Embassy of Costa Rica in Canada - trade

By: Embassy Of Costa Rica In Canada  09-12-2011

Costa Rica has implemented several laws to encourage nationals and foreigners to invest in all fields available; there are laws that provide certain fiscal incentives for investments in the areas of tourism, export, commerce, agro-industries and all new projects are always welcome in our country.

The Costa Rica-Canada Free Trade Agreement was signed on Monday April 23, 2001, and entered into force as of November 1st, 2002, enhancing the commercial opportunities of our business sectors. Our Embassy's priority is to promote the trade and business relations between our two countries, not only providing information, but facilitating contacts, organise exploring missions, advices and more.

To provide a better service, we work closely with:

Office of Promotion of Trade
In Toronto, Canada:
- e’mail: [email protected]
Director: Itzamn Huelat Q.
Phone: 416-865-3382
16 Four Seasons Place, Suite 107 Etobicoke, ON. M9B 6E5.

In New York, USA:
– e’mail: [email protected]
Director: Maykool López
Phone: 212-967-0051 - 212-967-0053
40 West 37th Street, Suite 300, New York, NY 10018

In New York, USA:
- e’mail: [email protected]
Phone: 212-984-0631 - Fx: 212- 880-649
100 Park Avenue, 16th Floor
New York, NY 10017

Important information:

Main Exports. Electronic components, telephone equipment, textiles, bananas, coffee, pineapples, fruit juices, fish and sea food and others.

Major Revenue generator: Electronic circuits, microstructures, agriculture and Tourism.

Main Imports. Petroleum, machinery, industrial capital goods, durable consumer goods, chemical, and foodstuffs.

Industries. Electronics, food processing, apparel, construction materials and plastic products.

Commercial negotiations. Costa Rica has signed Free Trade Agreements with Mexico, Chile, Dominican Republic, Trinidad & Tobago and Caribbean States, Canada, the United States of America, Panama and Singapore and, has almost finished negotiations with the European Union, and China.

Constitution of your company in Costa Rica:

Three elements are essential for the constitution of a Company in Costa Rica:

1) A Public Document containing the constitution of the company before a Notary Public.
2) Publication of that document at the Official Newspaper "LA GACETA".
3) Registration of that Public Document at the Public Register, under the Mercantile Section.In Costa Rican a Public Notary is invested, by law, with public faith and all civil acts of importance should be executed before him in order to create a valid public instrument.

Taxation. Income Tax. This tax applies only to income generated in Costa Rica. It has to be paid by:

1) Persons with profits generating activities. The following tax table is applicable:
a) Profits up to Can. $3,700 per year are tax-exempt.
b) In excess of $3.700 and up to $6.500: 10%.
c) In excess of $6.500 and up to $10.725: 15%.
d) In excess of $10.725 and up to $22.400: 20%.
e) In excess of $22.400: 25%.

2) Legal entities( corporations or "sociedades anonimas). the following tax table is applicable:
a) For an annual gross income up to $67.000: 10% on net profits.
b) For an annual gross income up to $135.000: 20% on net profits.
c) Above $135.000: 30% on net profits.

Corporations without any commercial activities during the fiscal year (October to September) must pay CAN $105 a year. Loses during one fiscal year may be deducted within the next three fiscal years. In case of agricultural activities, loses can be deducted during the following five years.
Note: you have the right to take your profits out of the country.

Tax on distributed profits:a) Whenever the profits are distributed to partners, 15% tax must be paid to the Tax Office.
b) When dividends are distributed by a corporation whose shares are registered in an officially recognized stock exchange, a 5% tax must be with held only if the shares were acquired through a stock exchange.Salary Tax: a) For an annual income salary of CAN $1000: TAX EXEMPT.
b) In excess of $1000 and up to $1400: 10%.
c) Above $1400: $15%.Land or Territorial Tax: Law No.27 of March 2, 1939, as amended, establishes a tax on real estate called land or territorial tax (impuesto territorial). This tax is levied in favour of the Municipalities and is very reasonable. It taxes land and all permanent buildings, installations and plantations contained therein.Conveyance Tax: Law 6153 of November, 1977 as amended establishes a conveyance tax based on the value of the property transferred at the following rates. 1.5%, 2.5%, 3.5%, or 4.5%, according to a char. There are other taxes existing at the present time. You may ask your lawyer or business advisor in Costa Rica in case you require more information.

Investments Laws: Certain activities such as fishing, poultry, forestry, pig breeding etc., enjoy special tax benefits. Investments in reforestation are tax deductible. Tourism Investments (Hotels, car rentals, etc.) enjoy a very good tax exemption especially for custom procedures, product or machinery importation necessary with the business operation. Specific information on tax and fiscal incentives is available from The Costa Rican Foreign Trade Corporation (Procomer). We recommend visiting their web site: or the Costa Rican Investment and Trade Development Board:

Banking system: The National Banking System in Costa Rica consists of the following entities:

1) Central Bank of Costa Rica. (Federal Reserve Bank in some countries).
2) State owned or Public Banks: Banco Nacional, Banco de Costa Rica and Banco Crédito Agrícola.
3) Commercial Private Banks. There are several Private Banks in Costa Rica and one of them is the Canadian Bank of Nova Scotia. A very interested characteristic and certainly a safeguard for depositors, is that the public banks of Costa Rica cannot become insolvent. The State guarantees the operation of all public banks and thus bankruptcy is ruled out.Employment requirements: The article 13 of our Labour Code establishes: “All companies in Costa Rica must have a 90% of Costa Rican employees; only 10% of foreign employees are allowed. That regulation is not applicable to the President, Directors, and managers of the company. Also, to hire an employee, you have to have a work contract, ask your lawyer about it.Other related information:

• To get the Costa Rican Permanent Residence by becoming a " Foreign Investor". Ask us for the document: "Investment and Retiring in Costa Rica".
• .
• .
• For Custom Procedures, ask us for a list of Custom Agencies.
• For Real Estate information, please contact: Costa Rican Real Estate Broker's Association: (011-506) 283-01-91 or Fax: (011506) 283-03-47.

Interested in Costa Rican products? Contact the Costa Rican Commercial Office in Canada.

Costa Rica and Canada have strengthened the commercial ties by signing a Free Trade Agreement that allows Costa Rican products to enter Canada, taking advantage of certain benefits under this agreement, and vice-versa.

Our Commercial Office is located in Toronto, supported by the Foreign Trade Corporation of Costa Rica (PROCOMER) offering a wide range of services to help exporters strengthen and expand the presence of Costa Rican products in commercial markets world wide. Our main objective is the promotion of Costa Rican products in Canada, through commercial missions, independent business visits, fairs and other events of interest.

With the support of Procomer´s experts and other public and private organizations, our programs are designed by committees of businesspeople that represent our various national productive sectors. These work teams assist our institution in identifying the needs of different sectors and customizing our services.

Currently, Procomer has established Commercial Offices in Canada, USA (New York and Los Angeles), Mexico, Puerto Rico, Dominican Republic, Trinidad & Tobago and Chile.

For more information, fee free to contact our Commercial Office in Toronto any time.

PROCOMER – Canada Office
Director:     Itzamn Huelat
Assistant:    Nelly Martínez

Address: 16 Four Seasons Place, Suit 107
Etobicoke, ON M9B 6E5Tel (416) 865-3382
Fax (416) 865-3383
Cell. (416) 721-3382

Other related links:

Canada Costa Rica Chamber of Commerce The Canadian Trade Commissioner Service .

The information in this article was current at 06 Dec 2011

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