Using a Costa Rican Shelf Corporation
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 physically 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 theNational 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
