Crisis 2009

Doing business in Costa Rica

February 2009

Prologue

This document has been prepared with the purpose of providing a clear view of investment opportunities to foreign investors interested in establishing business concerns in Costa Rica and consequently, how to become an active participant therein. This guide shows a general outlook of Costa Rica as of February 2009, including itsprimary characteristics such as geography, history, population, language, natural resources, institutions, economic outlook and government system. It also includes regulatory issues pertaining to laws and applicable taxes regarding foreign investment. Our purpose is to provide useful information to investors, exporters and importers, whilst offering a general view of those issues particularly relevantto investment or business decision-making process. With this valuable information tool Deloitte wishes to extend a helpful hand to foreign investors by providing them with a sample of Costa Rican hospitality and its friendly business and solid investment environment. Our foremost intent is to convey commitment with our model of excellence and generate the adequate trust in regard to theprofessional level and the quality of the services available in Costa Rica. Our country is a place of opportunities and Costa Ricans will not be only supportive but also trustworthy allies throughout an enduring business relationship. We recommend those interested in getting acquainted with further business opportunities or specific information to seek qualified, professional assistance. At Deloitte we canassist you with solutions and the necessary inputs for your decision-making process pursuant to your particular needs and those responding to your business interests.

Alan Saborío Managing Partner Deloitte & Touche, S.A.

Contents

February 2009 About Deloitte Touche Tohmatsu We are LATCO Deloitte Costa Rica Our professional services Audit Management Consulting Enterprise Risk Services (ERS)Outsourcing Tax Services Financial Advisory Services (FAS) Introduction General Outlook Population and Language Medical Services Education Professional Level of Costa Ricans According to Transnational Companies Climate Transportation Communications System of Government The Legislative Power (Congress) The Executive Branch The Judicial Branch Supreme Tribunal of Elections Bodies Related to theGovernment Banking System State Banks Private Banks Activities of Public and Private Banks Offshore Banking Economy Currency Chief Economic Pointers Production and Employment External Sector Evolutions of Costa Rica’s Exports Costa Rica’s Imports Evolution Public Finances Foreign Investment in Costa Rica Devaluation Policy and Expected Inflation Rate Leading Activities Agriculture Plastics IndustryMetal-Mechanic Industry

1 9 9 9 10 10 10 11 11 11 12 13 13 14 14 15 15 15 16 16 17 17 17 17 17 17 18 18 18 18 19 19 19 19 19 20 21 21 23 23 24 24 24 25 25

Fishing Industry 25 Processed Foods 25 Tourism 26 Forming a company in Costa Rica 29 General Comments 29 Types of Companies commonly used in Costa Rica. 29 Limit Liability Company. ("Sociedad de Responsabilidad Limitada" (“SRL”) in Spanish)29 Corporation (“Sociedad Anónima” or “S.A.” in Spanish) 29 Formation Requirements 30 Company Articles of Incorporation 30 Required Elements 30 Branch Offices of Foreign Companies 33 Franchises 33 The Trust 33 Real Estate property 35 Real Estate Property Ownership by Foreign Nationals 35 Maritime-Land Zone Concessions 35 Condominiums 35 Property Recordation Requirements 36 Real Estate Brokers 36Immigration regulations 37 Entry and Residence Visas 37 Categories 37 Extensions of resident visas 37 Residence 38 Permanent Residence 38 Temporary Residence for Labor Purposes 38 Temporary Residence under the Investor Status 38 Temporary Residence as Retiree (individuals entitled to pension) 39 39 Temporary Residence as “Rentista” (individuals living off their investments) Acknowledgment of a...