Doing Business 2018 Costa Rica
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Doing Business 2018 Costa Rica
Page 1
Doing Business 2018 Costa Rica
Economy Profile of Costa Rica
Doing Business 2018 Indicators
(in order of appearance in the document)
Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company
Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality
control and safety mechanisms in the construction permitting system
Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the
electricity supply and the transparency of tariffs
Registering property Procedures, time and cost to transfer a property and the quality of the land administration
system
Getting credit Movable collateral laws and credit information systems
Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance
Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-
filing processes
Trading across borders Time and cost to export the product of comparative advantage and import auto parts
Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes
Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the
legal framework for insolvency
Labor market regulation Flexibility in employment regulation and aspects of job quality
Page 2Doing Business 2018 Costa Rica
About Doing Business
The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected
cities at the subnational and regional level.
The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying
to them through their life cycle.
Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative
indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit,
protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also
measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market
regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present
the data for these indicators.
By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time,
Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves
as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy.
In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and
regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve
performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region
and with the 190 economies that Doing Business has ranked.
The first Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets
and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that
have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the
Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these
11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from
governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving
the regulatory environment for business around the world.
The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance
observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is
reflected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business
ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to
two decimals.
More about Doing Business (PDF, 5MB)
Page 3Doing Business 2018 Costa Rica
Ease of Doing Business in DB 2018 Rank
Region Latin America & Caribbean
190 1
Costa Rica
Income Category Upper middle income 61
DB 2018 Distance to Frontier (DTF)
Population 4,857,274
0 100
City Covered San José 69.13
DB 2018 Distance to Frontier (DTF)
0 100
69.41: Colombia (Rank: 59)
69.13: Costa Rica (Rank: 61)
66.42: El Salvador (Rank: 73)
61.18: Guatemala (Rank: 97)
58.66: Regional Average (Latin America & Caribbean)
58.46: Honduras (Rank: 115)
Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the
indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is reflected on a scale from 0 to 100, where 0 represents the
lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190.
Rankings on Doing Business topics - Costa Rica
1 12
21
28
49
55 60
70 73
82
Rank
109 119
127 129 131
136
163
190
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Distance to Frontier (DTF) on Doing Business topics - Costa Rica
100
88.21
85.00
81.65
77.46 79.32
80 74.36
71.02
60
DTF
51.48
48.33
40 34.42
20
0
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Page 4Doing Business 2018 Costa Rica
Starting a Business
This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited
liability company to start up and formally operate in economy’s largest business city.
To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has
start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and
50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of
local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5
married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators.
The most recent round of data collection for the project was completed in June 2017. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the
(number) business and the procedures are used. It is assumed that any required information is
readily available and that the entrepreneur will pay no bribes.
â—
Submitting all relevant documents and obtaining
all necessary clearances, licenses, permits and
The business:
certificates
â—
Submitting all required notifications and receiving - Is a limited liability company (or its legal equivalent). If there is more than one type
all necessary inspections of limited liability company in the economy, the most common among domestic firms
is chosen. Information on the most common form is obtained from incorporation
â—
Obtaining utility connections for water and
lawyers or the statistical office.
sewerage
- Operates in the economy’s largest business city and the entire office space is
â—
Registering and selling the warehouse after its approximately 929 square meters (10,000 square feet). For 11 economies the data
completion are also collected for the second largest business city.
- Is 100% domestically owned and has five owners, none of whom is a legal entity;
Time required to complete each procedure
and has a start-up capital of 10 times income per capita and has a turnover of at
(calendar days)
least 100 times income per capita.
â—
Does not include time spent gathering information - Performs general industrial or commercial activities, such as the production or sale
â—
Each procedure starts on a separate day (2 of goods or services to the public. The business does not perform foreign trade
procedures cannot start on the same day) activities and does not handle products subject to a special tax regime, for example,
liquor or tobacco. It does not use heavily polluting production processes.
â—
Procedures fully completed online are recorded
- Leases the commercial plant or offices and is not a proprietor of real estate and the
as ½ day
amount of the annual lease for the office space is equivalent to 1 times income per
â—
Procedure is considered completed once final capita.
document is received - Does not qualify for investment incentives or any special benefits.
â—
No prior contact with officials - Has at least 10 and up to 50 employees one month after the commencement of
operations, all of whom are domestic nationals.
Cost required to complete each procedure (% of - Has a company deed 10 pages long.
income per capita)
The owners:
â—
Official costs only, no bribes
â—
No professional fees unless services required by - Have reached the legal age of majority. If there is no legal age of majority, they are
law or commonly used in practice assumed to be 30 years old.
- Are sane, competent, in good health and have no criminal record.
Paid-in minimum capital (% of income per capita - Are married and the marriage is monogamous and registered with the authorities.
â—
Funds deposited in a bank or with third party - Where the answer differs according to the legal system applicable to the woman or
before registration or up to 3 months after man in question (as may be the case in economies where there is legal plurality), the
incorporation answer used will be the one that applies to the majority of the population.
Page 5Doing Business 2018 Costa Rica
Starting a Business - Costa Rica
Standardized Company
Legal form Sociedad Anónima (S.A.) - Corporation
Paid-in minimum capital requirement CRC 0
City Covered San José
Indicator Costa Rica Latin America OECD high Overall Best
& Caribbean income Performer
Procedure – Men (number) 9 8.4 4.9 1.00 (New Zealand)
Time – Men (days) 22.5 31.7 8.5 0.50 (New Zealand)
Cost – Men (% of income per capita) 8.5 37.5 3.1 0.00 (United Kingdom)
Procedure – Women (number) 9 8.5 4.9 1.00 (New Zealand)
Time – Women (days) 22.5 31.8 8.5 0.50 (New Zealand)
Cost – Women (% of income per capita) 8.5 37.5 3.1 0.00 (United Kingdom)
Paid-in min. capital (% of income per capita) 0.0 2.1 8.7 0.00 (113 Economies)
Figure – Starting a Business in Costa Rica and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
85.32: Colombia (Rank: 96)
81.65: Costa Rica (Rank: 127)
79.30: Guatemala (Rank: 139)
78.88: El Salvador (Rank: 140)
78.09: Regional Average (Latin America & Caribbean)
76.98: Honduras (Rank: 150)
Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a
business. These scores are the simple average of the distance to frontier scores for each of the component indicators.
Page 6Doing Business 2018 Costa Rica
Figure – Starting a Business in Costa Rica – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
5
20
Cost (% of income per capita)
4
15
Time (days)
3
10
2
5
1
0 0
1 2 3 4 5 *6 *7 8 9
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 7Doing Business 2018 Costa Rica
Details – Starting a Business in Costa Rica – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Check the availability of the proposed company name Less than one day no charge
Agency : National Registry ( Registro de Personas Jurídicas) (online procedure)
In order to register a company one must first verify the availability of the company name.
The company name can be verified online (https://www.rnpdigital.com) free of cost.
Companies can also be registered by number, in which case the name would not have to
be verified.
2 A notary public drafts and notarizes public deeds of the incorporation Less than one day CRC 165,000
charter for registration before the Public Registry online (online procedure)
Agency : Public Notary
The founding shareholders, as well as the members of the Board of Directors, must sign
the public deed of incorporation drafted and authorized by the notary public, who will
then submit it for registration to the National Registry. A minimum of two founding
shareholders is required, as well as designation of a President, Secretary, Treasurer and
Comptroller. The same person cannot occupy two different positions. According to the
fee structure established by Executive Order No. 39078-JP effective on August 13, 2015,
though the notary public can negotiate fees, the fee for notarizing the articles of
association is CRC 165,000 for any corporation.
3 Deposit capital in the bank account, pay registration fees and stamp duties 1 day see comments
Agency : National Banking System
As a prerequisite for registering the company, 25% of the capital stock indicated in the
incorporation charter (if paid in cash) must be deposited in a national bank. The amount
deposited may be withdrawn once the company has been duly recorded. If founders chose
to sign a promissory note, there is no enforceable obligation to deposit capital in a bank
account later. In fact, the business is not even required to operate a bank account at any
point during its existence.
If the company was incorporated on January 1st, 2017, the registration fees, which
include the notary public fees, are CRC 268,739.03, which is broken down as follows:
Stamp fees:
National Archive (Archivo Nacional) CRC 20
Coleg Contad. Priv (Libros legales) CRC 75
Colegio de Abogados CRC 15,000
Educación y Cultura CRC 750
Fiscal CRC 625
Municipal Fees CRC 0.2% of capital
National Registry CRC 42,620.00
Legal Books CRC 17,150.00
Agrary Stamp (Agrario) CRC 82,500
4 Register the incorporation charter in the National Registry and obtain 2 days CRC 8,000 (digital
authorization to legalize the company books; send the notice of registration fees) +
constitution of the company (edicto) CRC 6,580
Agency : National Registry ( Registro de Personas Jurídicas) (publication fees)
One must register the incorporation charter at the National Registry, obtain authorization
to legalize the company books and send a notice of constitution of the company. This can
be done online since February 2012, when Costa Rica launched Crear Empresa. This
online platform for business registration allows all incorporation documents to be
submitted electronically.
5 File Form D-140 with the before the Tax Department to register the firm as a Less than one day see comment
taxpayer (online procedure)
Agency : Tax Department (Registro Unico de Contribuyentes, Dirección General
de Tributación Directa)
Costa Rican citizens or corporations with a Costa Rican legal representative can register
electronically as taxpayer (https://www.haciendadigital.go.cr/inscriptipopersona.jsp)
6 Register for labor risk insurance with the National Insurance Institute 1 day (simultaneous no charge
(Instituto Nacional de Seguros) with previous
Agency : National Insurance Institute (Instituto Nacional de Seguros) procedure)
The National Insurance Institute is the only insurance at the moment that only offers
labor insurance. The annual premium for this type of insurance is about 2.17% of
reported payroll.
7 Register the company as an employer with Caja Costarricense de Seguro 1 day (simultaneous no charge
Social (CCSS, Social Security Institute) with previous
Agency : Social Security Institute (Caja Costarricense de Seguro Social) procedure)
After submitting the documents required, the CCSS issues a registration form
(inscripción ante CCSS de persona jurídica) that allows the company to start operations.
Within 15 days after registration with the CCSS, the company will receive an ex-post
inspection from an officer, which consists on a simple verification of the information
provided by the company about the business activity and the employees.
Page 8Doing Business 2018 Costa Rica
8 Apply for sanitary permit 1 day USD 30
Agency : Health Department (Ministerio de Salud)
The cost for applying for a sanitary permit depends on the degree of environmental risk
of the company and varies from USD 30 to USD 100 (USD 30 for low environmental
risk, USD 50 for moderate environmental risk, USD 100 for high environmental risk).
9 Apply for the business license (patente municipal) from the municipality 15 days Cost varies between
Agency : Local municipality CRC 10,000 and
All new businesses must apply for the business license (patente municipal) from the CRC 100,000
municipality. depending on the
type of activity,
number of
employees, location.
Takes place simultaneously with previous procedure.
Page 9Doing Business 2018 Costa Rica
Dealing with Construction Permits
This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all
required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with
Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of
quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of
data collection was completed in June 2017. See the methodology for more information
What the indicators measure Case study assumptions
Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the
(number) construction company, the warehouse project and the utility connections are used.
â—
Submitting all relevant documents and obtaining
The construction company (BuildCo):
all necessary clearances, licenses, permits and
certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s
â—
Submitting all required notifications and receiving largest business city. For 11 economies the data are also collected for the second
all necessary inspections largest business city.
- Is 100% domestically and privately owned; has five owners, none of whom is a
â—
Obtaining utility connections for water and
legal entity. Has a licensed architect and a licensed engineer, both registered with
sewerage
the local association of architects or engineers. BuildCo is not assumed to have any
â—
Registering and selling the warehouse after its other employees who are technical or licensed experts, such as geological or
completion topographical experts.
- Owns the land on which the warehouse will be built and will sell the warehouse
Time required to complete each procedure
upon its completion.
(calendar days)
â—
Does not include time spent gathering information The warehouse:
â—
Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or stationery.
though procedures that can be fully completed - Will have two stories, both above ground, with a total constructed area of
online are an exception to this rule approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3
â—
Procedure is considered completed once final meters (9 feet, 10 inches) high and will be located on a land plot of approximately
document is received 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the
warehouse is valued at 50 times income per capita.
â—
No prior contact with officials
- Will have complete architectural and technical plans prepared by a licensed
Cost required to complete each procedure (% of architect. If preparation of the plans requires such steps as obtaining further
income per capita) documentation or getting prior approvals from external agencies, these are counted
as procedures.
â—
Official costs only, no bribes
- Will take 30 weeks to construct (excluding all delays due to administrative and
regulatory requirements).
Building quality control index (0-15)
â—
Sum of the scores of six component indices: The water and sewerage connections:
â—
Quality of building regulations (0-2) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
â—
Quality control before construction (0-1) is no water delivery infrastructure in the economy, a borehole will be dug. If there is
no sewerage infrastructure, a septic tank in the smallest size available will be
â—
Quality control during construction (0-3)
installed or built.
â—
Quality control after construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average
â—
Liability and insurance regimes (0-2) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of
â—
Professional certifications (0-4) 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300
gallons) a day.
- Will have a constant level of water demand and wastewater flow throughout the
year; will be 1 inch in diameter for the water connection and 4 inches in diameter for
the sewerage connection.
Page 10Doing Business 2018 Costa Rica
Dealing with Construction Permits - Costa Rica
Standardized Company
Estimated value of warehouse CRC 305,419,810.20
City Covered San José
Indicator Costa Rica Latin America OECD high Overall Best
& Caribbean income Performer
Procedures (number) 17 15.7 12.5 7.00 (Denmark)
Time (days) 135 191.8 154.6 27.5 (Korea, Rep.)
Cost (% of warehouse value) 2.0 3.2 1.6 0.10 (5 Economies)
Building quality control index (0-15) 11.0 8.8 11.4 15.00 (3 Economies)
Figure – Dealing with Construction Permits in Costa Rica and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
71.02: Costa Rica (Rank: 70)
68.71: Colombia (Rank: 81)
65.44: Honduras (Rank: 113)
64.63: Guatemala (Rank: 116)
63.59: Regional Average (Latin America & Caribbean)
60.16: El Salvador (Rank: 139)
Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for
dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component
indicators.
Figure – Dealing with Construction Permits in Costa Rica – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
1.2
120
Cost (% of income per capita)
1
100
0.8
Time (days)
80
0.6
60
0.4
40
20 0.2
0 0
1 2 *3 *4 *5 6 *7 8 9 10 11 * 12 13 14 * 15 * 16 * 17
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 11Doing Business 2018 Costa Rica
Figure – Dealing with Construction Permits in Costa Rica and comparator economies – Measure of Quality
15
11.0 11.0 11.0
Index score 10.0 10.0
10 8.8
5
0
Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean
Details – Dealing with Construction Permits in Costa Rica – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Request and obtain zoning authorization (uso de suelo) from the Municipal 10 days no charge
Government
Agency : Municipal Government
This request can also include a request for property line setbacks to be indicated by the
Municipal Government. New land use policies were approved in April 2006. The greater
San Jose metropolitan area includes 31 municipalities. The zoning authorization will be
valid for 6 months, or up to 12 months. Many municipal authorities, such as the Belen
Municipality, do not respect their own land-use regulations when granting the final
construction permit.
2 Obtain results of geotechnical study / soil test 17 days CRC 628,981
Agency : Private licensed company
A soil study is not a requirement by law. In practice, contractors ask for a soil test to
ensure that the foundation of the building is solid. The engineer must understand the
suitability of the soil for the proposed construction work. Soil test allows to build a solid
foundation and avoid structures to be damaged or collapsed or leaned.
The zoning authorization must be obtained prior to requesting a soil test.
3 Obtain topographic results of land plot 11 days CRC 428,982
Agency : Private licensed company
A topographic survey of the land plot is obtained prior to developing the architectural
plans of the warehouse.
4 Request and obtain approval by the Water Department (Acueductos y 5 days no charge
Alcantarillados)
Agency : Water Department
BuildCo must complete and submit an approval form to the Water Department. In turn,
the Department must verify that the construction project site has a water source.
5 Request and obtain workers compensation insurance proof from National 1 day no charge
Insurance Institute
Agency : National Insurance Institute
The National Insurance Institute requires proof that worker compensation insurance has
been paid prior to issuing a building permit. This proof is required to start each new
project. In the past, developers were allowed a blanket insurance policy that did not
require purchase of insurance for every new project. In 2007, the Institute’s policies were
revised; it now allows a blanket insurance that the developer adjusts, paying the
differences annually. But the complexity of the process discourages its use. Most
construction companies purchase individual insurance on a case-by-case basis for
projects instead of globally for annual activities. This system is likely to be changed
because of private sector complaints.
Insurance premiums are based on the amount of coverage. The cost can range from
4.23% to 5.53% of the coverage amount. The completed form must be presented with
copies of the workers’ identification cards or (for underage employees) working permits.
6 Request and obtain approval from National Environment Technical 60 days CRC 1,000,000
Secretary
Agency : National Environment Technical Secretary
BuildCo must obtain approval from the National Environment Technical Secretary
(Secretaría Técnica Nacional del Ambiente, SETENA), using two forms (in Spanish)
available on SETENA’s Web site (www.minae.go.cr /setena.html). BuildCo would use
Form D-1 which costs anywhere between CRC 1 million to CRC 1.5 million. The
response generally takes 60 -- 90 days. This procedure and the next can be completed
simultaneously.
Preparation of the environmental impact study (EIS) costs anywhere between CRC
8,000.00 and CRC 12,000.00. But the study is done internally by BuildCo.
Page 12Doing Business 2018 Costa Rica
7 Request and obtain approval of blue prints by College of Architects and 20 days CRC 810,862
Engineers
Agency : College of Architects and Engineers
BuildCo should submit the property survey map and a contract, signed by two members
of the College of Architects and Engineers: an electrical engineer and either a civil
engineer or an architect. It is preferred that at least four blueprint copies be submitted.
The college has implemented the new American Power Conversion Corporation (APC)
system (via the Internet). If the APC submits the approval, the time line is 1 day; if not, it
is about 5 -- 8 days. In 2007, the College encouraged a complete change to digital
approval. The approval fee is 0.265% of the project value, plus a fixed fee of CRC
1,500.00 for two construction log books.
8 Request and obtain construction permit from Municipal Government 15 days CRC 3,054,198
Agency : Municipal Government
According to Law 8220, the relevant authorities must respond to a construction permit
request within 30 days. However, on average, it should take 15 days. The construction
permit fee is 1% of the project value.
9 Receive on-site inspection - I 1 day no charge
Agency : Municipal Government
During construction, inspections occur monthly, though not according to a specific
schedule. The inspector may show up randomly to view the construction and review the
construction log book (bitacora de construccion), which the engineer/architect uses to
register entries for each stage of construction. Under Costa Rican law, the engineer is
responsible for complying with construction laws and regulations. There is no need to
request inspections.
10 Receive on-site inspection - II 1 day no charge
Agency : Municipal Government
11 Receive on-site inspection - III 1 day no charge
Agency : Municipal Government
Request water connection 1 day no charge
12 Agency : Water Department
After the connection is requested, an inspector from the Water Department visits the
construction site, determines the connection requirements, and, on this basis, estimates
the costs. Sewage connection is not included. With few centralized sewage connections,
most connections are done with an independent septic system or treatment plant.
BuildCo must complete an application form and present all the required documents,
including a copy of the company's identification card.
13 Receive inspection from Water Department and pay connection cost 1 day CRC 79,520
Agency : Water Department
14 Connect to water services 28 days no charge
Agency : Water Department
Request proof of completed construction (Constancia de Obra Terminada) 1 day no charge
15 from Municipality
Agency : Municipal Government
BuildCo or the Responsible of Construction works (Responsable de Obra) must provide a
certificate of completed construction to the Municipality .
The Inspection Department of the Municipality (Seccion de Inspeccion Municipal) must
inspect and issue the certificate of completed construction stating that the construction
has been completed in accordance with what was stated in the permit and with the
municipal regulations.
The legal basis is the Urban Master Plan published in La Gaceta N. 148 of August 3,
2005 (“Plan Director Urbano del Cantón de San José”).
Receive final inspection from from Municipality 1 day no charge
16 Agency : Municipal Government
Obtain proof of completed construction (Constancia de Obra Terminada) 3 days no charge
17 from Municipality
Agency : Municipal Government
Takes place simultaneously with previous procedure.
Page 13Doing Business 2018 Costa Rica
Details – Dealing with Construction Permits in Costa Rica – Measure of Quality
Answer Score
Building quality control index (0-15) 11.0
Quality of building regulations index (0-2) 2.0
How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0
Free of charge.
Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0
regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees
to be paid;
Required
preapprovals.
Quality control before construction index (0-1) 1.0
Which third-party entities are required by law to verify that the building plans are in Licensed 1.0
compliance with existing building regulations? (0-1) architect;
Licensed
engineer.
Quality control during construction index (0-3) 2.0
What types of inspections (if any) are required by law to be carried out during construction? Inspections by in- 1.0
(0-2) house engineer;
Unscheduled
inspections.
Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0
inspections are
always done in
practice.
Quality control after construction index (0-3) 3.0
Is there a final inspection required by law to verify that the building was built in accordance Yes, final 2.0
with the approved plans and regulations? (0-2) inspection is
done by
government
agency; Yes, in-
house engineer
submits report for
final inspection.
Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0
always occurs in
practice.
Liability and insurance regimes index (0-2) 1.0
Which parties (if any) are held liable by law for structural flaws or problems in the building Architect or 1.0
once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer;
Professional in
charge of the
supervision;
Construction
company; Owner
or investor.
Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 0.0
structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law
or Decennial Insurance)? (0-1) to obtain
insurance .
Professional certifications index (0-4) 2.0
What are the qualification requirements for the professional responsible for verifying that the University degree 1.0
architectural plans or drawings are in compliance with existing building regulations? (0-2) in architecture or
engineering;
Being a
registered
architect or
engineer.
Page 14Doing Business 2018 Costa Rica
What are the qualification requirements for the professional who supervises the construction University degree 1.0
on the ground? (0-2) in engineering,
construction or
construction
management;
Being a
registered
architect or
engineer.
Page 15Doing Business 2018 Costa Rica
Getting Electricity
This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly
constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of
tariffs and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology
for more information.
What the indicators measure Case study assumptions
Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the
(number) construction company, the warehouse project and the utility connections are used.
â—
Submitting all relevant documents and obtaining
The construction company (BuildCo):
all necessary clearances and permits
â—
Completing all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the economy’s
receiving all necessary inspections largest business city. For 11 economies the data are also collected for the second
largest business city.
â—
Obtaining external installation works and possibly
- Is 100% domestically and privately owned; has five owners, none of whom is a
purchasing material for these works
legal entity. Has a licensed architect and a licensed engineer, both registered with
â—
Concluding any necessary supply contract and the local association of architects or engineers. BuildCo is not assumed to have any
obtaining final supply other employees who are technical or licensed experts, such as geological or
topographical experts.
Time required to complete each procedure
- Owns the land on which the warehouse will be built and will sell the warehouse
(calendar days)
upon its completion.
â—
Is at least 1 calendar day
The warehouse:
â—
Each procedure starts on a separate day
â—
Does not include time spent gathering information - Will be used for general storage activities, such as storage of books or stationery.
- Will have two stories, both above ground, with a total constructed area of
â—
Reflects the time spent in practice, with little
approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3
follow-up and no prior contact with officials
meters (9 feet, 10 inches) high and will be located on a land plot of approximately
Cost required to complete each procedure (% of 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the
warehouse is valued at 50 times income per capita.
income per capita)
- Will have complete architectural and technical plans prepared by a licensed
â—
Official costs only, no bribes architect. If preparation of the plans requires such steps as obtaining further
â—
Value added tax excluded documentation or getting prior approvals from external agencies, these are counted
as procedures.
The reliability of supply and transparency of - Will take 30 weeks to construct (excluding all delays due to administrative and
tariffs index (0-8) regulatory requirements).
â—
Duration and frequency of power outages (0–3)
The water and sewerage connections:
â—
Tools to monitor power outages (0–1)
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
â—
Tools to restore power supply (0–1)
is no water delivery infrastructure in the economy, a borehole will be dug. If there is
â—
Regulatory monitoring of utilities’ performance no sewerage infrastructure, a septic tank in the smallest size available will be
(0–1) installed or built.
â—
Financial deterrents limiting outages (0–1) - Will have an average water use of 662 liters (175 gallons) a day and an average
wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of
â—
Transparency and accessibility of tariffs (0–1)
1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300
Price of electricity (cents per kilowatt-hour)* gallons) a day.
- Will have a constant level of water demand and wastewater flow throughout the
â—
Price based on monthly bill for commercial
year; will be 1 inch in diameter for the water connection and 4 inches in diameter for
warehouse in case study
the sewerage connection.
*Note: Doing Business measures the price of
electricity, but it is not included in the distance to
frontier score nor the ranking on the ease of getting
electricity.
Page 16Doing Business 2018 Costa Rica
Getting Electricity - Costa Rica
Standardized Company
Price of electricity (US cents per kWh) 14.6
Name of utility Compania Nacional de Fuerza y Luz
City Covered San José
Indicator Costa Rica Latin America OECD high Overall Best
& Caribbean income Performer
Procedures (number) 5 5.5 4.7 2 (United Arab
Emirates)
Time (days) 45 66.0 79.1 10 (United Arab
Emirates)
Cost (% of income per capita) 168.1 927.4 63.0 0.00 (Japan)
Reliability of supply and transparency of tariff 8 4.2 7.4 8.00 (28 Economies)
index (0-8)
Figure – Getting Electricity in Costa Rica and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
88.21: Costa Rica (Rank: 21)
84.02: Guatemala (Rank: 36)
74.18: Colombia (Rank: 81)
71.40: El Salvador (Rank: 88)
70.45: Regional Average (Latin America & Caribbean)
53.61: Honduras (Rank: 144)
Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting
electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators.
Page 17Doing Business 2018 Costa Rica
Figure – Getting Electricity in Costa Rica – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
45 180
40 160
Cost (% of income per capita)
35 140
30 120
Time (days)
25 100
20 80
15 60
10 40
5 20
0 0
1 *2 3 4 5
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Figure – Getting Electricity in Costa Rica and comparator economies – Measure of Quality
8
8
7
7
6 6
6
Index score
5
4.2
4
3
2
1
0
0
Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean
Page 18Doing Business 2018 Costa Rica
Details – Getting Electricity in Costa Rica – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Request engineering study, submit application and await estimate 8 calendar days CRC 35,000
Agency : Compania Nacional de Fuerza y Luz (CNFL)
The service is generally requested in person. The customer has to file the following
documents with the application form:
• the electrical plans,
• the cadastre plans
• and a copy of the applicant's ID.
Depending of the nature of the work, more documents might be required. None of these
documents require notary's certification.
2 Receive site inspection by CNFL 1 calendar day CRC 0
Agency : Compania Nacional de Fuerza y Luz (CNFL)
A site inspection is necessary to prepare the technical report.
3 Await preparation of design by CNFL and prearrangements for works 8 calendar days CRC 0
Agency : Compania Nacional de Fuerza y Luz (CNFL)
After the inspection the utility will issue a technical report. The client is given the designs
and a list of providers authorized by CNFL to do the connection works.
The design itself is prepared by CNFL -indicating the works and materials required.
Should the installation of a transformers be required the design is prepared by the Section
for the Design of Electrical Networks of CNFL. In order to establish whether this is
necessary, the Engineering Study is issued; if the connection can be done with
underground cables, the work can be designed by an outside electric engineer, who is
registered with the Colegio de Ingenieros Electricistas, Mecánicos e Industriales (CFIA).
In that case, the designs are presented to CNFL for approval. Until they are approved and
the Engineering Study is issued, no works can be done.
4 Hire private company to carry out works in accordance with CNFL's plans 26 calendar days USD 17,500
Agency : Empresa privada
The external connection works have to be done by a firm that has been authorized by
CNFL to do medium voltage network construction work. There are 21 firms with such
authorization in the capital city. Once the supply contract between the client and the
authorized provider has been signed, it is filed with CNFL. It takes approximately 3 days
to start the works and, once supervised, the construction can start. The construction
cannot start if no initiation date has been determined by the CNFL.
The internal wiring installation can be done by any electrician hired by the client, but it
has to be supervised by the engineer responsible for the design of the electric installation.
CNFL does not conduct any inspections of the internal wiring. The internal wiring
installation requires previous plans approved by an electric engineer authorized by
Colegio de Ingenieros Electricistas, Mecánicos e Industriales (CFIA) and the works have
to be supervised by the CFIA or by another electric engineer. No certificate of
compliance with NEC rules is emitted nor can it be requested. The plans approved by
CFIA will have to be filed with the CNFL by the time the meter installation is requested.
Three transformers of 50 kVA have to be installed inside the client's private property. The
client has to pay for them. They can be installed in a post inside the private property (it's
not allowed to install them in public places) or in a transformers vault.
5 Receive meter installation and final connection from CNFL 3 calendar days CRC 368,853.06
Agency : Compania Nacional de Fuerza y Luz (CNFL)
The client has to request the meter. A donation document for the transformers
(transferring ownership to the utility) is prepared and confirmed that no money is owed
by the client. The payments that the customer has to make to CNFL have to be done in
the Section of Electric Networks Design. The payment receipt has to be shown later in
the office of Engineering Study to be able to go to this step (the Engineering Study).
There is a guarantee deposit that is calculated according to the consumption. It represents
one month consumption. The minimum amount of guarantee for the residential customer
is ¢ 15.500, and for businesses the minimum amount is ¢ 25.000. This deposit is required
for all clients requesting a new service. The deposit is refundable and after five years it
begins to generate interests. It is reimbursed when the client terminates the service. The
deposit covers the installation of the meter equipment with its materials. Additionally it
covers the operation costs and the service maintenance.
Normally CNFL tries to both inspect the works and install the meter at the same time.
CNFL charges between 2 and 3% of the cost of the works only for the reception and the
powering. The responsible to pay this fee is the client. Therefore, this cost is normally
included in the estimation of costs sent to the client. If the service requires power
transformers or a specific meter, they are installed by CNFL without extra costs.
The installation of the meter is exclusive responsibility of CNFL. The internal installation
planes approved by the Engineers Association and the electrician's certification have to
be sent to CNFL before the final powering.
Takes place simultaneously with previous procedure.
Page 19Doing Business 2018 Costa Rica
Details – Getting Electricity in Costa Rica – Measure of Quality
Answer
Reliability of supply and transparency of tariff index (0-8) 8
Total duration and frequency of outages per customer a year (0-3) 3
System average interruption duration index (SAIDI) 0.0
System average interruption frequency index (SAIFI) 0.0
What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0
Mechanisms for monitoring outages (0-1) 1
Does the distribution utility use automated tools to monitor outages? Yes
Mechanisms for restoring service (0-1) 1
Does the distribution utility use automated tools to restore service? Yes
Regulatory monitoring (0-1) 1
Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of Yes
supply?
Financial deterrents aimed at limiting outages (0-1) 1
Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages Yes
exceed a certain cap?
Communication of tariffs and tariff changes (0-1) 1
Are effective tariffs available online? Yes
Link to the website, if available online https://www.cnfl.go.cr
/index.php/tarifas-
vigentes-
c#disposiciones-
generales
Are customers notified of a change in tariff ahead of the billing cycle? Yes
Note:
If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff
index.
If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.
If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.
Page 20Doing Business 2018 Costa Rica
Registering Property
This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to
purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land
administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency
of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for
the project was completed in June 2017.See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the
immovable property (number) parties to the transaction, the property and the procedures are used.
â—
Preregistration procedures (for example,
The parties (buyer and seller):
checking for liens, notarizing sales agreement,
paying property transfer taxes) - Are limited liability companies (or the legal equivalent).
â—
Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. For 11
business citya. economies the data are also collected for the second largest business city.
- Are 100% domestically and privately owned.
â—
Postregistration procedures (for example, filling
- Have 50 employees each, all of whom are nationals.
title with municipality)
- Perform general commercial activities.
Time required to complete each procedure
The property (fully owned by the seller):
(calendar days)
- Has a value of 50 times income per capita, which equals the sale price.
â—
Does not include time spent gathering information
- Is fully owned by the seller.
â—
Each procedure starts on a separate day - though - Has no mortgages attached and has been under the same ownership for the past
procedures that can be fully completed online are 10 years.
an exception to this rule
- Is registered in the land registry or cadastre, or both, and is free of title disputes.
â—
Procedure is considered completed once final - Is located in a periurban commercial zone, and no rezoning is required.
document is received - Consists of land and a building. The land area is 557.4 square meters (6,000
â—
No prior contact with officials square feet). A two-story warehouse of 929 square meters (10,000 square feet) is
located on the land. The warehouse is 10 years old, is in good condition, has no
Cost required to complete each procedure (% of heating system and complies with all safety standards, building codes and legal
property value) requirements. The property, consisting of land and building, will be transferred in its
â—
Official costs only (such as administrative fees, entirety.
duties and taxes). - Will not be subject to renovations or additional construction following the purchase.
- Has no trees, natural water sources, natural reserves or historical monuments of
â—
Value Added Tax, Capital Gains Tax and illicit
any kind.
payments are excluded
- Will not be used for special purposes, and no special permits, such as for
Quality of land administration index (0-30) residential use, industrial plants, waste storage or certain types of agricultural
activities, are required.
â—
Reliability of infrastructure index (0-8) - Has no occupants, and no other party holds a legal interest in it.
â—
Transparency of information index (0–6)
â—
Geographic coverage index (0–8)
â—
Land dispute resolution index (0–8)
â—
Equal access to property rights index (-2–0)
Page 21Doing Business 2018 Costa Rica
Registering Property - Costa Rica
Standardized Company
Property value CRC 305,419,810.20
City Covered San José
Indicator Costa Rica Latin America OECD high Overall Best
& Caribbean income Performer
Procedures (number) 5 7.2 4.6 1.00 (4 Economies)
Time (days) 11 63.3 22.3 1.00 (3 Economies)
Cost (% of property value) 3.4 5.8 4.2 0.00 (5 Economies)
Quality of the land administration index (0-30) 17.5 12.0 22.7 29.00 (Singapore)
Figure – Registering Property in Costa Rica and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
74.36: Costa Rica (Rank: 49)
71.34: Colombia (Rank: 60)
67.92: El Salvador (Rank: 69)
64.44: Guatemala (Rank: 85)
63.42: Honduras (Rank: 91)
55.36: Regional Average (Latin America & Caribbean)
Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering
property. These scores are the simple average of the distance to frontier scores for each of the component indicators.
Figure – Registering Property in Costa Rica – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
3
10
2.5 Cost (% of income per capita)
8
2
Time (days)
6
1.5
4
1
2 0.5
0 0
1 *2 3 4 5
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 22Doing Business 2018 Costa Rica
Figure – Registering Property in Costa Rica and comparator economies – Measure of Quality
30
25
Index score
20 17.5 16.5
15 13.5 13.0 14.0
12.0
10
5
0
Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean
Details – Registering Property in Costa Rica – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain a tax clearance certificate from the Municipality One day CRC 1320
Agency : Municipality of San José (Simultaneous with
The seller shall provide the buyer a certificate attesting that the property is current with Procedure 2)
payment of all the Municipal taxes and charges (including property tax, and charges for
municipal services).
2 Obtain a literal certification from the National Registry and a cadastral plan Less than a day CRC 2800 (stamps
from the Cadastre online (online procedure for the ownership
Agency : Registro Nacional and simultaneous certificate) + CRC
Since November 1, 2010, it is possible to obtain property certificates and certified with procedure 1) 2800 (stamps for the
cadastral plan images on the same website (www.rnpdigital.com). According to Decree
certified plan)
Nº 35488-J, all certificates obtained electronically have the same value as paper-based
certificates.
The seller obtains a literal certification (printed sheet with the information of the property
recorded at the Registry's database) from the National Registry, where it is issued in the
same day.
Information of property can be obtained online. A notary public or any individual can
access with a designated password and get this information by simply login into the
National Registry's website (www.rnpdigital.com), putting the property's information and
getting a print screen with the above indicated information (nature of property, location,
area, cadastre number, owner, liens, mortgages, easements, limitations, boundaries, etc).
It is also possible to do searches in computers available at the National Registry.
3 A lawyer/notary drafts the sale agreement as a public deed 2 days Fees according to the
Agency : Lawyer/Notary following scale:
Notary fees were amended by the Executive Decree No. 39078-JP of 25th of May of Property value
2015 (which entered into force in August 2015). A lawyer/notary prepares the sale 0 – 11 million CRC
agreement in the form of a public deed based on the information obtained in step 1 and 2,
2%
provided by the parties. In accordance with the Notary Code, the lawyer/notary is legally
11 – 16.5 million CRC
obliged to study the property and in case the parties are corporations, study the Articles of
1.5%
Incorporation and verify that the person signing the transfer deed has the legal authority
to represent the company. 16.5 – 33 million CRC
1.25%
In Costa Rica notary publics are lawyers. 33 million CRC and
higher
Parties must provide photocopies of their ID (“cédula” for Costa Rican citizens or
passport for foreigners)
Corporations must provide a certificate of incorporation.
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