Holding company bank account in Costa Rica: which bank for your shareholdings?

Family holdings built around Costa Rican assets

A holding company bank account in Costa Rica centralises the dividends, capital contributions and loans of a Costa Rican company that owns shareholdings. Banks open it once the group chart, local substance and every beneficial owner are documented. Many such holdings were set up to own land, hotels or tourism operating companies, each asset housed in its own corporation, so the bank wants to know which entity owns what.

Many Costa Rican holdings were set up to own land, hotels or tourism operating companies, each asset housed in its own corporation. The bank wants to understand which entity owns which asset and who ultimately controls it.

Dividends paid between local companies

Costa Rica levies withholding tax on dividends, with specific rules when the receiving company is itself a local company carrying on business. The exact treatment depends on each entity's situation and should be confirmed by a Costa Rican tax adviser.

Foreign passive income since the 2023 reform

Since Law 10381, a holding in a multinational group receiving foreign dividends or interest may be taxed in Costa Rica if it lacks sufficient economic substance there. Staff, premises and decisions taken locally therefore become decisive.

Substance expected of a holding company

A credible Costa Rican holding holds board meetings in Costa Rica, keeps its accounting books and has at least one director able to explain group strategy. The bank may ask for the minutes of recent shareholder meetings.

Filing owners with the transparency register

Every company in the chain must report its shareholders and ultimate beneficial owners to the register kept by the Banco Central de Costa Rica, or face penalties. A holding owning several companies gives the bank proof that each filing is current.

A small tax treaty network

Costa Rica has signed few double tax treaties, notably with Spain, Germany and Mexico. A Costa Rican holding is therefore generally not a suitable vehicle for reducing withholding tax on dividends from other countries.

Loans between the holding and subsidiaries

For a Costa Rican holding company, advances to subsidiaries should be set out in contracts, with a rate in line with Costa Rican transfer pricing rules. The bank compares those contracts with actual movements and questions the client when funds move without written support.

What a public bank reviews

When opening the account, Banco Nacional de Costa Rica checks the certificate of each company in the chain, the beneficial owner filing, the latest financial statements and the signatories' identity. Shell companies with no activity or identifiable assets generally lead to refusal of a bank account for a holding company.

A holding owned from France

A French resident controlling a Costa Rican holding should look at article 123 bis of the French tax code, which can tax income of low-taxed foreign entities in France. Any personal account in Costa Rica must also be declared on form 3916.

CRS exchange on controlling persons

A passive Costa Rican holding has each controlling person reported to their country of residence by the bank under the CRS. US owners also fall under FATCA, which Costa Rica applies through an intergovernmental agreement.

Opening a holding company bank account in Costa Rica: the steps

To open a holding account in Costa Rica, start by drawing the complete group chart: who owns the holding, which companies it controls and which assets sit in each entity. The bank first seeks to understand the chain down to the beneficial owners. A clear, dated and signed diagram, with the articles of association, noticeably reduces the number of questions from the compliance department.

Then check that every company in the chain is properly registered, has its cédula jurídica and that its filing with the transparency register is up to date. In practice, the bank examines the whole before accepting the relationship, and timing depends on the size of the structure. It is prudent not to tie an important transaction to the opening date.

After agreement, check how the account works: authorised signatories, limits, online banking with several approval levels, SINPE transfers and dollar operations. Test a simple first movement, for example a documented capital contribution, and keep the account agreement. It will serve as a reference if the bank changes its terms or reviews the file.

Documents for a holding company bank account

A holding company bank account first requires the company's papers: deed of incorporation, a recent certificate of legal personality, up-to-date articles and proof of tax registration. Add the powers of the signatories, their identity documents and the list of directors. The bank checks that names and functions match official registers exactly.

Add documents specific to a shareholding structure: group chart, contribution or loan agreements, recent financial statements of subsidiaries, proof of share ownership and beneficial owner filings for each company. If the holding owns real estate or tourism assets, attach the title deeds or operating contracts, to show that the structure has a reason to exist.

Also prepare evidence of substance: minutes of shareholder and board meetings held in Costa Rica, accounting books, and the identity of at least one director able to explain group strategy. Foreign documents generally need an apostille and a Spanish translation. Ask for the full list before starting these steps, which take time and must be recent.

Common mistakes with a Costa Rican holding company

The first mistake is presenting a shell company with no activity or identifiable assets. Public and private banks alike generally refuse this kind of file, because compliance cannot see the economic purpose of the structure. It is better to show the shareholdings, the expected flows and the real governance than to let the bank think of a mere letterbox.

The second mistake is underestimating substance. Since Law 10381 of 2023, a holding in a multinational group receiving foreign dividends or interest may be taxed in Costa Rica if it lacks sufficient economic substance there. Staff, premises and decisions taken locally become decisive, and the bank may ask for evidence of them.

The third mistake is believing that the holding will automatically reduce withholding taxes. Costa Rica has signed few double tax treaties, notably with Spain, Germany and Mexico. A Costa Rican holding is therefore generally not suited to reducing withholding on dividends from other countries. Have the structure validated by a tax adviser before opening.

Questions to ask the bank before signing

Before signing, ask the bank which structures it accepts, how many levels of shareholdings it examines and which documents it requires for each company. Have the maintenance fees, transfer commissions, online banking costs and currency operation costs specified. A written answer helps avoid misunderstandings between the adviser and compliance.

Then question it on how internal flows are treated: loans to subsidiaries, dividends received or paid, capital contributions. It compares these operations with the contracts and with transfer pricing rules, and may ask questions if funds move without written support. Ask which standard documents it expects so that a legitimate operation is not delayed.

Finally, ask how file updates, changes of signatories and account closure are handled. A French resident controlling the structure should examine article 123 bis of the French tax code and declare personal accounts on form 3916; the CRS also reports the controlling persons of a passive holding. Get these points clarified before signing.