Mandatory Shareholder Registry in Costa Rica.

If you’re new to the legal game in Costa Rica you may be wondering what’s the big deal behind a Mandatory Shareholder Registry. At first glance it may appear to be somewhat innocuous, but if you were to create either a new corporation or register an existing one you’d be presented with this new interface and in many cases the public perception of what it consists of is wrong. Don’t let them fool you. Here’s a quick read to clear things up, additionally it should work as effectively as an Ambien for insomnia.

Think back to 2016.

With the approval of Law No 9416 and its regulations in December of 2016, the ‘Registry of Transparency and Final Beneficiaries’ was created under the auspices of the Central Bank of Costa Rica. Disclosure for corporations and legal entities is mandatory under this new system which is now in effect and operational as of September 1st 2019. Yay!

The month for the submission of the registration is determined by the last digit of your Corporate ID number.

September – Corporations with last identification number 0 and 1.
October – Corporations with the last identification number 2 and 3.
November – Corporations with last identification number 4 and 5.
December – Corporations with the last identification numbers 6 and 7.
January 2020 – Corporations with the last identification number 8 and 9.

All registered companies/corporations must produce this declaration with submission of requested records. The following persons are required to submit the declaration: The president of a corporation (el Presidente en Sociedad Anónima), the manager of a Limited Liability Company (el Gerente de Sociedades de Responsabilidad Limitada o Limitadas), the Representative appointed in the branches of Foreign Companies (el Representante designado en las sucursales de Empresas Extranjeras), the Administrator in Civil Corporations (el Administrador en Sociedades Civiles).

In order to make this declaration you must have a digital signature certificate “firma digital”, in addition to knowledge of Spanish and computer operation. Digital signature certificates are only available to Costa Rican citizens or legal residents with a valid DIMEX, resident ID.

If you are the legal representative and cannot obtain a digital signature certificate, a Power of Attorney must be granted to another person who has one in order to perform the registration on behalf of your corporation. This Power of Attorney must be executed as public deed with a Notary Public and adhere to the necessary formalities (Poder otorgado en Escritura Pública).

As of 2020 it will be mandatory to make a report once a year in April. In addition, when there is any corporate ownership transfer that represents 15% or more of the capital stock, there will be a period of 15 business days for the change to be reported.

Failure to comply with the obligation to submit the report will hinder the registration of documents and issue of personal certifications in favor of the delinquent corporation. Also, the tax authorities will impose severe fines (Pecuniary fine of 2% of the gross income of the legal entity – Minimum of 3 base salaries which translates to roughly $2000, with a maximum fine of 100 base salaries). It is advisable to take the measures necessary and verify if you can obtain a digital signature certificate and submit the report.