Fire Your Boss! And Become Your Own in Costa Rica
Jul 12, 2013
It’s a tempting thought, isn’t it? To actually fire your boss? It’s certainly not the norm in the world of job hierarchy; but firing your boss and going to work for yourself in one of the world’s most beautiful countries doesn’t put you in the ‘norm’ category...
If you’ve already been to Costa Rica, you know that businesses run the gamut… from high-end, posh, fully serviced hotels and restaurants right down to simple, not-sure-if-its-a-restaurant family-run establishments. Of course, location makes a big difference too. Starting a business in the incredibly popular and busy Jaco Beach area versus the more secluded Playa Tambor on the Nicoya Peninsula is night and day. In Jaco, you will pay much more to rent or purchase your space then you will in Playa Tambor, where in essence… you could simply open the doors to your own home. Of course, it’s all relative to the business you wish to start.
With both Canada and the US suffering economically, many folks are considering a move abroad way before retirement age. This has a two-fold effect… with more expats living in Costa Rica, there is more of a need for expat-friendly businesses – specialty food stores, hair salon/spa services, specialty restaurants and of course, real estate (rentals, for example).
Are the wheels turning yet? It’s easy to get excited at the prospect of starting a new life, especially with Costa Rica as the backdrop! But, just like anywhere, starting a business takes perseverance and planning.
We’ve compiled a list of what you should consider before taking the plunge into Costa Rica’s business world:
You do not have to be a resident of Costa Rica in order to start a business. That being said, if you’re in it for the long haul, going through the motions of obtaining your residency is a good idea. Although you can own your business as a non-resident, you are not permitted to work within your business. Basically... you aren’t allowed to take work away from local Costa Ricans.
Once you’ve been some type of resident for 3 years (go HERE to read more about residency in Costa Rica), most popular being Pensionado and Rentista, you can apply for Permanent Residency, at which point you can work within your business. Until that time, your role must remain as strictly management/owner.
Opening a bank account in Costa Rica is pretty much a necessity if you’re starting a business. Most banks are ok with you not having ‘official’ residency, as long as you can offer some kind of proof that you live in Costa Rica.
Regardless of which bank you go with, be prepared for an incredible amount of paperwork and having your patience tested. Opening a bank account, albeit necessary, is a tedious task in Costa Rica.
As for which bank to choose, there are a variety of options. In addition to familiar international banks like Citibank, HSBC and Scotiabank, you have the option of a number of public banks. It really comes down to your location, and what’s available to you. In all cases, dealing with English-speaking tellers/representatives is possible, especially if you’re in an area populated with other expats, or popular with tourists.
Although there are four different business structures in Costa Rica (Corporation, General Partnership, Limited Partnership & Limited Liability Partnership), the most popular is a Corporation, offering the same benefits and protections that a North American or European corporation does. You will pay anywhere from $300 - $1000 to have your corporation formed and registered with the Public Registry. If your Spanish is at all questionable (or non-existent), a local lawyer can help you through this step.
So you’ve set up your bank account and confirmed the structure of your business; now it’s time to visit your local municipality to obtain your ‘Uso de Suelo’ or ‘land use permit’. Depending on the type of business you’re starting, you will also be required to obtain a variety of other documents from other government bodies. Unless you’re absolutely confident in your Spanish abilities, you may want to enlist some help for this process.
Hire an Accountant
Just like anywhere else in the world, once you’ve got your business up and going, there are taxes to pay and records to keep. This is tricky enough to keep up with in North America, so doing it in Costa Rica is going to be that much more of a challenge. Your best bet is to find someone you can trust at the onset of your venture… this way they’ll be in the loop from the get-go. They’ll manage your files with the government and in the long term, save you money and headache.
Lower Your Expectations
This refers to doing business in Costa Rica as a whole… there’s a reason why people love to vacation and retire in this country! It’s relaxed, laid-back and most people aren’t in a big rush to get anything done. Just remember that although you’re starting a business, and may revert to your North American tendencies (stress, anxiety, urgency), you are not in the US or Canada anymore. Telling yourself this, and reminding yourself why you chose to do this in the first place will help put the big picture in perspective. If no one else is in a rush, why should you be? Just be sure to plan for this before starting on this adventure, and maybe extend your expected deadline of being up and going by a few months…
Starting a business from the ground up, in a foreign country, is a challenging endeavor – but so worth it in the long run!
Of course, there are other options for working in Costa Rica… if you’re lucky enough to have an employer that doesn’t care where you work, then sitting in the shade of a palm tree with your laptop probably sounds pretty good! Or, maybe you choose to simply work as a freelancer… photography, writer, etc. There are a multitude of options available! The best part of working in one of these scenarios is that you have no tax obligations to the Costa Rican government. As long as your money is coming from outside of the country, you’re free and clear. Not a bad gig, if you can get it. Alternatively, why not consider starting your own business and setting roots in a country that welcomes foreign entrepreneurs with open arms?
Costa Rica has so much to offer beyond a spectacular vacation destination. If you’re ready to make a change, why not visit this glorious country on a Discovery Weekend? Our developers in both the Southern Zone and the Nicoya Peninsula would be pleased to show you around the area, including the small towns and villages that other expats have set their own small business roots in.