Cryptocurrencies are becoming more attractive to more and more people, and cryptocurrency businesses are thriving in many countries around the world. Costa Rica is one of these countries, where such companies can be incorporated without too much hassle, as it is not necessary to obtain a crypto exchange license.
Although this sector is not regulated by a specific law, the establishment of a cryptocurrency company in Costa Rica is still possible. Below we present the steps and procedure for forming a crypto company in Costa Rica, as presented by our local specialists. You can also count on them for support in immigrating to Costa Rica.
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Table of Contents
- What is cryptocurrency?
- Why is Costa Rica attractive for cryptocurrencies?
- Steps to start a cryptocurrency company in Costa Rica
- What are the legal structures that can be used to start a crypto business in Costa Rica?
- Useful Cryptocurrency Business Ideas for Costa Rica
- Taxation of cryptocurrencies in Costa Rica
What is cryptocurrency?
Cryptocurrency, sometimes called cryptocurrency or crypto, is any form of currency that exists digitally or virtually and uses cryptography to be secured. From the point of view of use, it can be exchanged for goods and services, cryptocurrency is like fiat currencies like the dollar or the euro. The major difference is that they do not have a physical form, cryptocurrency is entirely digital, and every transaction is recorded on an immutable distributed ledger called blockchain.
Why is Costa Rica attractive for crypto?
Cryptocurrency and the crypto community has flourished in Costa Rica due to several different factors. First, the legislative system and favorable regulations create a welcoming environment and are free of excessive bureaucracy. The Costa Rican government has a very open attitude towards cryptocurrency and its various applications. You even have the possibility to pay employees’ salaries using Crypto currency.
Also, Costa Rica has a stable democracy and enjoys a strong economy.
Steps to Start a Cryptocurrency Company in Costa Rica
The procedure for starting a crypto business in Costa Rica must comply with the same regulation that applies to commercial enterprises and must begin with the selection of the legal entity.
Here are some steps to start a cryptocurrency company in Costa Rica:
- Research: Familiarize yourself with the local regulations and laws related to cryptocurrencies and fintech in Costa Rica.
- Business Plan: Develop a clear and comprehensive business plan that outlines your company’s goals, target market and revenue streams
- Register your company: There are different business structures to choose from in Costa Rica, including sole proprietorship, limited liability company, and corporation. Consider factors such as liability protection, taxes and compliance requirements when making your decision.
- Preparation of documents: Draft of the Company’s Articles of Incorporation in which the object of activity must stipulate the type of crypto operations to be carried out. These documents, along with other information (details of shareholders, directors and corporate address) must be submitted to the Trade Registry.
- Bank Account: Open a local bank account for your company and secure it with appropriate security measures.
- Develop and implement security measures: Ensure you have adequate cyber security measures in place to protect your company and customer assets.
- Compliance: Ensure your company complies with all relevant Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. AML and KYC regulations are mandatory in Costa Rica.
- Hire a local attorney: Hiring a local attorney with experience in business formation and regulation can be helpful to ensure compliance with local laws and regulations.
- Marketing: Develop and implement a marketing strategy to reach and attract target customers.
It is important to note that the regulations and requirements for starting a cryptocurrency company can change over time. It is advisable to consult with a local attorney or consultant to stay up to date with the latest rules and regulations.
There is no, nor is it necessary to obtain a cryptographic exchange license in Costa Rica, However, such companies can trade virtual assets in or out of the country.
What are the legal structures that can be used to start a crypto business in Costa Rica?
The private limited liability company and the offshore company are two of the most used legal forms used to create any type of business in Costa Rica. If the first can be used for activities within the country, the other can be used to conduct operations outside Costa Rica.
The registration procedure is the same for both.
If you are a non-resident investor and want to set up a cryptocurrency company in Costa Rica and operate in your home country, the offshore entity can be a good solution.
There is no need to obtain a crypto exchange license in Costa Rica. When operating in other countries, depending on the country’s regulations, you will need a permit or license.
Useful Cryptocurrency Business Ideas for Costa Rica
Cryptocurrency exchange in Costa Rica is a great business idea in the fintech sector. There are several other activities that can be carried out in connection with and using digital money. Among these:
- mining is one of the simplest activities that can be done as a cryptocurrency company.
- initial coin offerings or ICOs involve the trading of digital money to raise funds for various projects.
- ATMs and e-wallets can be used as cryptocurrency business ideas in Costa Rica.
Taxation of cryptocurrencies in Costa Rica
The National Bank of Costa Rica does not consider virtual money as an official currency, however, different trading operations are allowed.
If you are among those interested in opening a cryptocurrency company in Costa Rica and wondering what taxes must be paid, here are the most important aspects:
- if your activity is completed in Costa Rica, the profit tax payable is 30%;
- capital gains taxes are levied at a rate of 30%;
- the payment of dividends can be taxed at rates of 5% or 15%;
- if the activities target other countries, no tax will be paid in Costa Rica.
- double taxation treaties apply to these companies; Costa Rica has only one agreement with Spain.
How can Szilaghi Consulting help you start your crypto business?
If you want to know more about how to open a crypto business in Costa Rica, please contact us. Szilaghi Consulting has been offering corporate services since 2004 and we have been involved in cryptocurrency projects for over a decade. Our lawyers and consultants are aware of the latest trends and regulations in the industry and can provide expert advice to individuals or companies interested in setting up and operating a cryptocurrency company.
We invite you to schedule a consultation with us. We like to communicate with our customers, troubleshoot their problems, and offer solutions. You are invited to contact us today to discuss this with one of our agents. Let us help you take your business to the next level.