Registration of Shareholders in Costa Rica

Background: Fiscal Pressure and International Commitments

As many readers are aware, Costa Rica has faced a sustained public debt challenge and has pursued multiple strategies to increase state revenue. Among these measures are enhanced controls on corporate taxation and greater transparency regarding business ownership. These initiatives also align with Costa Rica’s efforts to join the Organisation for Economic Co-operation and Development, a process that requires the adoption and implementation of regulations aimed at combating corruption, money laundering, and the financing of terrorism.

At the time these measures were introduced, Costa Rica was considered to be on a “gray list” with respect to compliance and anti-corruption standards. The legislative and regulatory reforms discussed here were part of a broader effort to avoid blacklisting and to progress toward full international compliance.

Existing Compliance Obligations and SUGEF Registration

Some sectors were already familiar with enhanced disclosure requirements. Prior legislation required a number of professionals and businesses to register with Superintendencia General de Entidades Financieras (SUGEF), the banking and financial supervision authority.

This registration applied to, among others:

• Notary publics

• Accountants

• Attorneys

• Real estate professionals

• Jewelers

• Other individuals and entities deemed relevant in the prevention of money laundering and terrorist financing

SUGEF operates as a subdivision of the Central Bank, and its registry system established an early precedent for collecting ownership and compliance-related data.

The Transparency and Ultimate Beneficial Owner Registry

In parallel with SUGEF requirements, Costa Rica began developing what is commonly referred to as the Transparency and Ultimate Beneficial Owner Registry. The objective of this initiative is to create a centralized database identifying who owns more than 15% of the shares of a given entity.

Importantly, the scope of this registry is not limited to traditional corporations. The stated goal is to include other legal entities and, in some cases, unregistered partnerships, where beneficial ownership may otherwise be difficult to trace.

The registry is intended to support three principal objectives:

1. The fight against money laundering

2. The prevention of terrorist financing

3. The control of tax fraud

Agencies Involved and Institutional Roles

Two primary government bodies are involved in the use of the information collected through the registry:

• The Instituto Costarricense sobre Drogas (ICD)

• The Ministerio de Hacienda

In addition, the Banco Central de Costa Rica assumed responsibility for developing and maintaining the technological infrastructure required for the collection and storage of shareholder and beneficial ownership information.

Because SUGEF is itself a subdivision of the Central Bank, the technical overlap between existing SUGEF data and the new Transparency Registry was expected to facilitate implementation.

Access to Information and Legal Safeguards

Under the framework described, shareholder and beneficial ownership information is not freely accessible. When either the ICD or the Revenue Service has a justified need for such information, the request must be submitted in writing to the Central Bank.

The Central Bank then evaluates the validity of the request and provides the information strictly in accordance with applicable legal regulations. This process reflects an attempt to balance transparency and enforcement with data protection and due process considerations.

Timeline and Initial Scope of Application

The obligation to declare shareholders and ultimate beneficial owners was initially scheduled to take effect in March 2019. As noted in prior discussions, this deadline was postponed to September 2019. At the time, industry participants expressed skepticism regarding whether implementation would occur as scheduled or whether additional moratoriums would be granted.

The initial phase of the registry was designed to apply primarily to registered mercantile corporations. These include, most commonly:

• Sociedades Anónimas (S.A.)

• Sociedades de Responsabilidad Limitada (S.R.L.)

This limitation was justified both by the scale of the task and by the fact that such entities are already clearly identified and recorded in the National Registry.

Legal Basis: Law 9416 and Executive Regulations

The Shareholder Registry finds its legal foundation in Law No. 9416, known as the Improvement of the Fight Against Tax Fraud Act. The obligation appears as early as Section 5 of that statute and addresses:

• The competent authorities

• The information required

• The entities and individuals subject to disclosure

• The reporting process

• Penalties for non-compliance

Further detail was provided through Executive Order No. 41040-H, Regulations for the Shareholder and Ultimate Beneficial Owners Registry, which elaborated on procedural and operational aspects of compliance.

Outstanding Regulatory Challenges

One of the principal reasons cited for delays in implementation was the absence of additional coordinating regulations. These were required to be issued jointly by multiple government entities in order to align enforcement, data handling, and procedural standards.

As a result, full implementation depended not only on statutory authority but also on inter-agency coordination and regulatory clarity. At the time, the practical operation of the registry remained contingent on these unresolved issues.

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