencies to easily receive payments from customers or investors.
• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.
• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.
• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from registration to receiving international payments and managing your global treasury.

Get started with Wise Business 🚀

Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.

FAQs - Corporate tax in Costa Rica

Who is liable for corporate tax in Costa Rica?

All companies incorporated in Costa Rica are liable for corporate income tax on their Costa Rican-sourced income. The Costa Rican tax system follows the principle of territoriality, so resident companies are primarily taxed on local income rather than worldwide income. Non-resident companies are subject to tax only on their Costa Rican-sourced income through withholding taxes or permanent establishment taxation.

Are there any tax incentives for businesses in Costa Rica?

Costa Rica offers various tax incentives, particularly for companies in free trade zones and certain qualifying sectors. Small and medium enterprises may benefit from reduced tax rates, and there are specific exemptions for micro and small businesses registered with the Ministry of Economy, including 0% tax on profits in the first three years of commercial activities. Companies in free trade zones can access significant benefits under special regimes.

What is the tax treatment of dividends in Costa Rica?

Dividends paid by Costa Rican companies are subject to withholding tax, with rates varying depending on the recipient and any applicable double taxation treaties. The specific rates depend on whether the recipient is a resident or non-resident and the existence of treaty provisions that may reduce standard withholding rates.

What is the process for registering for corporate tax in Costa Rica?

Companies must register with the General Directorate of Direct Taxation of the Ministry of Finance as taxpayers, which is typically completed within one day. This process involves obtaining a tax identification number and ensuring compliance with various registration requirements, including social security registration and municipal licensing.

What are the common pitfalls to avoid regarding corporate tax in Costa Rica?

Common mistakes include failing to make quarterly provisional payments, missing the March 15th annual filing deadline, inadequate record-keeping in Spanish, and incorrectly calculating taxable income under the territorial system. Currency conversion errors and failure to maintain proper accounting books with required seals and authorizations from the Mercantile Registry can also lead to compliance issues.

Sources used in this article:

1. PwC Tax Summaries: Costa Rica Taxes on Corporate Income
2. PwC Tax Summaries: Costa Rica Withholding Taxes
3. BLP Legal: 2025 Corporate and Tax Obligations Calendar
4. Moore Global: International Corporate Tax in Costa Rica
5. PwC Tax Summaries: Costa Rica Tax Administration
6. AG Legal: Important Aspects of the Corporate Taxes Law
7. Biz Latin Hub: Corporate Compliance Requirements
8. Invest Costa Rica: Why Costa Rica
9. BBC Storyworks (Procomer): Why Costa Rica is a Prime Destination for Multinational Companies
10. U.S. Trade.gov: Costa Rica Investment Climate Statement
11. Relocate.world: Investing in Costa Rica
12. Biz Latin Hub: Starting Business in Costa Rica (2025 Guide)
13. Costa Rica Corporation: Incorporation Requirements
14. Quatro Legal: Step-by-Step Guide to Registering a Business
15. JD Supra: Establishing a Business Entity in Costa Rica
16. Biz Latin Hub: Types of Companies/Legal Entity Structures

Sources last checked 08/10/2025