Should You Use a Holding Company for Costa Rica Property? SA vs SRL Explained

Most foreigners who buy property in Costa Rica eventually ask the same question: should I own this in my own name, or through a corporation?

The short answer is that most foreign property owners in Costa Rica use a corporate structure. Not to hide anything or avoid taxes, but because it offers practical advantages when you own property in a country where you don’t live full-time.

This guide explains the two most common corporate structures for property ownership in Costa Rica, when they make sense, and what you need to know before setting one up.

Why Foreigners Consider Corporate Structures

Costa Rica gives foreigners the same property rights as citizens. You can buy land, a condo, or a house in your personal name just like a local can. There are no restrictions on foreign ownership for most properties (with one important exception we’ll cover below).

So why do most foreign owners use a corporation?

Estate planning. When you own property through a Costa Rican corporation, transferring ownership after your death is simpler. Instead of navigating international probate, your heirs inherit shares in the corporation. The property title stays in the corporate name and doesn’t need to be re-registered.

Privacy. Corporate ownership offers a layer of separation between you and public property records. The National Registry shows the corporation as the owner, not your personal name.

Future sale flexibility. Selling the corporation’s shares can be faster and cheaper than transferring property title directly. Instead of paying the 1.5% transfer tax on the property’s value, you can sell the shares of the corporation, which is not subject to the same tax in many cases. Your attorney will explain when this applies.

Simplified closing. When you buy an existing property that’s already held in a corporation, the transaction can be as simple as buying the corporation’s shares. The property title doesn’t change hands at all.

The Two Main Corporate Structures

Costa Rica offers several types of legal entities, but two dominate property ownership: the Sociedad Anónima (SA) and the Sociedad de Responsabilidad Limitada (SRL).

Think of the SA as similar to a C-corporation in the U.S., and the SRL as similar to an S-corporation or LLC. Both offer limited liability, meaning your personal assets are protected if something goes wrong with the property (lawsuits, debts, etc.). But they differ in structure, cost, and administrative requirements.

Sociedad Anónima (SA)

The SA is the older, more traditional structure. For years, it was the default choice for foreign property owners.

An SA is structured around shares. You can have multiple shareholders, a board of directors, and different classes of stock. The original appeal was anonymity: bearer shares meant ownership wasn’t recorded anywhere, which some buyers liked.

That changed with Costa Rica’s Law 9416 (Law to Combat Tax Fraud), passed in December 2016. The law eliminated bearer shares as part of international efforts to combat money laundering and improve transparency. All SA shares must now be registered (nominative shares), with ownership recorded in the corporate books and disclosed to the government.

Key characteristics:

Minimum of two shareholders required (can be individuals or other corporations)
Board of directors required: president, secretary, treasurer
Shareholders and directors can be foreigners
More formal governance structure
Higher formation and maintenance costs

When it makes sense: If you’re setting up a corporation that will own multiple properties, manage a rental business, or involve multiple investors, the SA’s flexible share structure can be useful. For a single vacation property owned by one person or a married couple, it’s often overkill.

Sociedad de Responsabilidad Limitada (SRL)

The SRL is simpler, cheaper, and increasingly popular among foreign property owners who want the benefits of a corporation without the complexity.

Instead of shares, an SRL has quotas (ownership units). Instead of a board of directors, it has a manager. The ownership structure is straightforward and the administrative requirements are lighter.

Key characteristics:

Minimum of two quota holders required (can be individuals or other corporations)
Single manager instead of a full board
Quota holders and the manager can be foreigners
Simpler governance and reporting
Lower formation and maintenance costs than an SA

When it makes sense: For most foreign owners buying a single property or a small portfolio, the SRL offers the same core benefits as an SA (limited liability, estate planning advantages, privacy) at lower cost and with less bureaucracy.

Formation Requirements

Creating either type of corporation requires working with a Costa Rican attorney who is also a public notary. Only a public notary can file the incorporation documents with the National Registry.

Here’s what the process looks like:

1. Choose a corporate name. Your attorney will verify the name is available and doesn’t conflict with existing entities.

2. Draft the articles of incorporation. This legal document defines the corporation’s purpose, structure, capital, and governance rules. Your attorney prepares this in Spanish.

3. Register with the National Registry. The attorney files the incorporation documents and pays the registration fees. Processing typically takes 2-6 weeks, depending on the complexity of the corporate structure and how quickly the National Registry processes submissions.

4. Obtain a tax ID (cédula jurídica). Every corporation needs a tax identification number from the tax authority (Ministerio de Hacienda). This is what you’ll use for property transactions, utility accounts, and tax filings.

5. Open a corporate bank account. Most attorneys recommend this step, though it’s not always legally required. Having a dedicated bank account for the corporation keeps finances clean and makes accounting easier.

Formation costs vary by attorney but typically run $800-1,500 for an SRL and $1,200-2,000 for an SA. These fees include attorney time, notary services, and government filing costs.

Benefits for Property Ownership

Once your corporation is set up and you’ve transferred the property into its name (or purchased the property directly in the corporate name), here’s what you gain:

Liability Protection

If someone gets injured at your property and sues, they’re suing the corporation, not you personally. Your liability is generally limited to the assets held by the corporation. Your other assets (bank accounts, property in your home country, etc.) are separate.

This protection isn’t absolute. If a court finds you personally negligent or that you failed to maintain the property properly, they may “pierce the corporate veil.” But in normal circumstances, the corporation provides a meaningful layer of protection.

Estate Planning Simplicity

When you die, property owned in your personal name triggers international probate. Your heirs have to navigate both Costa Rican and your home country’s legal systems to inherit.

When you own property through a corporation, your heirs inherit the corporation’s shares instead. The property title stays in the corporate name. No probate in Costa Rica. No need to re-register the property.

You can structure the shares in your estate plan however you want. Leave 50% to your spouse and 25% to each of your two children. Or put the shares in a trust. Your estate attorney (in your home country) and your Costa Rican attorney can coordinate to make the transition smooth.

Potential Transfer Tax Savings

Here’s where things get interesting for future sales.

When you sell property directly (title transfer), you pay a 1.5% transfer tax on the registered value. On a $500,000 property, that’s $7,500.

When you sell a corporation’s shares instead of the property itself, the transfer tax often doesn’t apply (though capital gains tax still does). Your attorney can structure the sale as a stock transaction, and the property title never changes hands.

This doesn’t work in every situation. If the property’s registered value is significantly below market value (common in Costa Rica), the tax authority may challenge a stock sale and assess transfer tax anyway. But in many cases, selling the corporation saves money for both buyer and seller.

Simplified Property Purchase

If you’re buying a property that’s already held in a corporation, the transaction can be remarkably simple. Instead of transferring title, you buy the corporation’s shares. Your attorney verifies the corporation is in good standing, checks for liens or debts, and drafts a share purchase agreement.

Closing can happen in days instead of weeks. No waiting for title registration at the National Registry. Just a change of ownership in the corporate books.

The catch: you inherit the corporation’s history. If it has unpaid taxes, unresolved legal issues, or debts, those become your problem. This is why thorough due diligence is critical when buying an existing corporation.

Tax Implications

Corporate ownership doesn’t exempt you from taxes. You’ll pay the same property taxes, and the same capital gains tax when you sell, regardless of ownership structure.

Here’s what to know:

Annual Property Tax

Costa Rica’s property tax is low: 0.25% of the registered property value per year. For properties with construction values exceeding approximately ₡143-145 million colones (roughly $285,000-$290,000 USD as of 2026, though this threshold adjusts periodically), there’s an additional luxury tax on a sliding scale, capped at 0.55%.

These taxes apply to the property itself, not the owner. You pay the same amount whether you own in your name or through a corporation.

Corporate Taxes

SAs and SRLs are subject to corporate income tax if they generate income. For a vacation rental property that earns rental income, the corporation must file annual tax returns and pay tax on net income.

The corporate income tax rate in Costa Rica is 30% on net profits. However, deductible expenses (property maintenance, cleaning, management fees, mortgage interest, depreciation) often significantly reduce taxable income.

If your property doesn’t generate income (it’s purely for personal use), you still need to file a zero-income return annually to keep the corporation in good standing.

Capital Gains Tax

Costa Rica introduced capital gains tax on real estate in July 2019. The tax treatment depends on when you purchased the property and how you use it:

Properties purchased before July 1, 2019: You can choose between paying 15% on the actual capital gain (profit) OR a flat 2.25% on the total sales price. The flat-rate option can be advantageous if your property has appreciated significantly.

Properties purchased after July 1, 2019: You pay 15% on the capital gain (sale price minus purchase price and documented improvements).

Vacation rental properties (income-producing): Capital gains are taxed at 30% because the property is classified as a business asset.

Primary residence exemption: If you can prove the property was your primary residence (you lived there 183+ days per year), no capital gains tax applies regardless of appreciation.

These rates apply whether you own the property personally or through a corporation. Selling the corporation’s shares doesn’t exempt you from capital gains tax; the tax authority treats it as an indirect property sale and applies the corresponding rate.

U.S. Tax Considerations

If you’re a U.S. citizen or resident, you have additional reporting requirements:

Foreign corporation disclosure. If you own shares in a foreign corporation (including a Costa Rican SA or SRL), you must report it to the IRS on Form 5471. This is purely informational, but penalties for non-disclosure are steep.

Foreign account reporting. If the corporation has a bank account, and you have signature authority over it, you may need to file an FBAR (Foreign Bank Account Report). The threshold is $10,000 in aggregate foreign accounts.

Rental income. If the corporation earns rental income, that income may be taxable in the U.S. as well as Costa Rica. You’ll likely get a foreign tax credit for Costa Rican taxes paid, but the reporting is complex. Work with a CPA who understands foreign real estate.

This isn’t legal or tax advice. These are complicated areas where mistakes are expensive. Talk to a qualified tax professional before you set up a foreign corporation.

Maintenance Requirements

Corporations don’t run themselves. Both SAs and SRLs require ongoing administrative work to stay in good standing:

Annual Fees and Filings

Every corporation must comply with several annual obligations to the Costa Rican government:

Tax on Legal Persons: An annual tax ranging from approximately $115 to $400, depending on whether the corporation is active (earning income) or inactive, and the gross income level if active. Non-payment for three consecutive years results in dissolution of the corporation.

Education and Culture Stamp: An annual tax of approximately $10 to $35, based on the corporation’s stated capital stock.

RTBF Declaration (Transparency and Beneficial Owners Registry): An annual declaration to the Central Bank disclosing all shareholders and beneficial owners. The ongoing cost is approximately $150+ per year. However, the first-year filing costs significantly more (around $552 total) because it requires preparing and registering a special power of attorney with the National Registry, which includes notary fees ($250+), the declaration filing fee ($150), and government registration stamps ($100+).

Most property-holding corporations declare minimal capital to keep the capital-based fees as low as possible.

Annual Tax Returns

All corporations must file an annual tax return (Declaración de Impuesto sobre las Utilidades) by March 15 for the previous calendar year. If the corporation had no income, you file a zero-income return. If it earned rental income, you report income and expenses.

You’ll need an accountant for this. Expect to pay $300-800/year for basic tax preparation for a property-holding corporation.

Resident Agent

Every corporation must maintain a resident agent (apoderado generalísimo) who is a Costa Rican attorney or resident. This person receives legal notices on behalf of the corporation and ensures corporate compliance.

Most attorneys who set up corporations offer ongoing resident agent services for $200-500/year.

Corporate Book Maintenance

Both SAs and SRLs must maintain corporate books recording shareholders/quota holders, meetings, and major decisions. In practice, most attorneys handle this as part of their resident agent service.

Total annual maintenance cost for a simple property-holding corporation: approximately $775-1,800+/year, including government fees ($275-585), attorney/resident agent fees ($200-500), and accountant fees ($300-800). Note that the first year will be higher (add approximately $400-450 more) due to the initial RTBF power of attorney setup and registration. These costs are in addition to property taxes and any rental management fees.

Common Use Cases

Here are scenarios where a corporate structure makes the most sense:

Vacation property for personal use. If you bought a condo in Tamarindo for two weeks a year and occasional rental income, an SRL simplifies estate planning and offers liability protection. Formation cost is reasonable and annual maintenance is manageable.

Short-term rental investment. If you’re running a vacation rental business through Airbnb and Vrbo, the corporation provides liability protection and makes expense tracking cleaner. Rental income is taxed either way, but the corporate structure keeps business finances separate from personal.

Property purchased with partners. If you and a friend bought a beach house together, the corporation clearly defines ownership percentages (through shares or quotas) and prevents disputes. It also simplifies the exit if one of you wants to sell your share later.

Portfolio of properties. If you own or plan to own multiple properties in Costa Rica, a single corporation can hold them all. This centralizes management and reduces administrative complexity (one tax return, one resident agent, etc.).

Property owned by a trust. If your estate plan includes a trust, having the trust own shares in a Costa Rican corporation is cleaner than having the trust own the property directly. The corporate structure bridges the legal systems.

When Corporate Ownership Doesn’t Make Sense

A corporation isn’t always the right answer:

Very small property values. If you bought a small lot for $50,000 and aren’t planning to develop it soon, the annual corporate maintenance costs (potentially 1.5-3% of the property’s value) might outweigh the benefits.

Short-term hold. If you’re buying property to flip it in a year, the formation cost and hassle aren’t worth it. Own it personally and pay the 1.5% transfer tax when you sell.

Already have permanent residency. Some of the privacy and estate planning benefits matter less if you’re a legal resident of Costa Rica and plan to live there permanently. Though even residents often use corporations for rental properties.

Aversion to ongoing compliance. If you hate paperwork, forget about annual filings, and don’t want to pay for ongoing attorney and accountant services, corporate ownership will frustrate you. It requires discipline and costs money every year whether you use the property or not.

SA vs SRL: Which One?

For most foreign owners of one or two properties, the SRL wins on cost and simplicity. You get the same core benefits (liability protection, estate planning flexibility, privacy) without the complexity of a board of directors and higher fees.

Choose an SA if:

You’re setting up a property management business with multiple investors
You need a flexible share structure with different classes of stock
You’re holding a large portfolio and want the more formal governance structure

Choose an SRL if:

You’re buying a single vacation property or a small portfolio
You want lower formation and maintenance costs
You value simplicity over corporate formality

Talk to your Costa Rican attorney about your specific situation. They’ll recommend the structure that fits your goals and budget.

Working with Professionals

Setting up and maintaining a corporation requires two professionals:

A Costa Rican attorney. Choose someone who is fluent in English (if you don’t speak Spanish), specializes in real estate, and offers resident agent services. Ask for referrals from your real estate agent or other foreign property owners. Expect to pay $800-2,000 for formation and $200-500/year for ongoing services.

A Costa Rican accountant. Even if your corporation has no income, you need someone to file the annual tax return. If you’re earning rental income, you need proper bookkeeping and expense documentation. Expect to pay $300-800/year.

If you’re a U.S. citizen, you may also need a U.S.-based CPA familiar with foreign real estate holdings to handle IRS reporting. This is separate from your Costa Rican tax compliance.

Final Thoughts

A corporate structure for property ownership in Costa Rica isn’t about secrecy or tax avoidance. It’s a practical tool for estate planning, liability protection, and administrative convenience when you own property far from home.

The SRL has become the default choice for most foreign owners because it delivers the benefits at a reasonable cost. Formation runs $800-1,500, annual maintenance is $850-1,800, and the structure is simple enough that you won’t lose sleep over compliance.

The upfront cost and ongoing fees are real. But if you own a $300,000+ property in Costa Rica, the benefits (especially for estate planning) usually justify the expense.

Talk to a qualified Costa Rican attorney before you make any decisions. Every property situation is different, and what works for your neighbor might not work for you.

For more on buying and managing property in Costa Rica:

Foreigners Buying Property in Costa Rica — The complete process for non-residents, from title due diligence to closing.
Costa Rica Rental Income Tax — Tax obligations for rental property owners, including corporate vs. individual tax treatment.
Vacation Rental Regulations in Costa Rica — ICT registration requirements and compliance for short-term rentals.
Choosing a Property Manager in Costa Rica — What to look for when hiring someone to manage your investment property.

Legal Disclaimer: This guide is for informational purposes only and does not constitute legal or tax advice. Consult a qualified Costa Rican attorney or tax professional before making decisions about property ownership structures, corporate formation, or tax planning. Laws and regulations change, and your specific situation may have unique considerations not covered in this general guide.