Friday 5 March 2021

Registering a Business in Costa Rica Can Be a Headache

Thursday 01 November 2012 | QBusiness

Although Costa Rica improved twelve positions in the Doing Business Index by the World Bank, the country fell three positions to 128 when it comes to starting a business. Despite the fact that the Government has implemented improvements, the drop is due to paperwork being held up and it becomes a headache to open a business.

According to the World Bank report, it takes an average of 53 days to register a business in Latin America.  In total, the entrepreneur must go through 12 procedures and it has an average cost of $1,379 (695,000 colones). Cost is recorded as a percentage of income per capita of the economy. This includes official fees, fees for legal services, and fees for purchasing and legalizing corporate books.

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The Government itself recognizes that the processes for starting a business are complex because there is no proper coordination and communication between participating institutions. This situation causes delays of procedures, difficult and duplicative processes, deteriorating services, negative impact on levels of competitiveness and high costs for the mobilization and processing of paperwork.

This situation reflects the need for a solution that allows improvement in processes, standardization and institutional integration and rethinking of the structure of procedures, in the specific case of procedures to register a new business entity in the public registry.

One alternative to improve the registration of a business is the project “Create Company”. The project aims to facilitate the registration of a company from registration to its operation, reducing the process by means of a digital window. According to the Minister of Economy, Mayi Antillon, the platform for next year will allow the country to improve.

During its first phase which the project implemented in February, looked at the consultation processes of pending applications for registration of a new corporation in the National Register and the authorization for the legalization of digital books (legal and accounting).

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In the mechanism that the government raises to register a firm through the systematization should be considered:

National Register: handles the registration of new corporations.

National Notary Address: valid if the notary is active.

General Direction of Taxation: generates the authorization number to obtain the books (legal and accounting).

National Printing: is responsible for issuing the edict, in the cases that applied for registration of the new corporation.

Supreme Court elections: verifies if an identity card is valid and current.

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Notaries: are responsible for performing the processing of applications for registration of new corporations.

Meanwhile, the participation of institutions is as follows:

Local governments: are responsible for issuing land use and business license.

National Registry:  Provides copy of registration and the property ownership certificate that will be used for the new business.

Ministry of Health: Health issues the operating license.

Environmental Technical Secretariat: analyzes and approves environmental impact assessments.

National Animal Health Service: provides services for the evaluation of risks to animal health and veterinary public health.

Social Security Fund: Start the application for registration as an employer.

National Insurance Institute (NII): issuing the policy of labor risks.

Directorate General of Taxation: performs registration as a taxpayer.


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