gambling license costa rica

Costa Rica Gambling License

Costa Rica is a favorable jurisdiction for the gaming sector to start and expand the gambling-related business, which stands out for its stable economy and attractive investment climate. For a quick and successful registration of your company, contact the experts of Gofaizen & Sherle.

Costa Rica is a country in Central America that does not regulate the gambling industry but has hundreds of registered gambling companies providing services outside the jurisdiction. Although gambling is not officially regulated here, Costa Rica is a member of the OECD (Organization for Economic Cooperation and Development) and meets international standards, making it safe for investors and customers.

The absence of Costa Rica in the list of FATF countries with financial disadvantages so Costa Rica is a favorable jurisdiction for the gaming sector to start and expand the gambling-related business, which stands out for its stable economy and attractive investment climate. For a quick and successful registration of your company, contact the experts of Gofaizen & Sherle.

Although the jurisdiction does not have a Costa Rica Gambling License, it is not prohibited to conduct gambling activities in Costa Rica. Any company engaged in these activities is a legal entity with the definition of “online gambling”. This status allows companies to conduct activities outside the jurisdiction without mandatory regulatory compliance. Moreover, every operator that plans to host its servers within Costa Rica is entitled to obtain a Data Processing License.

Advantages of a Costa Rica Gaming Company

Working with a global market

You can provide different forms of online gambling to customers worldwide: casino, poker, slots, and betting. Since Costa Rica does not have the status of an offshore jurisdiction, it makes it possible to work with EU countries and the US, which expands business opportunities and attractiveness to international players.

Stability

The stability of the economy and low crime rate attract investors from different countries. In addition, a company can be assured of a reliable jurisdiction without unexpected changes affecting the business, which promotes transparency and predictability for doing business, making decision-making and planning easier for companies

Lack of oversight

The government does not get involved in regulating gambling activities and does not impose strict requirements or obligations that most companies in other jurisdictions face. The company can focus on growing its business without strict annual reporting and hefty government fees.

Business testing

Due to the lack of requirements to obtain a Costa Rica gambling license, companies can use the jurisdiction to test their business model and improve it. The government’s policy on cryptocurrencies and light regulation of online gambling makes Costa Rica an ideal place to test new concepts before moving to a jurisdiction with stricter licensing.

Preferential taxation

Companies that make profits outside the jurisdiction are exempt from income tax and corporate tax. This creates a favorable environment for international businesses, allowing them to reduce their tax burden and optimize profits. If the dividends were remitted from Costa Rica, they are subject to a 15% rate (registered shares) and 5% (bearer shares). In addition, Costa Rica has entered into agreements with Germany, Mexico, and Spain to eliminate double taxation.

Recognition of cryptocurrency

Gambling companies are authorized to issue payments to customers in cryptocurrency – BTC and ETH. This advantage allows the creation of crypto-casinos, which are gaining popularity. Moreover, the security of such casinos is at a high level due to the blockchain and significantly surpasses gambling casinos with fiat currencies in popularity.

Ease of doing business

In Costa Rica, the launch of a gambling business is simplified due to the minimum requirements for verification of companies and the lack of need to collect a large amount of documentation for regulators. In addition, complex testing is not required for gambling software, making it easier and faster to enter the market.

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Disadvantages of having a Costa Rica Gambling License

Despite the large number of advantages, gambling in Costa Rica has several disadvantages:

Lack of popular payment providers.
Since there is no real gambling license in Costa Rica yet, companies cannot work with providers that are familiar to everyone – Visa, MasterCard, and others.

Limitation of client base
Having a registered business in Costa Rica, you will not be able to serve residents.

Obstacles to opening corporate accounts
Opening a corporate account in Costa Rica for a gaming business is often complicated due to the strong U.S. influence on the country’s banking system, making it difficult to establish banking relationships.

Requirements for obtaining a data processing license in Costa Rica

As there are no specific requirements for gambling companies in Costa Rica, operators must comply with the general legislative rules that apply to any type of business in the jurisdiction:

AML/KYC regulations:
Gaming companies in Costa Rica must follow the national legislation for the prevention of money laundering and terrorist financing (AML/CFT). This includes the obligation to implement a know-your-customer (KYC) policy, as well as maintain customer identification records, monitor financial transactions for suspicious activity, and report it to the appropriate authorities.

Bookkeeping:
Each company must keep accounting records according to local legal standards. Commercial Code requirements are to keep records in Spanish. A ledger, inventory, meeting minute book, and shareholder register must be maintained.

Internal Controls:
Costa Rican gaming companies are required to maintain detailed records for each player, including records of deposits, wagers, and transactions, and make this data available for external audits. They are also required to keep records of all games, including rules, results, and payouts, and provide this information to local authorities for 5 years, while the systems and software of the games must be open to inspection by auditors.

It is prohibited to operate within the jurisdiction:
Confirmation is required that your activities will extend to players living outside the jurisdiction. The ability of local players to access your site should be restricted by IP blocking.

In addition, there are general requirements that comply with the rules of many jurisdictions:

Types of Licenses for Gambling Companies

As mentioned earlier, there is no such thing as a Gaming License in Costa Rica. To carry out its activities, a gambling company acts as a legal entity that is engaged in online gambling.

However, according to local legislation, the company can obtain a data processing license in Costa Rica.

The license, issued by the local municipality of Costa Rica, provides the holder with the following capabilities:

  • Processing customer data.
  • Providing gambling services both online and in physical gaming establishments in Costa Rica.
  • The ability to offer a wide range of gambling games including card games, roulette, craps, sports betting, bingo, keno, and virtual slot machines.
  • Authorization to provide gaming services on the Internet.

However, this license also does not allow to provision of services to residents and is focused only on activities outside the jurisdiction.

How to Start a Gambling Company in Costa Rica

The first step for starting a business in this jurisdiction is to register a company. The whole process takes about 3 weeks together with the preparation of the documentation package.

First, you need to choose a company structure. According to the Commercial Code, there are 6 types of companies:

  • Corporation.
  • A limited liability company.
  • Joint Stock Company.
  • An individual limited liability company.
  • A general partnership.
  • Limited liability company (limited partnership).

Note the incorporation of a corporation or limited liability company, they have significant advantages:

  • There are no initial requirements for the amount of authorized capital.
  • The company’s shareholding is not limited to the possibility of 100% ownership by non-residents.
  • Flexibility in the selection of directors without strict conditions.
  • The company registration process is characterized by high speed.
  • Comparatively low costs of starting a company.
  • Excellent option for the crypto-gambling business, as the law allows wages to be paid above the minimum in cryptocurrency, although the minimum must be paid in fiat.

Registration requirements:

  • Hire a legal representative or local agent who will be responsible for legal matters and operations.
  • The company must have 2 or more shareholders.
  • Rent a local office.

You will also need to collect the following package of notarized documents in Spanish:

  • Articles of Association of the company
  • Power of Attorney
  • Copies of the passports of the beneficiaries
  • Authorization from the Department of Immigration and the Ministry of Health
  • Office Lease Agreement
  • Insurance for employees

After selecting the legal structure for your company, the basic steps for setting it up in Costa Rica include:

  • Verifying and reserving a name for your company.
  • Preparing the documentation package
  • Opening a corporate account in a foreign bank to conduct business.
  • Conducting due diligence checks on all parties involved.
  • Paying the state duty for company registration.
  • Applying to the National Registry of Costa Rica
  • Registration of the shareholders’ agreement (must include complete information on the purpose, main objectives, capital information)
  • Registration with the Internal Revenue Service with the completion of Form D-140 and obtaining a tax number (NIT).
  • Filing a Declaration of Ultimate Beneficial Owner (UBO) with the Central Bank of Costa Rica (the declaration must include personal and contact information, stock and capital information).
  • Registration of the company as an employer with the Social Security Agency.
  • Applying for national insurance and insurance against risks related to the company’s activities.

How to apply for a Data Processing License in Costa Rica

After registering your company in Costa Rica, the process of obtaining a data processing license in Costa Rica includes the following steps:

Prepare documentation:

Step 1

  • Make sure you have all the necessary incorporation documents, including a business plan and identification documents for shareholders and directors.

Additional evidence:

Step 2

  • Prepare evidence that your company follows internal anti-money laundering and countering the financing of terrorism (AML/CFT) procedures and policies, by applicable laws.

Apply:

Step 3

  • Complete the electronic license application in Spanish and submit it to your local municipality.

Waiting for review:

Step 4

  • The municipality will review your business to make sure it meets general business standards and criteria. The entire process, with all documents prepared, usually takes about 5 business days.

Find more information about Costa Rica Gaming License

Gambling Lawyers in Costa Rica

Kiryl Zaremba

Position

Senior Associate, Business Development Manager
Leonid Turok

Position

Senior Associate, Head of Sales (FX and iGaming)

Gambling Legislation in Costa Rica

Establishing a gambling company in Costa Rica is a great prospect for startups that plan to engage in gambling activities, but want to test their capabilities before investing in large projects and obtaining licenses in other jurisdictions. In addition, you can test the software, functionality, and interface of the site, and evaluate marketing tools, and the popularity of the platform among players.

At the moment, Costa Rica does not have a legal framework and a separate regulator controlling gambling activities. The authorities are more responsible for the generally accepted oversight of gambling to ensure compliance with general legislation. The main goal of the government authorities is to restrict its citizens from engaging in online gambling, and physical casinos are only allowed on hotel premises.

Under Costa Rican law, the location of online gambling is determined by the location of the players, not the gambling operator. This means that gambling companies can operate their operations from Costa Rica, as long as their financial transactions do not go through the country’s banks and the games are not intended for residents. Entrepreneurs can set up their gambling business in Costa Rica to work with customers outside of Costa Rica while following local laws:

  1. . Anti-Money Laundering Law: Regulates measures to prevent and detect money laundering, including monitoring of financial transactions.
  1. Risk Prevention Regulation: Focuses on the prevention of capital legitimization, terrorist financing, and proliferation of weapons of mass destruction, and requires comprehensive control and documentation of financial transactions.
  1. KYC Policy: Defined in Law 9449 and requires organizations to conduct thorough verification of the identity of their customers to prevent financial crime.
  1. Criminal Code: Includes criminal law provisions, including those related to economic and financial crimes.
  1. Commercial Code (1964): Regulates commercial transactions and legal relations between businesses and commercial entities.

FAQ about Costa Rica Gaming License

Do you need a gambling license in Costa Rica?

Costa Rica does not have a specific Gambling License. However, companies must register as a legal entity and comply with general legislation, including AML/CFT regulations. Gambling companies can obtain a data processing license in Costa Rica. The license issued by the local municipality provides the holder with the following options:

Is it possible to establish a bank account for a gambling company in Costa Rica?

Opening a bank account for a gambling company in Costa Rica can be difficult, as local banks often avoid servicing gambling transactions. This means that even if it is technically possible to open an account for a gambling company in Costa Rica, in practice banks may refuse service or make it difficult to conduct gambling transactions.

What is the cost of a gaming license in Costa Rica?

The cost of obtaining a data processing license in Costa Rica depends on the nature of the business and specific requirements. On average, the first year’s fees are approximately $6,500.

Are there audits for gambling companies in Costa Rica?

Although Costa Rica monitors gambling companies for compliance with anti-money laundering and counter-terrorist financing legislation, the government does not interfere in the regulation of gambling activities and does not impose strict requirements typical of other jurisdictions.

What are the tax obligations for a Costa Rican company holding a gambling license?

A Costa Rican company with a gambling license that makes profits outside the country is exempt from income and corporate tax. This provides benefits to international businesses by reducing the tax burden and increasing profits.

How much is the yearly licensing fee for a gambling company operating in Costa Rica?

On average, when initially registering and obtaining a license to process data in Costa Rica, companies typically face initial costs of around $6,500. This amount includes government fees and other registration-related costs that must be paid in the first year of operation.

Is it legal to gamble in Costa Rica?

Gambling is not illegal in Costa Rica, but there are certain restrictions. Costa Rican gambling companies cannot offer their services to residents of the country. That is, while gambling itself is legal for Costa Rican citizens and residents, locals cannot use the services of local online casinos or bookmakers. The only exception is offline casinos on the territory of hotels.

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