Some people arrive in Costa Rica with a business idea: a small hotel, a restaurant, a tour company, a shop. Some of these businesses do very well. But owning a business here comes with more responsibility than newcomers may expect, especially once they hire their first employee.
Before opening a business in Costa Rica, and before you sign a lease or buy equipment, it helps to know what you are taking on and whether your residency lets you do it.
First question: does your residency allow it?
Costa Rica’s immigration law says temporary residents may carry out only the paid or profit-making activities that the Dirección General de Migración y Extranjería (DGME) authorizes, whether as an employee or on their own account. Pensionados, rentistas and investors are all temporary residents. Permanent residents may work in any paid activity.
Registering a company is not the same as having permission to work in it. If you plan to run the business yourself, confirm your authorization first. Our guide to work rights by residency category explains the difference.
Permits and registrations before you open
A business needs more than a company. Depending on what you do, you will deal with:
- tax registration with the Ministry of Finance (Hacienda);
- a municipal business licence, usually called a patente;
- health or operating permits for certain activities, such as food service;
- land-use approval for the premises you want to use.
Each step has its own paperwork and timing. We cover them in Business regulations in Costa Rica.
What you owe your employees
The employer side is where new business owners can be caught off guard. Costa Rica’s Ministry of Labour (MTSS) explains these rights clearly, and they apply whether you employ one person or twenty.
The aguinaldo: an extra month’s pay at Christmas
Every worker who has worked at least one month for the same employer is entitled to the aguinaldo. It is calculated by adding up the worker’s ordinary and overtime pay from December 1 of the previous year to November 30 of this year and dividing by twelve. For someone who worked the whole year, that is roughly an extra month’s pay. It must be paid by December 20.
Paid vacations
Employees earn paid vacation time. If employment ends before they have taken it, the unused vacation must be paid out.
Notice and severance
When an employer ends a job without just cause, the worker is entitled to notice (preaviso) and severance (cesantía) on top of vacation pay and the aguinaldo. During the notice period, the employer must give the worker one day off a week to look for a new job.
Social security and insurance
Employers register with the Caja Costarricense de Seguro Social (CCSS) and keep contributions up to date. Workplace risk insurance must also be arranged. Our article on hiring workers legally goes through these steps.
The part that is easy to leave out of the business plan
Add it up and a small business is a full-time commitment: payroll every month, a Christmas bonus every December, paperwork with several institutions, and the risk that the business simply does not earn what you hoped. If you moved to Costa Rica to slow down, that may not be the life you had in mind.
Other ways to earn from your savings
If your real goal is income rather than running something, there are simpler options. One is private lending through our sister company GAP Investments: you lend your own money, secured by titled property in Costa Rica, and the borrower pays you interest monthly. There are no employees, no premises and no aguinaldo. You can choose a conservative approach or a higher-rate one.
Read Private lending in Costa Rica: income without running a business to see how it works and what the risks are.
Frequently asked questions
Can I own a company in Costa Rica as a pensionado?
Owning a company and working in it are separate questions. Temporary residents may carry out only the paid or profit-making activities DGME authorizes, so check before you take an active role.
When is the aguinaldo due?
According to the Ministry of Labour, by December 20 each year.
Do I need residency to lend through GAP Investments?
No. GAP works with lenders of any nationality, and residency is not required.
Talk to CRIE
WhatsApp CRIE at +506 8373 2085, or email info@crie.cr. For lending, WhatsApp GAP Investments at +506 4001 6413.
This article is for general information only and is not legal, tax, labour or financial advice. Rules can change; confirm current requirements with DGME, the Ministry of Labour or a Costa Rican professional before acting.