Costa Rica Gambling License

Costa Rica is a Central American country with laws based on French and Spanish civil law traditions. Currently, the gambling industry is neither regulated nor permitted to offer services within the Costa Rican territory but it still has several hundred registered gambling businesses offering services everywhere else in the world. This jurisdiction is valued by startups and small businesses looking to test and iterate a new business idea at the lowest costs in a flexible business environment.

In spite of the absence of a regulatory framework for gambling businesses, Costa Rica is still considered a trusted jurisdiction. It’s a member of the Organization for Economic Co-operation and Development (OECD) which is an indication that there’s compliance with international standards, also enforced across the richest economies. Investors and clients generally trust businesses registered in OECD member countries due to their commitment to the best business practices and regulatory policies.

Costa Rica isn’t on the Financial Action Task Force (FATF) List of Countries that have been identified as having strategic AML deficiencies, which also makes it a trustworthy jurisdiction. According to FATF’s Mutual Evaluation Report on the AML/CFT standards in Costa Rica, it’s a largely compliant jurisdiction. FATF reports that Costa Rica continues to make significant progress in addressing the technical compliance and other deficiencies identified during the evaluation. Therefore, you should be assured that running a generally unregulated gambling business from Costa Rica can gain the trust of players across the world.

Advantages of Running a Costa Rican Gambling Company

Costa Rica has a stable economy and an investment-friendly environment where there are low levels of crime which provides entrepreneurs with the assurance that their business won’t face unexpected policy changes or damages. Also, this country isn’t considered an offshore jurisdiction, and therefore having a Costa Rican business won’t close doors to working with partners in the US or other prosperous countries.

Since the Costa Rican government isn’t actively involved in the regulation of gambling businesses, you would be able to use this jurisdiction as a sandbox where your business concept could be tested, iterated, and perfected to eventually satisfy regulatory requirements in a jurisdiction where there is a license for more mature gambling businesses. There are no stringent obligations that would impose huge fees, or restrict experimenting with the gambling business and making dynamic decisions.

Also, you’ll be pleased to learn that in Costa Rica, there are no gambling taxes. Income generated outside of Costa Rica isn’t taxed and since gambling businesses aren’t permitted to sell their services to residents of Costa Rica, no corporation tax is applicable. Costa Rica deducts tax at source on dividends remitted out of Costa Rica at the rate of 15% in the case of registered shares and at the rate of 5% in the case of bearer shares. Costa Rica has agreements on the elimination of double taxation with Germany, Mexico, and Spain which ensure fair taxation of dividends, interest, and advisory services across the signatory parties.

A Costa Rican gambling company is permitted to offer payment methods involving such cryptocurrencies as Bitcoin or Ethereum which means it’s possible to run a crypto casino business, the type of online gambling activities that are rising in popularity. Due to blockchain-enabled layers of security, crypto casinos are often considered a safer option than gambling with fiat currencies which is one of the reasons the market of online casinos is growing.

Compared to jurisdictions with a robust regulatory framework, Costa Rica boasts plenty of other advantages that are worth mentioning. There are no requirements to test gambling software which creates a low entry barrier. The due diligence requirements are minimal and there is no need to prepare a heap of detailed documents for the regulator which significantly speeds up the process of establishing a fully operational gambling company.

Advantages

Gambling Regulations in Costa Rica

In Costa Rica, there is no regulatory framework and no supervising authority dedicated solely to gambling businesses. Local government authorities (municipalities, or city halls) are responsible for the general supervision of gambling businesses and aim to ensure that they comply with general local legislation. Costa Rican laws don’t permit Costa Rican residents to engage in online gambling activities, and land-based casinos are allowed within hotel premises.

Pursuant to the national laws of Costa Rica, online gambling is an activity that takes place where transactions between players and operators are processed, i.e. where players are based, and not at the location where the gambling operator is based. Therefore, online gambling businesses can operate from Costa Rica as long as their transactions aren’t processed by Costa Rican banks and they don’t offer gambling activities to Costa Rican residents. Such entrepreneurs can establish a gambling business in Costa Rica in order to target gamers outside of the country and in such cases they’re obligated to comply with general legislation.

The following legislation is applicable:

• National Anti-Money Laundering Regulations
• Unusual Transactions Act
• Counter-Terrorism Financing Regulations
• Know-Your-Customer (KYC) Policies
• The Criminal Code
• The Code of Commerce

Top online casinos in Costa Rica

Data Processing License for a Gambling Company in Costa Rica

In Costa Rica, there is no Gambling License but to be able to run a gambling business from Costa Rica, you’ll need a Data Processing License. It merely indicates that the authorized company is able to process data. The license is granted by the local government authority which is the municipality. The Data Processing License will allow you to host servers in Costa Rica, run such activities as crypto casinos, online poker, online slots, sports betting, and others, as well as provide gambling software services to gambling businesses.

The Data Processing License allows for 2 types of office leases:

• Permanent – used when you need to keep the license permanently and in this case, the leasing of the office should be paid annually to maintain the office space
• Temporary – the same as permanent, only the office is leased for 6 months in order to obtain the license, and once the license is issued, the client stops renting the office space

Requirements for Costa Rica’s Data Processing License Applicants

To obtain a Data Processing License for your gambling business, you should first establish a company in Costa Rica. To do so, you can’t be a citizen of Costa Rica or another country where online casinos are illegal or require a local license, and you can’t offer gambling services or sell gambling activities to residents of Costa Rica or other countries where gambling isn’t permitted.

To avoid non-compliance, you must make it clear at the time of incorporation that the goal of the company is to sell online gambling services outside of Costa Rica. Additionally, you should block IP addresses in those countries to prevent their residents from accessing your gambling website.

You should also note that the host server of the casino site and its entire data must be physically present in Costa Rica, as well as a registered local office which will also determine which municipality you’ll need a Data Processing License from. Licensing requirements may slightly vary in different municipalities. If you wish to identify the most suitable Costa Rican municipality for your gambling business, please reach out to our team here at Regulated United Europe and we’ll arrange a personalized consultation for you.

How to Establish a Gambling Company in Costa Rica

In Costa Rica, there are a variety of types of business legal structures that serve different business models. The process of incorporation takes 2-3 weeks which includes the preparation of documents.

One important thing to note is that the absence of a gambling regulatory framework and a license means that Costa Rican gambling companies aren’t permitted to open a merchant account and partner with conventional payment processing companies facilitating such payments as credit cards in Costa Rica. Banks in Costa Rica don’t allow unregulated gambling companies to open accounts with them. If your goal is to open a crypto-based gambling business that is among the most popular online gaming trends, read on as a Costa Rican company is among the most viable solutions.

Pursuant to the Code of Commerce (1964), you can choose from the following types of legal business structures: 

• Corporation (Sociedad Anónima)
• Limited Liability Company (Sociedad de Responsabilidad Limitada)
• Joint Stock Company (Sociedad en Comandita por Acciones)
• Individual Limited Liability Company (Empresa Individual de Responsabilidad Limitada)
• General Partnership (Sociedad en Nombre Colectivo)
• Limited Partnership (Sociedad en Comandita Simple)

There are several significant benefits of incorporating a Corporation or Limited Liability Company in Costa Rica:

• No initial authorized share capital requirements
• No limitations in relation to company shareholders – non-residents can own 100% of the company
• No restrictions or high requirements for directors
• Very swift company formation process
• Low company formation costs
• It’s ideal for crypto gambling businesses as according to the law, the minimum wage must be paid in fiat currency, but anything exceeding the minimum wage can be paid in virtual currencies

Key requirements for a Costa Rican company:

• The company must have either a legal representative or a local registration agent
• At least 2 shareholders
• A local office in Costa Rica

A legal representative acts on behalf of the company in legal situations and is a signatory for all operational activities. They are responsible for ensuring the good standing and smooth operations of the company. A legal representative is personally liable for any legal issues related to the company.

To be eligible for the position, a person must be either a Costa Rican citizen or a foreigner holding a valid Costa Rica visa. If the company’s legal representative isn’t a resident of Costa Rica, such a company must appoint a resident agent who must be a Costa Rican lawyer residing in Costa Rica and whose responsibility would be to receive legal and administrative notifications.

To incorporate a company, you should prepare the following documents:

• Notarized Articles of Incorporation
• Notarized powers of attorney for the company registration granted in front of a Costa Rican notary
• Notarized photocopies of the passports of shareholders and directors
• Certificates of authorized residence from the Costa Rican Immigration Department if the founders are foreigners
• Proof of office address in Costa Rica (office lease contract)
• Health permit from the Ministry of Health in Costa Rica
• Workers insurance policy

The official national language of Costa Rica is Spanish and therefore you should prepare documents in the Spanish language. If you require sworn translation services, reach out to our team here at Regulated United Europe and we’ll be delighted to find the most time- and cost-effective solution for you.

Once you’ve chosen a legal structure for your company, the main steps of establishing a company in Costa Rica will be as follows:

• Check and reserve a compliant company name
• Prepare all the required documentation
• Open a trading account with a foreign bank for business transactions
• Go through the checks of due diligence of involved persons
• Pay company formation fees
• Submit an application to the Costa Rican Registry of Legal Entities
• Register a shareholders’ agreement in the Costa Rican Registry of Legal Entities
• Register with the tax authorities by filing a D-140 form and obtain a unique tax identification number (Número de Identificación Tributaria or NIT) for the company
• In line with OECD standards, file the Ultimate Beneficial Owner (UBO) Declaration with the Central Bank of Costa Rica
• Register your company as an employer with the Costa Rican Social Security Agency
• Apply for national insurance and occupation risk insurance

Once the documents are submitted to the Registry, it takes 24-48 hours to have a new company registered which is very efficient compared to other jurisdictions.

You should also bear in mind that the Ultimate Beneficial Owner (UBO) Declaration includes identity details, contact information, capital, types of shares, and the number of shares held. The registry platform is secure and not available to the public.

The shareholders’ agreement should include the following:

• Details about the appointment of a legal representative
• Objectives, details on capital, and competent senior managers of the company
• An express declaration of submission to the Costa Rican law

All documents are validated by the Consulate of Costa Rica in the country of origin and registered in Costa Rica in order to acquire the local legal certificate.

GAMBLING LICENSE IN COSTA RICA

Why You Should Start a Crypto Casino in Costa Rica

A crypto casino is an online gambling platform that accepts cryptocurrency transactions, including depositing, paying with, and withdrawing cryptocurrencies. Having a crypto casino provides an opportunity to access new audiences and markets as this online gaming trend is still growing and its potential hasn’t been fully realized.

Crypto casinos boast the following benefits:

• Access to a global customer base
• Fast and secure transactions
• Low transaction fees
• A wider variety of games that attract an increasing number of players

In addition to the usual company formation steps, you’ll have to choose a reliable gaming software provider and integrate a crypto payment system. Although Costa Rican local authorities don’t have any requirements for gambling software, you should dedicate some time to lay down the technological foundations that will deliver good user experiences and won’t cause any legal issues. We can advise you on all legal matters in the process of setting up a crypto casino which will make your company formation journey frictionless and clear.

How to Apply for a License in Costa Rica

Once you’ve established a company in Costa Rica, you can apply for a Data Processing License, granted by the local municipality. Provided that you have all the documents prepared, the process is straightforward and may take around 5 business days. The documents include Articles of Incorporation, a business plan, and identification documents of the shareholders and directors.

The essential steps of obtaining a Data Processing License are as follows:

• In addition to the usual corporate documents, prepare the evidence that your company has internal AML/CFT procedures and policies in line with relevant legislation
• You should submit an electronic application to the local municipality in the Spanish language
• The municipality may inspect your gambling business based on general criteria to ensure regular business standards are met

Basic Requirements for License Holders

Costa Rican companies are obligated to comply with general legislation concerning the operations of any business since there are no gambling-specific requirements. The general requirements are fairly thorough but as manageable as in other similar jurisdictions. The local government authority conducts compliance audits on a regular basis in order to ensure that gambling companies comply with all the terms of the granted license.

Importantly, Costa Rican gambling businesses are obligated to comply with national AML/CFT legislation. The essential AML/CFT rules are similar to those in other OECD jurisdictions where liable businesses should demonstrate their capability to keep client identification records, monitor clients for money laundering and terrorist financing, as well as report suspicious transactions to competent authorities. For instance, Costa Rican gambling businesses must adopt the know-your-client (KYC) policy as a set of procedures and guidelines so that they can effectively identify their clients as well as verify and monitor the financial operations in which they participate, in relation to the risks and practices of money laundering and financing of terrorism that they pose.

You should bear in mind that Costa Rican gambling companies must keep accounting records in line with national legislation. Pursuant to the Commercial Code, the accounting records must be kept in the Spanish language. The accounting records must include a general ledger, daily journal, inventory, and daily results. It’s also mandatory to keep a book of minutes of the shareholders’ meetings and a register of shareholders’ books in the Spanish language.

Costa Rican gambling companies must also maintain a complete audit trail for each player making a deposit with an operator, including financial transactions and individual bets. Gaming systems, including back-end software logs, must be accessible to third-party auditors. Gaming rules, results of the games, and pay-out are to be made available to the local government authority for 5 years.

Overall, since Costa Rican gambling businesses are unregulated, there are no stringent requirements for advertising, responsible gambling, or other related practices which are common in the jurisdictions that have a gambling license and a robust regulatory framework. This approach creates a flexible environment for gambling businesses that are only starting out or are testing and iterating their business idea.

Our team here at Regulated United Europe will be delighted to support you in incorporating a company and obtaining an equivalent of a gambling license in Costa Rica. With dedicated legal advisors, tax experts, and financial accountants at your side, you will find the incorporation and application processes easy, frictionless, and transparent. Contact us now to schedule a personalized consultation and set the stage for long-lasting success.

Also, lawyers from Regulated United Europe provide legal services for obtaining a crypto license.