Financial Crime World

Costa Rica’s M&A Landscape: Key Considerations for Businesses

With a growing economy and favorable business environment, Costa Rica has become an attractive destination for mergers and acquisitions (M&As) in the region. However, navigating the complexities of M&A transactions in Costa Rica requires careful consideration of regulatory requirements, employee rights, and other key factors.

Regulatory Requirements

Companies participating in M&As in Costa Rica must file for approval with the relevant authorities whenever the transaction volume exceeds certain thresholds established by applicable regulations. The information submitted with the application will determine whether the merger or acquisition is deemed valid and effective.

Good Faith Negotiations

The principle of good faith informs all rules about doing business in Costa Rica, including M&A transactions. This means that parties involved in a deal must negotiate in good faith and act reasonably to ensure a successful transaction.

Employee Protections

Employees of companies being acquired by a third party are protected under Costa Rican law, and their rights are safeguarded even if there is a change of ownership. The new owner is bound to honor all labor rights of the acquired company and is jointly liable with the seller for any employment liabilities.

Foreign Direct Investment

Costa Rica welcomes foreign direct investment, except in certain sectors such as mining, hydrocarbon exploration, and real estate ownership at the coastline.

Exchange Control Requirements

There are no exchange control requirements in Costa Rica, making it easy for international investors to transfer funds into the country.

Winding Up a Company

Liquidating and dissolving a company in Costa Rica requires specific procedures under the Code of Commerce. This includes:

  • Calling an extraordinary general meeting of partners or shareholders
  • Preparing special financial statements
  • Publishing notices in the Official Gazette and local newspapers

Getting Further Guidance

For further guidance on M&A transactions in Costa Rica, contact:

Disclaimer

This communication contains general information only and is not intended as professional advice. Before making any decision or taking any action that may affect your finances or business, you should consult a qualified professional adviser.

Deloitte Costa Rica refers to one or more of Deloitte Touche Tohmatsu Limited, its global network of member firms, and their related entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.