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Hiring Employees & Recruitment Requirements in Costa Rica


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Costa Rica is one of a great Central American commercial jurisdictions. The region is very stable economically and has a rapidly growing service sector. For these reasons, many foreigners are looking towards Costa Rica as an attractive investment destination. Before engaging in the employment process in Costa, it is important to be clear on employment law, in addition to identifying the best method to hire staff.

Unsure of your employment requirements and obligations? Undecided on the best method to hire staff? Stay informed and watch our short presentation below.

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Hiring Employees & Recruitment Requirements in Costa Rica

  1. 1. Hiring Employees + Recruitment Requirements in Costa Rica
  2. 2. Key Considerations: Employment Find below, some of the key considerations that should be taken into account before contracting staff in Costa Rica Yes – 90 days Is there an employee probation period? Yes Do staff need a local employment contract? Yes Can expatriate staff be hired? Minimum of 14 days Vacation entitlement Max employer contribution is 26.3% Total cost of employment Employers - they must also pay employee’s social security Who manages withholding tax? • Christmas Bonus • Medical Insurance • Life Insurance • Savings fund Employee benefits
  3. 3. Pathways to Hiring Staff Through a local legal entity Through a PEO solution: Professional Employer Organization
  4. 4. Forming a Legal Entity in Costa Rica In Costa Rica, there are (2) main types of legal entities: The Limited Liability Company (LLC) and The Joint-Stock Company (Business Corporation) Advantages: • Greater control of your employees • Better knowledge of local market, laws and regulation • Viewed more positively than a PEO solution Disadvantages: • High set-up/ongoing costs • Administration involved in managing a local company • Accounting and tax obligations
  5. 5. Professional Employer Organization Advantages: • You can operate without forming and maintaining a local entity • Limited legal responsibility • Cost-effective way to convert international contractors into employees Disadvantages: • The PEO becomes a co-employer • Loss of control • Costs involved with PEO services • Compromised company culture International PEO is a method to employ staff without having your own company
  6. 6. Are you looking to hire staff? As you are now aware, you have two options to hire staff: a) Through a Local Legal Entity or b) Through a PEO solution Need assistance hiring employees? Partner with Biz Latin Hub to learn how we can support you and your business in Latin America
  7. 7. Doing Business in Costa Rica? Learn More Here! How to Open a Company / Corporate Bank Account in Costa Rica? Different Types of Companies / Legal Entity Structures in Costa Rica 10 Steps to Register a Company in Costa Rica with an Incorporation Agent