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In Costa Rica purchasing property in the name of a corporation
has become very common practice. As a result many law firms
offer corporations that have already been formed and are
commonly referred to as a “shelf company”. Since this type of
corporation is already formed it is ready to function, purchase
property, transact business and carry out any activity authorized to
do so without having to wait for the incorporation process that is
required to form a new corporation from scratch.
In Costa Rica corporate formation is governed by the Commercial
Code and the law requires that at least two incorporators
personally appear before a Costa Rica Notary Public to sign the
articles of incorporation documents. The incorporation must be
transcribed in a special Notary Protocol and the extract is recorded
in the National Registry. The recording process can take up to 45
days depending on the volume of documents pending recordation
in the National Registry at the time the articles are filed. On
occasion you may also have to contend with delays due to name
similarity with the corporate name selected.
If the client is in Costa Rica and can personally sign the
incorporation deed and has time to wait for incorporation then you
can form a new corporation. In those situations where time is of
the essence and the client is not present in the country then one
expedient option is to act using a ready formed shelf corporation.
Generally the incorporators who also become the shareholders of
the corporation are provided by the law firm that incorporated the
shelf company. As such, when you purchase a shelf corporation
the following steps are required to ensure that ownership of the
corporation is fully transferred and recorded to the actual intended
owner:
1. The incorporators /shareholders must transfer the stock in
the corporation to the client. To accomplish this, stock certificates
must be printed and then endorsed by the incorporating
shareholders to the client purchasing the corporation.
2. The transfer of stock ownership should be recorded in the
shareholder registry book. The only officially recognized stock
registry book is the one that has been authorized and stamped by
the Costa Rican Revenue Department (Tributacion Directa). The
entry is handwritten in the book and must be signed by the
Secretary of the corporation.
Stock ownership is one thing and being named on the Board of
Directors of the corporation is another. In a pure shelf company
the incorporator/shareholder and the minimum directors required
by Costa Rican law, President, Secretary and Treasurer are
provided by the incorporating law firm. In this scenario, you must
remove the existing Board of Directors unless you specifically want
nominee officers on the corporation. The corporate resolution
which changes the Board of Directors must also be recorded in the
National Registry to become effective.
The shelf corporation has become a valuable tool to expedite
transactions in Costa Rica and can be used depending your
personal circumstance.
has become very common practice. As a result many law firms
offer corporations that have already been formed and are
commonly referred to as a “shelf company”. Since this type of
corporation is already formed it is ready to function, purchase
property, transact business and carry out any activity authorized to
do so without having to wait for the incorporation process that is
required to form a new corporation from scratch.
In Costa Rica corporate formation is governed by the Commercial
Code and the law requires that at least two incorporators
personally appear before a Costa Rica Notary Public to sign the
articles of incorporation documents. The incorporation must be
transcribed in a special Notary Protocol and the extract is recorded
in the National Registry. The recording process can take up to 45
days depending on the volume of documents pending recordation
in the National Registry at the time the articles are filed. On
occasion you may also have to contend with delays due to name
similarity with the corporate name selected.
If the client is in Costa Rica and can personally sign the
incorporation deed and has time to wait for incorporation then you
can form a new corporation. In those situations where time is of
the essence and the client is not present in the country then one
expedient option is to act using a ready formed shelf corporation.
Generally the incorporators who also become the shareholders of
the corporation are provided by the law firm that incorporated the
shelf company. As such, when you purchase a shelf corporation
the following steps are required to ensure that ownership of the
corporation is fully transferred and recorded to the actual intended
owner:
1. The incorporators /shareholders must transfer the stock in
the corporation to the client. To accomplish this, stock certificates
must be printed and then endorsed by the incorporating
shareholders to the client purchasing the corporation.
2. The transfer of stock ownership should be recorded in the
shareholder registry book. The only officially recognized stock
registry book is the one that has been authorized and stamped by
the Costa Rican Revenue Department (Tributacion Directa). The
entry is handwritten in the book and must be signed by the
Secretary of the corporation.
Stock ownership is one thing and being named on the Board of
Directors of the corporation is another. In a pure shelf company
the incorporator/shareholder and the minimum directors required
by Costa Rican law, President, Secretary and Treasurer are
provided by the incorporating law firm. In this scenario, you must
remove the existing Board of Directors unless you specifically want
nominee officers on the corporation. The corporate resolution
which changes the Board of Directors must also be recorded in the
National Registry to become effective.
The shelf corporation has become a valuable tool to expedite
transactions in Costa Rica and can be used depending your
personal circumstance.
USING A SHELF CORPORATION IN COSTA RICA
By Roger A. Petersen
Attorney at Law
By Roger A. Petersen
Attorney at Law
| Copyright 2007 By Roger A. Petersen No Copying or Reproduction Allowed without written authorization from the copyright holder. |