Doing Business In... 2025 Comparisons

Costa Rica has a civil law legal system, which is mainly based on Legal Codes and Laws issued by Congress, as well as Regulations issued by the country’s Executive Branch.

The Judicial order is headed by the Supreme Court of Justice, which is divided into four chambers, as follows.

• First Chamber – oversees civil, commercial and administrative matters.
• Second Chamber – oversees labour and family matters.
• Third Chamber – oversees criminal matters.
• Constitutional Chamber – oversees constitutional matters and the protection of fundamental rights.

As a general rule, foreign investments in Costa Rica do not require prior approval by any governmental authority, and foreign investors enjoy the same rights as Costa Rican nationals across most economic sectors. However, there are notable exceptions to this general principle, and it is highly advisable to seek legal counsel before carrying out any investment to ensure compliance with applicable regulations.

Some examples of sector-specific restrictions include the following.

• The energy sector – investments in energy-generation projects aimed at selling electricity to authorised service providers are subject to ownership restrictions. Specifically, a minimum portion of the capital stock involved must be held by Costa Rican citizens in order to obtain the relevant concessions and operate under the regulatory framework.
• Maritime-terrestrial zone concessions – projects involving concessions in the maritime-terrestrial zone – commonly used for real estate, tourism, and hospitality developments near the coast – are governed by a specific law that requires the majority ownership of the concession-holding entity to be in the hands of Costa Rican citizens.

These are only two of several sectors subject to restrictions. In most cases, there are structuring alternatives – including but not limited to the involvement of a local partner or intermediary – that may allow foreign investors to successfully participate in restricted sectors while remaining compliant with the law.

As stated, foreign investors do not require a specific government authorisation in order to invest in Costa Rica. There may be specific requirements that need to be observed in certain sectors, but such requirements do not require special authorisation. There are mainly legal requirements to ensure compliance with the law.

As noted above, foreign investors do not require a general government authorisation to invest in Costa Rica. The country maintains an open investment regime, and foreign nationals are generally entitled to own property, operate businesses, and participate in most sectors under the same terms as Costa Rican citizens.

However, certain regulated sectors may impose specific legal requirements or limitations – such as ownership thresholds, licensing obligations or nationality-based restrictions. These are not formal investment approvals per se, but rather regulatory conditions that must be met to legally operate within those sectors.

Therefore, while there is no centralised approval process for foreign investment, it is crucial for investors to evaluate regulatory requirements on a sector-by-sector basis. Early legal due diligence is recommended to avoid compliance risks and ensure that an investment is properly structured before it takes place.

As indicated, there are no such authorisations. Regarding the specific restrictions or rules that apply to certain sectors, as long as such legal dispositions are objectively applied by government authorities, they cannot be disputed. If any arbitrary resolution or official position contradicts the law, such decisions can be challenged at the Administrative Courts.

The three most common legal entities used in Costa Rica are the Corporation (Sociedad Anónima or SA), the Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL), and the Branch (Sucursal). Their main characteristics are outlined below:

• Sociedad Anonima (SA) – this is the most commonly used corporate vehicle in Costa Rica. Shareholder liability is limited. There are no significant capital stock restrictions (foreign currency may be used and the share distribution is also flexible to meet shareholder or investor requirements). SAs are governed by a Board of Directors composed of at least three members (President, Secretary and Treasurer). However, the Board may have as many additional directors as required. The legal representative will always be the President, and there may be additional Board directors appointed as legal representatives. One additional requirement to be observed is the appointment of a Comptroller who cannot be related to the any member of the Board of Directors.
• Sociedad de Responsabilidad Limitada (SRL) – these have an almost identical operation scheme as SAs. The two most significant differences relate to capital requirements and a simpler governance structure. The share capital of an SRL must be denominated in local currency (ie, colones) and must be divided in quotas that are multiples of 100 colones. Regarding corporate governance, the structure of an SRL is much simpler, only requiring the appointment of one General Manager (although the company may appoint additional managers and may establish in its Articles of Incorporation additional advising organs). SRLs do not require the appointment of a Comptroller or a Board of Directors.
• Sucursal – a foreign entity may operate in Costa Rica through a registered branch, without incorporating a new local company. The parent company must grant general power of attorney to a local legal representative and a copy of the parent company’s corporate documents, duly legalised. There are no formal capital requirements. Unlike SRLs and SAs, a branch does not limit the liability of the foreign parent company.

The key factors to assess to determine the appropriate vehicle to use are: (i) limitation of liability; (ii) fiscal matters; (iii) simplicity of governance structure; and (iv) capital stock requirements (eg, some organisations demand that all of its subsidiaries have capital stock reflected in US dollars or euros). There may be additional considerations, such as the requirement to bid for a specific project and whether the offerors can or cannot credit their parent company’s experience. Ultimately, it is essential to clearly define the purpose of the investment and seek local legal advice to determine the most appropriate corporate vehicle to make it possible.

The general guidelines of measures required to incorporate a local subsidiary are as follows.

Define the corporate structure:

• Choose the type of entity (typically SA or SRL).
• Determine shareholders or members, directors (if applicable), and legal representatives.
• Define the corporate purpose, capital structure, and governance rules.

Draft and notarise the Articles of Incorporation:

• A Costa Rican notary public (who also acts as the corporate registrar) prepares and notarises the incorporation deed.
• Both SRLs and SAs require at least two founding shareholders at the time of incorporation.

File with the National Registry:

• The notarised deed is submitted to the Public Registry for registration.

Publication in the Official Gazette:

• A brief summary of the incorporation must be published in the official legal journal (La Gaceta); this step occurs in parallel with registration.

Incorporation:

• Once incorporated, the company is granted a corporate identification number.

The full timeline to execute the incorporation of the company is around one to five calendar days after signing the incorporation public deed.

The obligations below apply to all legal entities, regardless of whether they are commercially active or not.

• Corporate changes – any amendments to the Articles of Incorporation, as well as changes to legal representatives, managers, or members of the Board of Directors, must be executed before a notary public and registered with the Public Registry (Registro Nacional).
• Ultimate beneficial owner (UBO) reporting – Costa Rica maintains an official UBO Registry, administered by the Central Bank. All legal entities are required to:
1. file an annual declaration identifying their ultimate beneficial owners; and
2. report any changes in ownership or control structure that affect UBO information, including certain share transfers.
• Financial Statements – all companies must:
1. maintain proper accounting records, even if they are not commercially active; and
2. approve their annual financial statements through a shareholders’ meeting.
• Other possible obligations that depend on the company’s activities:

1. tax and VAT filings before the Ministry of Finance;
2. social security registration and contributions (Caja Costarricense de Seguro Social);
3. municipal operating licence (patente) filings or renewals; and
4. labour risk insurance (INS) and other sector-specific filings.

Both SAs and SRLs operate under one-tier system but via shareholders agreements to implement schemes that resemble a traditional two-tier system. SAs are governed by a Board of Directors composed of at least three members. The President is the legal representative, although any other director can also be appointed as such. SRLs are governed by one or more General Manager. The General Manager acts as the legal representative of the company.

Costa Rican law establishes clear rules regarding the liability of directors and officers. While the concept of “piercing the corporate veil” is not formally codified, the Costa Rican courts do recognise and apply similar principles in exceptional circumstances.

Directors and officers may be held liable for damages caused to the company or its shareholders, as well as for harm caused to third parties resulting from negligence, willful misconduct, or breach of their duties.

In exceptional cases, courts may “lift the corporate veil” when the legal entity has been used as a fraudulent vehicle – typically with the purpose of evading legal obligations or engaging in unlawful or criminal conduct on behalf of another person or entity.

The Labour Code is the primary legal instrument governing employment relationships in Costa Rica. It sets out mandatory rights and protections for employees, as well as corresponding obligations for employers. The Labour Code includes specific safeguards for vulnerable or protected categories of workers (such as pregnant women, minors, and unionised employees). Its provisions are of public order, meaning that any individual agreement that contradicts or waives these rights is considered null and void.

Individual employment agreements are the standard framework for formalising employment. These may be written or verbal, although written contracts are recommended for evidentiary clarity. The Costa Rican labour system applies the principle of prevalence of practice (principio de primacía de la realidad), which means that actual working conditions prevail over those stated in the written contract if there is a discrepancy between the two.

Jurisprudence from the Second Chamber of the Supreme Court (Sala Segunda) plays a fundamental role in interpreting the Labour Code. It provides binding guidance in areas where the law is ambiguous or silent, and its decisions are frequently relied upon to resolve disputes.

Finally, the Ministry of Labour and Social Security (MTSS) issues binding administrative regulations, such as those related to minimum wages, occupational health and safety, and employment conditions. MTSS labour inspectors are authorised to conduct inspections and impose administrative sanctions for noncompliance with both statutory obligations and MTSS regulations.

Employment contracts can be concluded in writing or verbally, although written contracts are strongly recommended for their legal certainty.

There are some general regulations regarding duration of the employment. Fixed-term contracts are permitted. However, as a general rule subject to certain exceptions, the term cannot exceed one year.

Costa Rica has three different workday types depending on the hours worked: (i) a day shift (between 5:00 and 19:00); (ii) a night shift: (between 19:00 and 5:00); and (iii) a mixed shift – part day shift, part night shift, as long as it does not exceed 3.5 hours of night shift.

The general working time rules are the following:

• day shift ordinary working hours – maximum eight hours per day and 48 hours per week;
• night shift – maximum six hours per day and 36 hours per week; and
• mixed shift – maximum seven hours per day and 42 hours per week.

All employees must receive one rest day per week.

Overtime is compensated at 150% the regular hourly wage. It is capped at four extra hours per day, and the total workday cannot exceed 12 hours of work.

The main exception to overtime rules applies to trusted personnel or management employees (personal de confianza). Depending on their level of autonomy, decision-making power and responsibility, these individuals may be exempt from ordinary working time limits under Costa Rican labour law.

The employment relationship is strongly protected by law and termination must comply with specific legal grounds and procedures. The legal framework provides for five main categories of termination, as follows.

• Dismissal without just cause (employer liability) – employers may terminate an employee at their discretion. In such case, employer must provide advance notice and pay severance.
• Dismissal with just cause (employee liability) – employee may terminate the contract due to a severe breach of obligations of the employee. In such case, employer is not obliged to recognise payment of severance nor advance notice.
• Resignation with just cause (employer liability) – this has practically the same effects as dismissal without just cause.
• Resignation without just cause – the employee must provide notice to the employer.

In all of the above cases, the employee is entitled to receive any unpaid salary obligations, the proportional Christmas bonus up to the date of termination, and unused vacation.

Employee representation is not automatically required in Costa Rica. However, employers must consult employees when certain conditions are met, as follows.

• If employees form a union (sindicato), the employer must recognise this and involve it in matters such as collective bargaining or major workplace decisions.
• An alternative to formal unions in Costa Rica is the creation of Permanent Workers’ Committees. These serve as a communication channel with employer’s management.
• Health and safety committees are mandatory in workplaces with ten or more employees, and the employer must consult with them on workplace safety matters.

Employees pay income tax based on their monthly gross salary. The applicable tariff is progressive and depends on the income generated by the employee, ranging from 0% to 25%. This tax is withheld by the employer.

Employees also pay social security contributions equal to approximately 10.3% of their salary. Employers must also pay around 26.3% of an employee’s salary in the form of social security contributions. In addition to this there are various minor contributions, such as the mandatory labour risk insurance for which rates vary depending on the risk of the relevant industry.

Companies may be subject to taxation in Costa Rica if they are incorporated or domiciled in the country, or if they generate Costa Rican-sourced income, regardless of their country of incorporation.

Taxes Applicable to Companies Incorporated or Registered in Costa Rica

• Legal entity tax – annual flat tax imposed on all companies registered in Costa Rica. This applies to SAs, SRLs and branches and does not depend on whether the company generates income in Costa Rica or not.
• Education and culture stamp; annual tax stamp used to support funding for educational and cultural programmes.

Applicable Taxes to Entities That Generate Income in Costa Rica

Costa Rica applies a territorial tax system, meaning that only income generated within Costa Rica is subject to income tax. Key applicable taxes include the following.

• Income tax – the standard corporate income tax rate is 30%. However, smaller the applicable rate may be lower.
• VAT – the standard VAT rate is 13% and applies to both services and goods. Certain items may be exempt or taxed at reduced rates.
• Withholding tax on payments to non-residents – applies to income generated in Costa Rica but paid to beneficiaries abroad. The local paying entity must withhold and remit the tax to the Tax Authorities. The tax applies to a variety of payments including dividends, royalties, interest and service fees. The applicable rates vary depending on the type of payment.
• Dividend payment – as a general rule, dividend payments are subject to a 15% tax.
• Municipal business licence tax (patente municipal) – companies that operate physical premises (such as offices, factories, or stores) must obtain a business licence from the local municipality. The tax is calculated based on gross income
• Note that there are other less transcendent taxes and levies that companies need to pay.

OECD Pillar Two

As of June 2025, Costa Rica has not implemented Pillar Two of the OECD’s Two-Pillar Solution.

The FTZ Regime is arguably the most well-known and effective investment incentive in Costa Rica, having played a key role in attracting foreign direct investment to the country. It is available to export-oriented companies in sectors such as manufacturing, services and logistics, among others. The regime offers significant tax benefits, including exemptions from corporate income tax, import duties, VAT, and other levies. To qualify, companies must meet minimum thresholds related to investment, employment and operations. The programme is administered and approved by PROCOMER (the Costa Rican Export Promotion Agency).

Tax consolidation is not permitted in Costa Rica.

There are no applicable thin capitalisation rules in Costa Rica. However, interest deductions may be challenged under transfer pricing principles. As such, any high debt-to-equity structure should be assessed on a case-by-case basis to ensure they reflect arm’s length terms and economic substance.

Transfer pricing rules apply to transactions between related entities.

There are several anti-evasion rules. The Costa Rican Tax code contains many of those rules. In 2016, Costa Rica enacted the Law Against Tax Fraud, which represented a significant effort to limit tax evasion. Among some specific anti-evasion rules are the following: the mandatory implementation of electronic invoicing, the Ultimate Beneficiaries Registry, Transfer Pricing rules, and the possibility of the Tax Authority to re-characterise abusive arrangements or agreements between entities.

No content provided in this jurisdiction.

In Costa Rica, mergers and acquisitions (concentrations) are subject to mandatory prior notification to the national competition authority, COPROCOM (Comisión para Promover la Competencia), when certain thresholds are met. This applies to a broad range of transactions that result in a change of control or influence over a business activity.

Notification is mandatory and suspensive (ie, the transaction cannot be completed until clearance is granted) when the following thresholds are met:

• combined threshold – the sum of the parties’ revenues or productive assets exceeds the sum of 30,000 base salaries during the previous fiscal year; and
• individual threshold – at least two of the involved parties have productive assets in Costa Rica or generated revenues in Costa Rica of more than 1,500 base salaries during the last fiscal year.

The process begins with the notification submitted by any of the parties involved in the transaction. Merger review in Costa Rica follows a two-phase structure:

• Phase I involves a preliminary assessment by COPROCOM to determine whether the transaction may give rise to anti-competitive effects. If the concentration is not deemed likely to generate such effects, it is authorised during this phase.
• However, if COPROCOM identifies potential competition concerns, it may either reject the transaction outright or decide to initiate Phase II, depending on the severity of the risks. Phase I typically takes around 45 calendar days.

If the case proceeds to Phase II, the parties must submit more detailed information about the transaction and its potential impact on the market. During this stage, there is also an opportunity for the parties to propose remedies to mitigate the identified concerns. The process concludes with one of the following outcomes: unconditional clearance, clearance subject to remedies, or prohibition of the transaction.

There are two main laws governing anticompetitive practices in Costa Rica:

• Act No 7472 (Consumer Protection and Competition Promotion Act); and
• Act No 9736 (Act for the Strengthening of Competition Authorities), which introduced significant reforms and strengthened enforcement mechanisms.

Broadly speaking, the legal framework distinguishes between two main types of prohibited conduct:

• Cartels or horizontal agreements (referred to in the law as absolute monopolistic practices). These are agreements or coordinated actions between competitors aimed at:
1. fixing prices;
2. allocating markets;
3. rigging bids; or
4. exchanging commercially sensitive information.

These practices are considered illegal per se, meaning that no assessment of their actual or potential market effects is required for them to be deemed unlawful.

• Abuse of dominant position (referred to as relative monopolistic practices). These involve unilateral conduct by firms with substantial market power and will be addressed in detail in the next section.

No content provided in this jurisdiction.

Definition

Under Costa Rican legislation (Law No 6867 on Invention Patents, Industrial Designs, and Utility Models), a patent protects inventions that are the result of human ingenuity and are industrially applicable. These inventions may include products, machines, tools, manufacturing processes, or any creation of the human mind that meets the legal conditions of novelty, inventive step (non-obviousness), and industrial applicability.

The following are not considered inventions:

• discoveries, scientific theories, mathematical methods, and standalone computer programmes;
• purely aesthetic creations, literary and artistic works;
• business schemes, advertising methods, mental activities, and game methods; and
• simple combinations or mixtures of known products or changes in form, use, dimensions, or materials unless they result in a non-obvious industrial outcome.

Exclusions from patent protection:

• inventions whose commercial exploitation must be restricted to protect public order, morality, human or animal health or life, plant preservation, or prevent serious environmental harm;
• diagnostic, surgical, or therapeutic methods for human or animal treatment;
• plants and animals (except non-naturally occurring microorganisms);
• essentially biological processes for producing plants or animals, unless non-biological or microbiological; and

Plant varieties are protected under a separate legal framework.

Term of protection

Patent protection lasts for 20 years from the filing date, whether filed nationally or through the Patent Cooperation Treaty (PCT). Annual maintenance fees are required to keep the patent in force.

The patent holder has the exclusive right to prevent others from making, using, selling or importing the patented invention without their consent.

Additionally, the patent must be exploited in Costa Rica within three years from the grant or filing date (whichever is later), and this exploitation must not be suspended for more than one year.

Registration process

Patent applications must be filed with the Costa Rican Patent Office. The process includes:

• formal examination – the Patent Office verifies the application’s compliance with all formal requirements. If deficiencies are found, the applicant is given 15 working days to correct them;
• publication – the application is published in the Official Gazette; third parties have three months from publication to file oppositions;
• substantive examination – if no oppositions are filed, the Patent Office assesses whether the application meets all legal requirements; and
• grant – if approved, the Patent Office issues a registration certificate and the corresponding grant resolution is published.

Enforcement

Patent rights are enforced through civil actions only since criminal enforcement was repealed in 2008 under Law No 8039.

Patent owners may pursue:

• injunctions (preliminary and permanent);
• compensation for damages;
• seizure, destruction, or withdrawal of infringing goods;
• border measures through customs authorities; and
• actions may be brought before the Administrative Court or Criminal Courts (procedural jurisdiction).

Note that there are no administrative remedies available in Costa Rica for patents.

Definition

A trademark in Costa Rica encompasses any distinctive sign or combination thereof capable of differentiating goods or services. This includes, but is not limited to, words, figures, colours or three-dimensional forms, as well as the presentation or packaging of products. Costa Rica adheres to the Nice International Classification for goods and services.

Term of protection

Trademark protection extends for ten years from the date of registration and is indefinitely renewable for successive ten-year periods.

Registration process

A preliminary trademark search is recommended prior to application, though it is not mandatory and design searches are not officially available. Application submission requires the applicant’s name and address (and place of incorporation for legal entities), the mark’s representation (including translation if applicable), and a list of goods/services classified under the Nice Agreement. Both single-class and multi-class applications are permitted. A notarised power of attorney is required for applicants. The filing fee is USD50. The Trademark Office reviews applications for formal compliance and adherence to legal prohibitions, such as distinctiveness, public order, or potential for confusion. Priority claims under the Paris Convention and status as a famous/notorious mark are considered. Accepted applications are published in the National Gazette, initiating a two-month opposition period for interested third parties. Applicants are granted 15 or 30 days to respond to Trademark Office objections and two months to respond to oppositions. The Trademark Office issues a final decision. Registration is granted upon successful completion of the examination and opposition phases.

Enforcement

Enforcement is primarily governed by Law No 8039 (Intellectual Property Rights Enforcement) and Law No 7472 (Competition and Consumer Defense Law relating to unfair competition involving trademarks). Costa Rican courts interpret these legal provisions. Registration confers exclusive rights and enforceable protection against confusingly similar marks. Limited prior use rights can be claimed for unregistered marks if proven, though the claimant must also file for registration. Interested parties may oppose a trademark application within two months of its publication. A third party may request cancellation if a registered trademark is not used for five consecutive years. Registration can be annulled for incorrect information or procedural violations, initiated by an interested third party or the Trademark Office, within four years of registration. Minor corrections and limitations of goods/services are permissible during application or post-registration. Applications can be divided at any stage, retaining the original filing date.

Remedies

While specific monetary damages are not detailed, enforcement actions typically result in the prevention of registration or use of infringing marks, annulment or cancellation of improperly obtained or unused registrations, and the suspension of proceedings in cases of agreed-upon alternative dispute resolution.

Definition

Under Costa Rican legislation (Law No 6867 on Invention Patents, Industrial Designs, and Utility Models), an industrial design refers to any combination of lines or colours or any three-dimensional shape – whether or not combined with lines or colours – that gives a product of industry or handicraft a distinctive appearance and serves as a pattern for its manufacture.

Length of protection

An industrial design is protected for a non-renewable term of ten years from the filing date.

The owner has the exclusive right to prevent others from using, copying, manufacturing or selling products bearing the protected design without authorisation.

Registration process for industrial designs

• Filing – the industrial design application must be submitted to the Costa Rican Patent Office.
• Formal examination – the Patent Office verifies that all filing requirements are met. If deficiencies are found, the applicant is given 15 working days to respond and correct them.
• Publication – once accepted, the application is published in the Official Gazette. Third parties have three months from the publication date to file oppositions.
• Substantive examination – if no oppositions are filed, the application undergoes substantive examination to determine whether it meets the legal requirements registration.
• Granting – if registerable, the Patent Office issues a certificate of registration and publishes the granting resolution in the Official Gazette.

Remedies and enforcement for industrial designs

In Costa Rica, industrial design rights are enforceable through civil actions only. Criminal actions were eliminated following the repeal of relevant provisions under Law No 8039 in 2008.

Civil remedies

• Injunctions (preliminary and permanent).
• Damages for infringement.
• Seizure, destruction, or withdrawal of infringing goods.
• Border measures through customs authorities.
• Actions may be pursued in the Administrative Court or Criminal Courts (procedural jurisdiction).

Note that no administrative remedies are available for industrial designs in Costa Rica.

Definition

Costa Rican copyright law (Law No 6683) protects “all productions in the literary, scientific and artistic fields, whatever the form of expression”. This broad scope includes, but is not limited to, books, computer programmes, musical and dramatic works, cinematographic works, drawings, paintings, photographs, architectural designs, applied art, maps, and compilations of data or works that demonstrate intellectual creation through selection or arrangement. Derivative works, such as adaptations and translations, are also protected if authorised.

Term of protection

Copyright protection is lifelong for the author. Post-mortem, rights endure for 70 years for legitimate inheritors. In the absence of legal succession, the work enters the public domain.

Registration process

Copyrights are protected from their creation, without mandatory registration. However, registration is recommended for comprehensive protection and enforceable exclusive rights. The Copyright Office is managed by the Costa Rican Public Registry. Individuals, legal entities, trade bodies and foreign applicants may register copyrights. Application requirements include the author’s full qualifications, work title, genre, a brief content description, publication status, and an indication of whether the work is collective or collaborative. A notarised power of attorney is required for representatives. The filing fee is USD5. The registration process is primarily a deposit procedure, focusing on formalities and the presence of originality, which is determined by jurisprudence, requiring creative contribution and individualised expression. If the Copyright Office raises objections, a 15- or 30-day term is granted for the applicant to respond and demonstrate the work’s eligibility for protection.

Enforcement

Copyrights are enforced primarily under Law No 6683 (Copyright and Related Rights Law) and Law No 8039 (Intellectual Property Rights Enforcement). Authors retain inalienable, unrenounceable, and perpetual moral rights over their work, including the right to claim authorship, oppose distortion, and, under certain conditions, withdraw the work from circulation. Economic rights, which can be transmitted (including upon death), pertain to the exploitation of the work. Collective Management Societies (eg, ACAM, AIE Costa Rica, FONOTICA) are authorised to protect patrimonial rights, collect and distribute royalties on behalf of authors and rights holders. They can also grant licences and establish tariffs. Enforcement against prior fraudulent registrations can be challenging due to inconsistent criteria.

Remedies

While specific monetary damages are not detailed, copyright enforcement actions typically include administrative and judicial proceedings to protect against infringement, the author’s right to oppose modifications prejudicial to their honour or reputation, and the right to withdraw the work from circulation (with compensation to affected parties). Actions may also be undertaken by Collective Management Societies to assert rights and manage licensing.

Software and databases are protected under copyright law. When trade secrets or other sensitive commercial information must be disclosed, it is standard practice to enter into a confidentiality agreement that sets out clear obligations and remedies in the event of a breach. Such clauses are also commonly included in employment agreements, particularly for high-trust positions.

In Costa Rica, the Data Protection Regime is grounded in the Constitutional right to privacy, honour, and personal image, as enshrined in Article 24 of the Political Constitution, and further reinforced by jurisprudence of the Constitutional Chamber (Sala Constitucional).

The key constitutional principles that flow from this right are as follows.

• Right to privacy – individuals have the right to control the collection, use and disclosure of their personal data. This includes the right to prevent unauthorised access to personal information held by public or private entities.
• Consent principle – processing of personal data must be based on the informed, free and express consent of the data subject, except in limited cases defined by law (eg, public interest or legal obligations).
• Purpose limitation – personal data must only be collected and used for specific, legitimate and previously informed purposes. Use for other, incompatible purposes is prohibited unless new consent is obtained.
• Data quality and accuracy – controllers must ensure that personal data is accurate, complete and updated, and provide mechanisms for individuals to access and correct their data.
• Security and confidentiality – both public and private entities are constitutionally obligated to adopt technical and organisational measures to safeguard personal data against loss, unauthorised access or alteration.
• Right of access and rectification – individuals have the constitutional right to access their personal data and request its correction, deletion or blocking when it is incorrect or being misused.
• Proportionality and necessity – any interference with personal data must be proportionate and necessary, particularly in the case of state surveillance or public interest data processing.

At legal level, the data protection regime is primarily based on Act No 8968 Personal Data Protection Act adopted in 2011, effective 7 July 2012, and regulated by Executive Decree No 37554-JP and its amendments.

Key features include the following.

• Definitions of personal and sensitive data, requiring explicit consent before processing.
• Obligations for controllers – consent, data accuracy, confidentiality, security measures, subject rights (access, rectification, deletion), breach notification within five business days, and registration of databases with PRODHAB when sharing or commercialising data.
• Registration obligations will not apply to databases maintained by natural or legal persons, whether public or private, for exclusively internal, personal, or domestic purposes, provided that such databases are not commercialised in any way.

Law No 8968 applies to any processing of personal data that occurs within Costa Rica’s territory or under contractual or international law frameworks invoking Costa Rican law. It also applies to manual and automated databases owned by foreign companies when their data-processing activities affect individuals in Costa Rica.

Any international transfer of personal data requires the data subject’s prior, express, unequivocal and valid written consent, unless a specific legal exception applies. Transfers must not violate the fundamental principles and rights laid out in Law 8968.

Transfers to service providers, technological intermediaries or entities within the same corporate group are not considered “transfers”, and thus do not require separate consent.

PRODHAB (Data Protection Agency) serves as Costa Rica’s national data protection authority, established by Law No 8968. It has the authority to:

• register databases used for disclosure or commercial purposes;
• receive and process complaints, initiate enforcement actions, and impose administrative fines or temporarily suspend database operations; and
• require breach notifications from controllers and take corrective measures.

Organisations must register any databases that involve disclosure or commercialisation of personal data.

There has been a significant reform in Costa Rica’s virtual tax systems, originally expected to be implemented between July and August. The reform aims to consolidate the Tax Authority’s digital platforms to enhance efficiency and strengthen controls against tax evasion. This change requires all users to migrate their information from the previous system (ATV) to the new platform (TRIBU) and fulfil certain tax obligations prior to the official migration date. However, recent uncertainty has arisen following a resolution from the Administrative Courts, which granted a precautionary measure preventing the deactivation of the ATV platform.

In the field of labour law, the main draft bill under discussion proposes the establishment of a work schedule consisting of four 12-hour workdays followed by three full days off. The schedule would vary for night shifts. This bill has generated substantial controversy and resistance in Congress, and its approval remains uncertain.