CocoSmart

Setting up a Business in Costa Rica.

This is not a "how to" formula, but just a synopsis of how we did it. Perhaps not a synopsis, as this page has grown and grown and is longer than I expected it to be - sorry readers!

It has not been an easy task. It certainly has not been a quick process. The amount of paperwork is unbelievable. 

Firstly, we consulted with our lawyer, Romulo, on the best way to structure our business; we opted for the most common, the 'Sociedad Anomina'; similar to European corporations in that it offers comparable benefits and protections. The company was officially formed by Romulo, with DH as President and myself as Secretary. The name of the corporation is COCO SMART; sticking to what he knows, DH plans to be a mobile car refinisher, Smart repairs to be exact, a trade that is non-existent here in Costa Rica. However, the next step for Romulo was to register the corporation with the Public Registry. A simple task, you would think, but one that we spent two weeks chasing up as he appeared to have a bad case of the "mananas".

Whilst we waited for the registration documents, to keep things on the move and be ready for the next procedure, we tried to find an accountant - another challenge: the one highly recommended by Mari (she with the extremely short skirt), not only turned up 10 minutes late, but strolled into the office chewing gum and listening to his Ipod. It seems that most white collar workers here in Coco wear flip flops and shorts, so we didn't hold that against him but ... he planned to charge us $450 to open up a business bank account!!!! I thought at one point DH was going to climb across the table and take the guy by the neck, as he just wouldn't give a straight answer to any of our questions. He then introduced us to a lawyer that he thought might be able to assist us in the future; he didn't look much older than ES and only slightly more capable (is this another sign of the ageing process?). We left the meeting place saying we would get back to him. We won't.

Romulo eventually contacted us when he had all the documents in his possession, but he refused to post them! OK, this might not be a bad thing, what with the lack of Postmen Pat's here in Costa Rica, plus the absence of street names, but he even refused to dispatch via DHL. Instead we had to make the 8 hour round trip to San Jose to collect the files and documentation. Joy of joys, but at least it meant that we were one step closer to working. In fact Romulo informed us that all we needed to do now was to register for Tax and Vat, open up the bank account and then we could start work. Great.

Monday morning. We drive to Liberia and offer ourselves to the Ministerio de Hacienda (the tax office) begging them to let us register our business and allow us to pay Tax and Vat! Strange setting, the Hacienda, as it is on the third floor of a shopping mall, next to the cinema.

Liberia's out-of-town Shopping Mall

Helpful security guard, jolly and round with a flat head and a gun, opens the door and fetches a ticket for us, from a red ticket machine similar to the ones in Russell and
Bromleys children's shoe department. Very kind but perhaps unnecessary as we are the only people waiting to be seen. Our number is called, helpful security guard shows us to the desk and DH converses with yet another very young bureaucrat. As is so often the way in Costa Rica, we need just one more item before we can register and young office worker directs us to the BCR (Banco Costa Rica) to get our stamps - yes, stamps: they look just like postage stamps and I really am not sure what they are for and why we need them, but hey-ho. Jolly security guard quickly gulps his water down and waddles to door to open it for us.

The BCR in Liberia has three armed guards monitoring the people entering the vast, ugly  concrete building. Got to love the address on the web-page though - 'North side of the Catholic Church, Liberia, Guanacaste'. In order to locate the bank, you need to know where the church is, which as you can see is another vast, ugly, concrete building.

The Catholic Church in Liberia

Upon entering the BCR, all that can be seen is a sea of people; the queue is lengthy; a spiraling snake of Ticos. Luckily, the stamp collection point is on the second floor, where the queue is a great deal shorter. Stamps are handed over by the teller and then we are directed to another queue to wait for the clerk to issue yet more paperwork to correspond with the stamps. An unnecessary paper trail I am sure, but when in Rome ...

Back to the Hacienda. Once again, helpful, jolly security guard opens the door and secures us a ticket while we take a seat. We are not kept waiting long before we are seen by a canine-loving maturer gentleman. I know he loves dogs as he has more than a few statuettes of various breeds on his desk: odd? All conversations are undertaken in Spanish and within 15-20 minutes, the business is registered to pay Tax and Vat. Another difference between CR and UK is that every month, by the 15th, all business accountancy books must be presented to the Hacienda for the tax, if any, to be paid. No end-of-year panic attacks, trying to collate all receipts for income and expenses for the last year. Just a bit more organisation will be required  - from me.

All seems to be going well, having only taken a couple of hours, quicker than buying car insurance  So we head off to our bank in Coco, with the aim of opening up a business account. How difficult can it be? Certainly not $450 dollars worth of difficulty surely? Well, maybe, as this is where it gets even more complicated, requiring a long list of even more paperwork: in addition to copies and certifications of various corporate documents, the bank requires professional references and accountancy letters. Another obstacle. Where can we get professional references in CR, we don't really know anyone in a professional capacity. Plus we have yet to find a suitable accountant.

While we consider our options, we visit the Municipality in Liberia to press on with other paperwork requirements.

The Municipality in Liberia

More forms are presented to us, meaning more paperwork to complete. DH admits defeat to the lady behind the desk and she very kindly points us in the direction of an ex-colleague of hers that may be able to help us in our quest. The address of where we may locate this lady? 200 metres north and 100 metres east! WTF! Which bloody way is north??? After about fifteen minutes driving up and down various one way streets and not finding any offices with the correct signage, DH calls the woman whose name is Berlei: yes she can see the truck, can we see her waving? Fantastic, we have found her, but where is her office? In what looks like a gated alleyway between a skateboard shop and a juice bar: no signage to be seen, so how on earth we or anyone else for that matter, were supposed to find her, I am not sure. 

But find her we did, and what a find! Yes, no problem to all the requests that we have; find an accountant, produce a cash flow projection, get a reference from a solicitor, proceed with getting a licence from health and safety, fill out the numerous forms we have been given. She even took us to a local printing firm to begin the process if having 'factura's' printed - receipt book, without which you simply can not trade! She ferries us here there and everywhere getting all things sorted almost there and then! 

Berlei the Brilliant!

Well almost. The accountant Berlei found failed to deliver the goods. After contacting us at 9pm on a Friday night to discuss figures, 10 days later he still had not produced the information we needed to open the bank account. Why can't people just say they don't want the work instead of leading you on and promising all will be done in the shortest possible time! Grrr! So, accountant number three then (a woman). And as they say, third time lucky and required letters were in our hands within two days. 

Next problem was with the printing shop. DH and I spent ages pretending to be graphic designers, drinking coffee in cafés, beer in bars, trying to design a company logo; getting the message across in few words, funky fonts and a fabulous colour is harder than it looks! But we did it and were happy with our attempt. The printing shop agreed it could all be done, facturas and business cards, all within a five days. Guess what? Five days later, they hadn't done it! Couldn't get the logo. So tried again, simplified logo and a couple of days later they still hadn't started ... This time, they were unable to replicate the font! 

So we hunt out a second printing firm; logo ok, font ok, colour ok and we start the process a-new with them. A week later and we still have no business cards! So what to do now, another firm or stick with them? Just fed up of people saying yes, when really they mean ...?

It has taken nearly seven weeks of to-ing  and fro-ing. We have destroyed our own mini rainforest with the amount of paper that has been required of us. But at last, finally, like happy little bunnies, we head to the bank to open the Coco Smart business account. Naturally yet more forms are filled in, more signatures are scribbled and more photocopies of every single item of paperwork are taken. It takes over an hour, but eventually it is done. I can send DH back out to work! In a few days time the business cheque books and cards will be ready to collect (I wonder if mine will state 'Mujer' again?). 

Then we have to try and get a credit card machine ... I think that may need a whole blog of its own perhaps?