Costa Rica Gambling License

Registering and operating a gambling company in Costa Rica has several advantages:

A stable economy and investment-friendly environment
This provides entrepreneurs with confidence that their business will not be subjected to unexpected policy changes or risk of damage. In addition, it should be noted that Costa Rica is not considered an offshore jurisdiction, so doing business in this country will not limit opportunities to collaborate with partners in other successful countries.

Lack of active government regulation
Since the Costa Rican government does not interfere in the regulation of gambling, you can use this jurisdiction to test, hone, and refine your business concept. There are no strict obligations here that could entail high fees or restrictions, allowing you to experiment with gambling and make dynamic decisions without significant restrictions.

Absence of taxes on gambling
Income earned outside of Costa Rica is exempt from taxation, and since the gambling industry is prohibited from providing its services to Costa Rican residents, corporate income tax does not apply. In the case of dividend payments from Costa Rica, the country withholds tax at source at a rate of 15% for registered shares and 5% for bearer shares.

Agreements for the elimination of double taxation
Costa Rica has double taxation treaties with Germany, Mexico, and Spain. These agreements are designed to prevent double taxation of income, such as dividends, interest, and consulting services, for companies that have business activities in both member countries. Such agreements ensure fair and efficient taxation for signatories and help avoid duplicate tax liabilities.

Use of cryptocurrency
Gambling companies in Costa Rica are allowed to accept payments using cryptocurrencies such as Bitcoin or Ethereum, which opens up the possibility of operating crypto-casinos.

A crypto-casino is an online gambling platform that accepts cryptocurrency transactions, including deposits, wagers, and withdrawals of winnings. Through the use of blockchain technology, which provides a high level of security, crypto casinos are often seen as a more secure alternative to gambling using conventional (fiat) currencies. The presence of crypto casinos provides an opportunity to attract new audiences and expand markets, as interest in cryptocurrency-based online gambling continues to grow and its potential is far from exhausted.

Low level of requirements for registration and doing business
The lack of mandatory testing requirements for gambling software in Costa Rica reduces entry barriers to entry into this market. Minimal due diligence requirements simplify the process by not requiring extensive documentation for regulators.

Running a gambling business in Costa Rica also comes with several disadvantages:

Lack of ability to serve Costa Rican residents
Residents of this country do not have the opportunity to become customers of online gambling services provided under a Costa Rican gambling license. This limitation may reduce the potential customer base for the business.

Banking problems
In Costa Rica, local banks are reluctant to process transactions related to online gambling. This can create difficulties in managing financial transactions and gambling accounts.

Difficulties in opening corporate accounts
Due to the strong U.S. influence on Costa Rica’s banking industry, opening corporate gaming accounts can be difficult. United States regulation and control can complicate the process and create barriers to establishing banking relationships.

It is important to carefully review these disadvantages and assess their potential impact on gaming operations and objectives before deciding whether to choose Costa Rica as a jurisdiction to obtain a gaming license.

Despite Costa Rica’s popularity for setting up an online gambling business, the jurisdiction lacks a licensing authority and specific laws governing iGaming. Thus, although many people mention a Gaming License for virtual gambling, there is no such concept. A gaming company in Costa Rica is a legal entity focused on online gambling. To conduct online gambling activities from Costa Rica, operators need only register the company with the National Registry of Costa Rica and indicate that its purpose is to provide online gambling services outside the territory of Costa Rica. Online gambling is prohibited inside the country and operators should avoid serving Costa Rican citizens.

According to local legislation, a corporation registered as a gaming company has the option of obtaining a Data Processing License from the local government, namely the municipality. This license requires the corporation to have a physical presence in Costa Rica. The Data Processing License confirms the company’s ability to process data and locate its servers in the country, which is a common practice for gambling companies. Nevertheless, obtaining this license is not mandatory, since the establishment of a corporation registered as a gambling company under the Constitutive Treaty is perfectly legal in Costa Rica. You are not required to obtain a Data Processing License to conduct your activities, and no one has the authority to require one from you.

In summary, for a clear understanding of the situation, it should be emphasized that Costa Rica does not have a gambling licensing system, and online gambling activities in this country are not subject to licensing, regulation, or any type of control. This also applies to companies that hold a Data Processing License. It is important to emphasize that registering a gambling company in Costa Rica and obtaining a Data Processing License does not entitle it to provide virtual gambling services to residents of countries where national legislation prohibits, restricts, or regulates such activities. Some of these countries include the United States, member states of the European Union, Switzerland, and others.

To obtain a data processing license for your gambling business in Costa Rica, you need to start by registering a company in the country. It is important to note, however, that you must not be a citizen of Costa Rica or another country where online casinos are illegal or require a local license. Additionally, you are prohibited from providing gambling services or gambling activities to residents of Costa Rica or other countries where these activities are prohibited.

To prevent violation of the requirements, you should clearly state upon registration that the primary purpose of your company is to provide online gambling services outside of Costa Rica. In addition, it is recommended that you restrict access to residents of these countries by blocking IP addresses to prevent them from accessing your gambling site.

Licensing requirements may vary slightly from municipality to municipality, but generally, to obtain a license you need to be:

• a company registered in Costa Rica;
• having an office registered in that jurisdiction;
• issuance of an employee risk insurance policy;
• inspecting by the municipality;
• obtaining authorization from the Ministry of Health;
• registering employees with the Caja Costarricense del Seguro Social (CCSS);
• hosting the casino host server and all related data in Costa Rica.

The cost of the data processing license for the first year will be approximately $6,500. The process of obtaining this license takes approximately 6 weeks.

The company registration process takes approximately 2-3 weeks, including the preparation of the necessary documents. Under the Commercial Code, there are many legal business structures for registering a gambling company:

• corporation;
• limited liability company;
• joint stock company;
• individual limited liability company;
• general partnership;
• limited liability partnership, etc.

Registering a corporation or limited liability company in Costa Rica provides several significant advantages for gambling-related businesses:

• no initial authorized share capital requirements;
• non-residents can own 100% of the company’s shares;
• absence of strict restrictions and high requirements for directors;
• fast registration process;
• low costs to set up a company.

It is also a great solution for businesses related to cryptocurrency gambling. According to local legislation, the minimum wage is required to be paid in local currency, but anything above the minimum wage can be paid in the form of virtual currency.

The basic requirements for registering a company in Costa Rica are:

• having a legal representative or local registration agent;
• a minimum of two shareholders;
• availability of a local office.

The legal representative acts on behalf of the company in legal matters and signs all operational documents. He or she is responsible for the reputation and smooth functioning of the company and is personally responsible for legal matters related to the company’s operations. To hold this position, the person must be a Costa Rican citizen or a foreigner with a valid visa to stay in Costa Rica.

To register a company in Costa Rica, the following documents are required:

• a copy of the articles of incorporation;
• copies of personal documents of shareholders and directors;
• certificates of authorized residence from the Costa Rican Department of Immigration, if the founders are foreigners.
• local office lease agreement;
• medical authorization from the Costa Rican Ministry of Health;
• employee insurance policy.

Given that the official national language of Costa Rica is Spanish, documents should be submitted in Spanish.

The process of registering a company in Costa Rica includes the following steps:

• selecting the legal structure for the company;
• checking and reserving a suitable company name;
• preparation of documents;
• opening a corporate account in a foreign bank for commercial operations;
• passing security checks on the participants;
• payment of company formation fees;
• filing with the Costa Rican Registry of Legal Entities;
• registration of the shareholders’ agreement with the Costa Rican Registry of Legal Entities;
• registration with the tax authorities;
• submission of a declaration of the ultimate beneficial owner (UBO) to the Central Bank of Costa Rica (the declaration includes all personal information, capital, types, and number of shares held);
• registering the company as an employer with the CCSS;
• applying for national insurance and occupational risk insurance.

All documents submitted are subject to verification by the Costa Rican Consulate in the country of origin and registered in Costa Rica to obtain a local legal certificate.

Costa Rica lacks a legislative framework and a specialized regulator focused solely on gambling. Local governments, such as municipalities or town halls, have overall responsibility for gambling control and seek to enforce broad local laws. Costa Rican laws prohibit residents from participating in online gambling, and land-based casinos are only allowed within hotels.

Due to the lack of legislation and controls on online gambling, companies founded or registered in Costa Rica are not subject to monitoring or other regulations like many offshore organizations. Under local law, online gambling is defined as an activity where transactions between players and operators are processed. In other words, the focus is on where the players are located rather than the location of the gambling operator. Consequently, online gambling companies can operate from Costa Rica, provided that their financial transactions are not processed by Costa Rican banks and they do not offer to gamble to locals. Such entrepreneurs may establish a gambling business in Costa Rica to attract players outside the country while being obliged to comply with general local legislation:

• Law on Combating Money Laundering;
• Regulations on Prevention of Capital Legitimization Risk, Terrorist Financing, and Weapons of Mass Destruction Proliferation Financing;
• Know Your Customer (KYC) policy established under Act 9449, Reform of the Narcotic Drugs, Psychotropic Substances, Drugs of Unauthorized Use, Related Activities, Money Laundering and Terrorist Financing Act;
• Penal Code;
• Commercial Code (1964).

A gambling company in Costa Rica represents an excellent opportunity for startups to test their strength in the field before investing significant funds in licensing. Establishing an online gambling company allows for testing the software, and website and assessing the popularity of the platform among the target audience before moving on to the next stage of business development.

Once a company is established in Costa Rica, you can apply for a data processing license issued by the local municipality. With all the necessary documents in place, the process is fairly simple and does not take long.

The main steps in obtaining a data processing license:

1. Document preparation.

In addition to the standard corporate documents, it is necessary to provide evidence that the company has internal AML/CFT procedures and policies in place by the relevant legislation.

2. Submission of an electronic application to the local municipality in Spanish.

3. Company verification.

The municipality may inspect your gambling business for compliance with general business standards to ensure compliance with normal business norms.

Keep in mind that exact requirements may vary, and it is important to follow local government guidelines and legislation in the area.