Costa rica

Costa Rica*
INTRODUCTION
General
Capital/Other major cities: San José/Limón, San Francisco, Alajuela,
Liberia, Paraíso, Desamparados
Area: 51,100 km2
Population: 4.134m
Language: Spanish
Currency: Costa Rican colón (CRC)
Country telephone code: 506
National holidays (excl. weekends)**: 2nd half 2007 — Jul 25, Aug 20, Oct 15, Dec 25, 31
200�� — Jan 1, �ar 20, 21, Apr 14, �ay 1, Jul 25, Aug 1��, Sep 15,
200�� — Jan 1, �ar 20, 21, Apr 14, �ay 1, Jul 25, Aug 1��, Sep 15,
Dec 25, 31
Business hours: 0��:00–12:00 & 14:00–1��:00 (�on–Fri)
Banking hours: 09:00–15:00/1��:00 (public/private banks) (�on–Fri)
Stock exchange: Bolsa Nacional de Valores (BNV)
Leading share index: Indice Accionario de la Bolsa Nacional de Valores (IBNV)

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** Source: www.goodbusinessday.com.

Government
Legislature
♦ Democratic republic with a unicameral Legislative Assembly (Asamblea
Legislativa).
♦ Legislative Assembly – 57 members directly elected by popular vote for four-year
terms.
♦ The president is directly elected every four years for one term only. The next election
is to be held in February 2010.
Head of state and political leader
♦ Oscar Arias, president (head of state and government) since �ay ��, 2006. He is a
member of the National Liberation Party (Partido Liberación Nacional − PLN).
Economy 2006 2007
2001 2002 2003 2004 2005
Q2 Q3 Q4 YEAR Q1
Exchange rate* (CRC per USD)** 328.87 359.82 398.66 437.94 477.79 508.99 517.05 517.99 511.30 518.68

Interest rate (lending rate)** % 23.83 26.42 25.58 23.43 24.66 23.61 22.55 17.92 22.19 14.58
Unemployment % 6.1 6.4 6.7 6.5 NA NA NA NA NA NA
Consumer inflation*** % + 11.2 + 9.2 + 9.4 + 12.3 + 13.8 + 12.0 + 11.6 + 9.6 + 11.5 + 9.0
GDP volume growth*** % + 1.1 + 2.9 + 6.4 + 4.1 + 6.0 NA NA NA NA NA
GDP CRC bn 5,395 6,061 6,982 8,127 9,566 – – – NA –
GDP USD m 16,403 16,844 17,514 18,557 20,02 – – – NA –
GDP per capita USD 4,09 4,08 4,90 4,367 4,624 – – – NA –
BoP (goods, services income) as % GDP – 4.6 – 6.1 – 6.2 – 5.4 – 6.1 – – – NA –
* Market rate. ** Period average. *** Year on year. Source: International Financial Statistics, IMF, June 2007.

* Please note that rules, regulations and market practice are evolving. As a result, they may diverge from the formal regulatory framework described in
this country profile and their interpretation may differ accordingly. If you are planning any business activity in the country, we would recommend that
you seek independent advice on the latest market and regulatory developments as well as legal and tax advice.

CASH, TRADE TREASURY CENTRAL AMERICA

Sectoral distribution of GDP (% of GDP)
♦ Agriculture ��.6%
♦ Industry 31%
♦ Services 60.4% (2006)

COUNTRy CReDIT RATINg

Fitch Ratings rates Costa Rica for issuer default as:
Term Local currency rating Foreign currency rating
Short – B
Long BB + BB
Long-term rating alert Outlook Stable
Source: www.fitchratings.com, July 2007.

LegAL AND RegULATORy
Central bank
Established as a result of Law 1130 of 1950, the Central Bank of Costa Rica (Banco

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♦
Central de Costa Rica – BCCR) is an independent institution which operates in
accordance with the Organic Law of the Central Bank of Costa Rica (LOBCCR),
Law 755�� of November 27, 1995.
Bank supervision
♦ The General Superintendency of Financial Entities (Superintendencia General de
Entidades Financieras – SUGEF) is an autonomous entity, operating under the
umbrella of the BCCR, which acts as the supervisory and regulatory authority
for the financial sector in Costa Rica. However, the overall regulatory and policy
framework is determined by the National Council for Financial System Supervision
(CONASSIF), which coordinates the supervision of the financial sector as a whole.
Resident/Non-resident
♦ A company is considered resident in Costa Rica if it is established in Costa Rica or
has limited liability and is undertaking profit-making activities in Costa Rica.
♦ A branch, agency or other permanent establishment of a non-resident company will
also be deemed to be resident.
Bank accounts
♦ Foreign exchange accounts and domestic currency (CRC) accounts can be held
by residents both domestically and abroad, and accounts in domestic currency are
convertible into foreign currency.
♦ Non-resident bank accounts are permitted in Costa Rica, denominated in either
domestic (CRC) or foreign currency. Non-resident accounts in domestic currency
are also convertible into foreign currency.
Reporting
♦ There are no central bank reporting requirements for companies.
♦ The BCCR must be notified about all loans to non-residents from resident privately
owned commercial banks, finance companies and cooperatives.
Exchange controls
♦ The Costa Rican colón (CRC) is Costa Rica’s official currency and is subject to a
crawling peg regime. The interbank market determines the CRC’s external value.
♦ Foreign exchange is traded in the organized electronic foreign exchange market
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(�ONED), although it can also be traded between authorized institutions outside
of the �ONED.
♦ All transactions in the exchange market are subject to an exchange tax. In 2005, the
average tax rate was 10%. Proceeds from this tax have to be transferred to the BCCR
within one day.
♦ Costa Rica is a member of the Central American Common �arket (CAC�).
♦ Exchange controls are issued by SUGEF.
♦ Foreign currency is imported or exported without charge and usually via the
BCCR.
♦ Receipts of proceeds from exports and from invisible transactions and current
transfers must be reported within 90 days of the fiscal year-end.
♦ All profits, dividends, and remittances of interest abroad on payments for invisible
transactions and current transfers, with the exception of remittances to foreign banks,
are subject to 15% withholding tax (see Taxation).
♦ Authorization from the National Budget Authority (comprising the �inister
of Finance, �inister of Planning and the President of the BCCR) is required
for government loans and those from decentralized agencies and state-owned
businesses.
Anti-money laundering/counter-terrorist financing*
♦ Costa Rica has implemented anti-money laundering legislation (Law No. 77��6 of

COSTA RICA
2001 and Law No. ��204 of 2002). Further draft legislation is under review in the
Legislative Assembly.
♦ Costa Rica is a member of the Caribbean Financial Action Task Force (CFATF)
and the Organization of American States/Inter-American Drug Abuse Control
Commission (OAS/CICAD).
♦ Costa Rica has established a financial intelligence unit (FIU), the Centro de
Inteligencia Conjunto Antidrogas/Unidad de Análisis Financiero (CICAD/UAF) and
is a member of the Egmont Group.
♦ Financial institutions are required to report suspicious transactions to the CICAD/
UAF.
♦ However, current regulations only cover those entities (excluding offshore banks)
which are involved in the transfer of funds as a primary business.
♦ All currency transactions exceeding USD 10,000 must be reported.
♦ All individuals carrying cash are required to declare any amount over USD 10,000
to Costa Rican officials at ports of entry.
♦ Account opening procedures require formal identification of the account holder and
beneficial owners.
♦ All records must be kept for at least five years.
* Supplied by BCL Burton Copeland (see www.burtoncopeland.co.uk for background explanatory article).
Data as at March 2007.

TAXATION†
Resident/Non-resident
♦ A company is considered resident in Costa Rica if it is established in Costa Rica or
has limited liability and is undertaking profit-making activities in Costa Rica.
♦ A branch, agency or other permanent establishment of a non-resident company will
also be deemed to be resident.
Tax year
♦ The tax year ends on September 30.
♦ Banks and other financial intermediaries can request the calendar year as their tax
year.
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♦ Corporate income tax returns must be filed by December 15 following the tax year
end, i.e. within two months and 15 days of the tax year end.
♦ In �arch, June and September companies make prepayment installments totalling
75% of the average tax paid in the previous three years. Any balance must be paid
by December 15.
♦ Companies can get authorization to use a different tax year end.
Corporate taxation
♦ Resident and non-resident companies are taxed on their Costa Rican income.
♦ Businesses operating in the free trade zone are tax exempt.
♦ Foreign sourced income is tax exempt and no credit is therefore given for foreign
tax.
♦ The corporate income tax rates are:
♦ For gross income of less than CRC 31,043,000 10%
♦ Gross income of CRC 31,043,000 to 62,444,000 20%
♦ Gross income of more than CRC 62,444,000 30%
♦ The applicable tax rates are determined according to gross income, but are applied
to net income.
♦ Tax losses can be carried forward and set against the taxable income of the following
three years for industrial enterprises and five years for agricultural enterprises. The
carry back of losses is not permitted.

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Advance tax ruling availability
♦ Costa Rican tax payers may apply for advance confirmation from the tax authorities
regarding the tax consequences of entering into specific transactions.
Property taxes
♦ There is a 1.5% charge on real estate transfers. There is another charge of aproximately
1.5% that corresponds to the stamps that might be paid to the National Registry of
real property.
♦ There is an annual property tax of 0.25% on land, buildings and fixed equipment
based upon registered value, where that value exceeds 45 times the basic wage
(currently CRC 210,600).
Annual business license tax
♦ Local municipalities levy an annual business license tax, which is approximately
0.1% of gross income.
Capital gains tax
♦ Capital gains on depreciable assets are taxed as ordinary income.
♦ There is no capital gains tax on the sale of real estate or securities unless the gains
are generated by way of a company’s normal trading activities.
Withholding tax
Payments to: Interest Dividends Royalties Fees
Resident companies 8%* 5% Nil Nil
Non-resident companies in
15% 5%/5% 25% 5%/25%
non-tax-treaty country
* Only paid by financial intermediaries or entities registered on a stock exchange.

♦ There is no withholding tax on interest payments to recognized financial institutions
and banks.
♦ Dividends paid by companies listed on public stock exchanges are subject to a 5%
withholding tax.

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♦ Payments to parent companies for royalties, etc. may not exceed 10% of gross
sales.
♦ The withholding tax on royalties, dividends and interests paid to non-residents can
be exempted if the non-resident is not able to credit such tax against the income tax
levied in their home country.
♦ Undistributed profits of unlisted companies and branches of foreign companies pay
15% withholding tax on profits irrespective of whether remitted or not. Companies
can avoid this by capitalizing the undistributed profits.
♦ Commercial paper and security issues are subject to an ��% withholding tax.
Tax treaties
♦ Costa Rica has signed double-taxation treaties with Spain, Germany and Romania,
but they have not yet come into force. Costa Rica also has an information exchange
treaty enforced with the US.
♦ Costa Rica is a full member of the Central American Common �arket, which
guarantees free trade among member countries.
Thin capitalization
♦ There are no formal thin capitalization rules in Costa Rica.
Transfer pricing
♦ There are no formal transfer pricing regulations in Costa Rica.

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♦ Recent rulings state that the substance-over-form principle can be used to establish
transfer pricing assessments.
Tax treatment of economic groups
♦ There are no provisions in Costa Rican legislation that permit two or more different
legal entities to consolidate their results for tax purposes are no formal transfer
pricing regulations in Costa Rica.
♦ There are also no provisions permitting the transfer of losses between companies in
a group and no specific rules in relation to the tax-free transfers of assets between
related companies.
Stamp duty
♦ 0.2% is levied on contracts and credit agreements.
Sales taxes/Excise
♦ Sales tax of 13% is levied on most goods and some services.
♦ Sales tax collected, less tax paid to suppliers, is remitted monthly.
♦ Excise taxes are charged on tobacco, alcohol and airline tickets.
♦ Credit and debit card operators have to transfer up to 6% of the sales tax to the Costa
Rican Treasury on the transaction day plus one.
Payroll and social security taxes/social contributions
♦ Companies must pay a Christmas bonus of one month’s salary (15 days for companies
with less than CRC 300,000 net worth).
♦ The following social security contributions are required:
Employer Employee
Social security contributions 26% 9%
Accidental insurance contributions 0.5–22% –

♦ Employers are responsible for collection of the employees’ contributions.
♦ There are no payroll taxes.
♦ NOTE: For over three years, Costa Rica’s government has been promoting a global

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reform in its tax system. This reform would let the government change the actual
system to a worldwide income regulation.
† All tax information supplied by Deloitte Touche (www.deloitte.com).
Data as at March 1, 2007.

BANKINg
Major banks Bank
Total assets (USD millions)*
March 31, 2007
Banco Nacional de Costa Rica (state-owned) 4,630
Banco de Costa Rica (state-owned) 2,774
Banco Popular y de Desarrollo Comunal (special-law bank) 1,596
Banco Interfin SA 988
Banco BAC de San José (Grupo BAC/Credomatic) 993
Banco Banex SA (Grupo Banitsmo) 866
Banco Cuscatlán de Costa Rica SA (UBC International) 520
Scotiabank de Costa Rica SA (Bank of Nova Scotia Group) 396
Banco Crédito Agrícola de Cartago (state-owned) 350

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Banco Improsa SA 332
Banco Promérica SA (Grupo Promérica) 294
Banco Lafise SA (Grupo Lafise) 209
Banco BCT SA 136
Citibank Costa Rica SA (Citigroup) 2
Banco Hipotecario de la Vivienda (special-law bank) 04
Banco Uno (Grupo Financiero Uno) 89
Banco Cathay de Costa Rica SA 58
* CRC 518.68 per USD 1.
Sources: Superintendencia General de Entidades Financieras and www.bankersalmanac.com.

Overview
♦ The banking sector in Costa Rica currently consists of three state-owned commercial
banks, two banks created by special law and 12 private and co-operative banks.
In addition, there are nine non-banking financial entities, 28 savings and loans co-
operatives, two mutual banks dedicated to providing mortgages for housing and one
special financial entity (Caja de Ahorro y Prestamos de la ANDE).
♦ The majority of assets in the banking industry are concentrated among the state-
owned and private banks. As of �arch 2007, the state-owned, private and special-
law banks held 54%, 34% and 12% respectively of the total assets in the Costa Rican
banking sector. The six largest banks currently account for approximately ��2% of
total banking sector assets.
♦ The Banco Nacional de Costa Rica (BNCR) is the largest bank in Costa Rica,
operating both as a commercial bank and as a development bank.
♦ Retail banking in Costa Rica is dominated by the three state-owned commercial
banks – Banco Nacional de Costa Rica (BNCR), Banco de Costa Rica (BCR) and
Banco Crédito Agrícola de Cartago (Bancrédito – BCAC). Nevertheless, Costa
Rica’s privately owned banks offer a wide array of retail and corporate banking
services.
♦ There has been a significant amount of consolidation and foreign investment within
the Costa Rican banking sector since 1999. At present, two-thirds of the privately
owned banks are controlled by foreign investors. They include Banco BAC de San
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José, Banco Banex, Banco Cuscatlán de Costa Rica, Banco Lafise, Banco Uno,
Banco Promérica, Citibank Costa Rica and Scotiabank de Costa Rica.
♦ In September 2006, Scotiabank completed the acquisition of 99.99% of Corporación
Interfin, the parent company of Banco Interfin, for USD 294 million. Scotiabank de
Costa Rica and Banco Interfim will merge in 2007 to create the largest private bank
in Costa Rica. The new entity will be the country’s third largest bank in terms of
assets.
♦ In 2006, HSBC acquired Corporación Banex. Corporación Banex is the parent of
Banco Banex, Costa Rica’s sixth largest bank in terms of assets.

PAyMeNT INSTRUMeNTS
Payment statistics Millions of Traffic
transactions % change (USD billions)* % change
2005 2006 2006/2005 2005 2006 2006/2005
Checks (CLC) 10.7 10.3 – 3.7 19.9 23.2 16.6
Third-party transfers (TT) 0.11 0.16 45.5 15.4 18.3 18.8
Interbank transfers (TI) 0.037 0.039 5.4 30.8 41.3 34.1
Direct credits (CCD) 5.2 6.0 15.4 3.5 4.8 37.1

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Direct debits (CDD) 0.016 0.023 43.8 0.64 0.84 31.3
Other negotiable instruments (COV) 0.064 0.070 9.4 1.6 1.13 – 29.4
Debit and credit cards NA NA NA NA NA NA
*CRC 517.96 per USD 1. NA, not available. Source: Banco Central de Costa Rica.

Cash
♦ Cash is widely used, particularly for low-value transactions. In addition to the
national currency, the colón (CRC), US dollars (USD) are also in circulation and are
commonly used in the tourism industry.
Credit transfers
♦ Credit transfers are used for both high-value and low-value payment transactions.
♦ The Interbank Trading and Electronic Payments System (Sistema Interbancaria de
Negociación y Pagos Electrónicos – SINPE) was developed by the Banco Central
– SINPE) was developed by the Banco Central
de Costa Rica. It comprises Costa Rica’s various electronic payment services as well
as the electronic check clearinghouse. All transactions processed via SINPE systems
are settled through reserve accounts that participants maintain at the BCCR.
♦ High-value, same-day payment transactions that are typically processed through
Costa Rica’s real-time gross settlement system are called Electronic Funds Transfers
(Transferencias Electrónicas de Fondos – TEF). There are two TEF transfer types.
The TI service (Transferencias Interbancarias – TI), introduced in �arch 1999, is
used for interbank funds transfers. The TT service (Transferencias a Terceros – TT),
introduced in �arch 2000, is used for third-party funds transfers.
♦ The number of TT (third-party) interbank transfers increased from 31,400 in 2001
to 164,390 in 2006. For the same period, the number of TI (interbank transfers)
remained relatively flat and was 38,810 for 2006.
♦ Low-value electronic credit transfers are batched and processed through the Direct
Credits Clearing Service (Creditos Directos – CCD), which was introduced in �ay
2001. Low-value electronic credit transfers mainly include payroll and supplier
payments. Funds are available to the beneficiary on T+1. Almost all credit transfers
are denominated in CRC. The �inistry of Finance makes most of the central
government’s payments to government employees and suppliers via direct credits.

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♦ The volume of interbank direct credits increased from 2.43 million in 2001 to
6.03 million in 2006, while the value of direct credits increased from USD 452 million
to USD 4.�� billion during the same period.
Direct debits
♦ Direct debits may be used for one-time or recurring payments provided there is
a signed authorization in place. They are used mainly for utility, tax and other
consumer bill collections.
♦ Interbank direct debits are batched and processed through the Direct Debits Clearing
Service (Débitos Directos – CDD), which was introduced in December 2001. Funds
from direct debits are available to the beneficiary on T+1. Before the introduction
of the direct debit service in December 2001, direct debits were only possible if the
originator and receiver had accounts in the same bank. This service is being actively
used by the �inistry of Finance to collect taxes
♦ The �inistry of Finance also uses a similar direct debit service called DTR (real-
time debits) to collect customs taxes. Customs transactions are confirmed in real
time on T+0 and settlement via direct debit takes place on T+1.
Checks
♦ Checks are used frequently by both businesses and individuals and can be
denominated in USD and CRC.
All checks in Costa Rica are cleared electronically through the Clearinghouse for

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♦
Checks and Other Negotiable Documents (Cámara de Compensación y Liquidación
de Cheques y Otros Valores), which was introduced in April 1997. Funds are
available to beneficiaries on T+1.
♦ While the regulations in Costa Rica permit the truncation of checks by the bank of
deposit, checks are still physically exchanged by the banks.
♦ As a result of the introduction of the new electronic funds transfer systems by the
BCCR, which began in the late 1990s, the number of checks processed by the check
clearinghouse in Costa Rica has decreased by 15% from 12.1 million in 2001 to
10.3 million in 2006.
♦ Checks denominated in CRC represented 90% of the total check volume and 64% of
the total check value processed by the check clearinghouse in 2005 and 60.9% of the
total check value processed in 2006.
Card payments
♦ Debit cards are widely used in Costa Rica.
♦ �any of the major banks, including the three state-owned banks, have their own
proprietary AT� networks, although in 2005 Banco Nacional de Costa Rica and
Banco Popular joined their AT� networks together. �ost banks are also members of
the shared AT� network ATH (A Toda Hora). The AT� network Red Total belongs
to Grupo BAC, which owns Banco BAC de San José.
♦ Most credit cards are issued by banks and other financial service providers under
agreements with Visa and �asterCard. Other card issuers include Diners Club and
American Express.
♦ Some banks have launched a dual-use card (debit and credit) that facilitates electronic
payments via the Internet. Payment can be made in CRC as well as USD.
♦ Prepaid cards are issued by telephone companies and are widely used.

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PAyMeNT SySTeMS
Type
♦ The Sistema Interbancario de Negociación y Pagos Electrónicos (SINPE) was
developed by the BCCR as the platform for the different interbank payment and
settlement systems operated by the BCCR. The following low-value and high-value
electronic transfer and clearing systems were developed and introduced by SINPE
during the past nine years.
♦ The Electronic Funds Transfer System (Transferencia Electrónica de Fondos – TEF)
is a real-time gross settlement system (RTGS). The TEF is used for interbank funds
transfers (Transferencias Interbancarias – TI) as well as third-party funds transfers
(Transferencias a Terceros – TT). Both are executed and settled on a quasi-real-time
basis. Receiving entities have one hour to accept or repudiate transfers. Settlement
in participants’ accounts is immediate and final once the receiving entity accepts
the transfer. There are no amount restrictions for TEF transactions. There is no
queuing mechanism, and transactions that are rejected because of lack of funds must
be re-submitted. Settlement of all TEFs takes place in participants’ accounts at the
BCCR.
♦ The Direct Credits (Créditos Directos) and Direct Debits (Débitos Directos) Clearing
Services (CCD and CDD) are used to send interbank electronic credits and debits.

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There are no restrictions with respect to minimum or maximum amounts. Transactions
are submitted in batches and settled on a multilateral net basis. Settlement of direct
credits and direct debits take place in participants’ accounts in the BCCR. Funds are
available to the beneficiary on T+1.
♦ The Clearing House for Checks and Other Negotiable Documents (Cámara de
Compensación y Liquidación de Cheques y Otros Valores) is a nationwide, automated
clearing and settlement system. It consists of two sub-systems:
♦ The Check Clearing and Settlement system (Compensación y Liquidación de
Cheques – CLC) is the clearing and settlement service for checks denominated
in CRC and USD. CLC operates on a multilateral net deferred settlement basis.
Checks are cleared electronically and physically exchanged in a centralized
clearinghouse facility. Funds are available to the beneficiary on T+1.
♦ The Clearing and Settlement of Other Negotiable Documents (Compensación y
Liquidación de Otros Valores – COV) is the clearing and settlement service for
other paper-based negotiable documents denominated in CRC and USD. The
documents are cleared electronically and are physically exchanged. Funds are
available to the beneficiary on T+1.
♦ The Tax Information and Settlement system (Información y Liquidación de
Impuestos – ILI) is an automated collection system which electronically processes
tax payments that are received by financial institutions on behalf of the central
government. Tax payments collected via financial institutions are automatically
credited to the Ministry of Finance on T+1. The details of the tax payments are
transmitted electronically through SINPE.
Participants
♦ As of May 2007, there were 56 participants in SINPE including the financial
institutions, �inistry of Finance, Social Security Institute and National Insurance
Institute. All entities are required to hold a reserve account with the BCCR in
CRC and USD for clearing and settlement purposes. Reserve accounts cannot be
overdrawn, and (intraday) liquidity is only available through overnight repos with
the BCCR or through the open, interbank liquidity market.
♦ All deposit-taking financial institutions participate in the Clearinghouses for Checks
and Other Negotiable Documents.

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♦ Participation in the CCD and CDD systems is voluntary, but participants must hold a
reserve account with the BCCR to accommodate automated settlement.
♦ Financial institutions that are authorized by the �inistry of Finance to act as tax
collectors for the Government participate in the ILI system.
Transaction types processed
♦ The Clearing House for Checks and Other Negotiable Documents processes checks
and other types of paper-based documents. Other documents can include commercial
bills (letras), promissory notes or certificates of other negotiable instruments.
♦ The CCD and CDD systems process interbank credit transfers such as payroll and
supplier payments, as well as interbank direct debit transactions such as payment
of utility and other consumer bill payments. Both systems are used extensively by
the �inistry of Finance for tax collection and to pay government employees and
suppliers.
♦ The ILI system processes all types of Central Government tax collections.
♦ The high-value electronic funds transfer system (TEF) processes interbank funds
transfers (TIs) related to the money, capital and foreign exchange markets. It also
processes third-party funds transfers (TTs) on behalf of participants’ clients.
Operating hours
♦ The CLC and COV operate from 17:00 to 23:30.
The CCD and CDD services operate throughout the day. Participating banks must

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♦
observe the specific input deadlines established by SINPE.
♦ The ILI service operates from 0��:00 to 14:30.
♦ The TEF service operates from 0��:30 to 17:00.
Clearing cycle details
CLC and COV (checks and other negotiable documents)
♦ 08:00–17:00 T+0: Checks are deposited at banks by clients.
♦ 17:00–23:15 T+0: Banks transmit check presentments to BCCR via SINPE.
♦ 23:30 T+0: Physical exchange of checks.
♦ 09:00–11:00: T+1 Banks transmit return items to BCCR via SINPE.
♦ 11:30 T+1: Physical exchange of return items from T+0.
♦ 12:00 T+1: Settlement of multilateral net positions in participants’ accounts at the
BCCR.
♦ 14:00 T+1: Funds are available to beneficiaries.
CCD and CDD (direct credits and direct debits)
♦ 08:00–24:00 T+0: Banks transmit electronic files to SINPE with electronic credit
and debit instructions.
♦ 24:00–08:30 T+1: Banks transmit electronic files to SINPE with return item
information.
♦ 08:30–10:00 T+1: Settlement of multilateral net positions in participants’ account
at the BCCR.
♦ 10:00 T+1: Funds are available to beneficiaries.
ILI (electronic government tax collections)
♦ 08:00–13:00 T+0: Tax payments are made at banks by companies and individuals.
♦ 08:00–14:00 T+1: Banks transmit electronic files to SINPE with tax collection
information segregating information by type of tax collected.
♦ 14:00 T+1: Settlement of gross positions in participants’ accounts at the BCCR and
credit to the central government accounts at the BCCR.
TEF (same-day electronic funds transfers)
♦ 0��:30–17:00: Sending of interbank and third party electronic transfer instructions.
♦ Within one hour of receipt: acceptance or rejection (repudiation) of the transfer; in
the case of acceptance, this is followed by immediate settlement by crediting the

0


receiving financial institution’s reserve account at the BCCR. In the case of third-
party transfers, the receiving financial institution credits the final beneficiary account
within one hour of receiving the funds.

CASH MANAgeMeNT
Domestic
Notional pooling
♦ Notional pooling is not permitted in Costa Rica.
Cash concentration
♦ Companies operating in Costa Rica frequently maintain an account in CRC and an
account in USD.
♦ Zero balance accounts are offered by some banks. Accounts must be in the same
currency.
Collections
♦ Because the mail system in Costa Rica is not used for sending payments, many
customers make their payments directly at a bank branch. The use of special deposit
tickets (boletas de deposito) or customer codes allows the bank to capture remittance
information about the payment at the time it is made. Remittance information is
provided to the collecting company via electronic banking, file transfer or report.
Some banks provide online payment and remittance information.

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♦ Companies that receive payments at their offices may use an armored car service
(servicio de blindados o transporte de valores), which is typically contracted through
a bank. The armored car service travels to the company’s offices on a specified
schedule to pick up cash and/or checks and then makes deposits at a designated
bank branch.
♦ Cobradores (private couriers or collection services) and/or sales persons are
frequently used by companies to facilitate collections by delivering invoices and
picking up payments from their customers.
Short-term investments
♦ Companies use a variety of instruments for short-term investments, including:
♦ time deposits (depositos a plazo fijo)
♦ certificates of deposit (certificados de depósito)
♦ treasury bills (BE�s)
♦ repurchase agreements (repos).

Cross-border
♦ Cross-border payments are routed via SWIFT and settled through accounts held with
correspondent banks abroad.

eLeCTRONIC BANKINg
♦ Electronic banking is used by companies in Costa Rica.
♦ �ajor banks in Costa Rica offer Internet-based electronic banking systems with
account information and funds transfer capabilities.
♦ During the past few years, Costa Rica’s banks have invested heavily in electronic
banking and online services and offer an array of services via their financial
portals.
♦ Use of Internet services is growing in Costa Rica, and the number of users at �arch
2007 was estimated to be around 922,500 (or 20.5% of the country’s population).
Consumers with Internet access are using financial portals for account inquiries and
to review and pay their utility, tax and other consumer bills.
♦ Costa Rica’s Law 14.276 (Ley de Firmas y Documentos Electrónicos) addresses
electronic documents and signatures.


♦ Costa Rica’s BCCR and SINPE require that all financial institutions use a standardized
bank account code called the Client Account (Cuenta Cliente – CC). The CC is a
17-digit identification code assigned by all financial institutions to each checking
and savings account (in both CRC and USD) of their clients. The CC consists of
the BCCR bank code, the bank branch, checking or savings account and currency
indicators, the client name and a check digit. The CC ensures that all payment and
collection transactions, including checks and electronic transfers, can be executed
rapidly and accurately.

TRADe
Trading partners
Import
♦ USA 41.3%, Japan 5.6%, Venezuela 4.��%, �exico 4.��%, Ireland 4.3%, Brazil 4.2%,
China 4.2%.
Export
♦ USA 42.6%, Hong Kong 6.9%, Netherlands 6.4%, Guatemala 4.2%.

Imports
Documents
♦ In order to import goods into Costa Rica, a commercial invoice (one original and

COSTA RICA
two copies in Spanish) is required, which must include a full description of the
imported goods. Importers are also obliged to provide a bill of lading (one original
and two copies) and a pro-forma invoice.
♦ A packing list is also recommended.
♦ All animals or animal products require three copies of a health certificate.
♦ For imports of flour, lard and seeds a certificate of analysis (three copies) is
mandatory.
Licenses
♦ Licenses are not necessary for the majority of imports.
♦ Licenses are required when importing certain alcoholic beverages, armaments,
certain drugs, pesticides and fertilizers.
♦ An import permit and subsequent registration with the �inistry of Health is required
for certain plants, foods, cosmetics, pharmaceutical and chemical products.
Taxes/Tariffs and other fees
♦ The majority of imports are subject to a customs tariff of ranging from zero to 15%.
♦ A sales tax (IGV) of 13% is also levied on imports with the exception of various
essential items (see Taxation).
♦ Selective consumption taxes (ISC) may also be levied on luxury items (such as
motor vehicles), with rates ranging from zero to 100%.
♦ A free trade zone has been established by Costa Rica with its fellow CAC� (Central
American Common �arket) member countries – El Salvador, Guatemala, Honduras
and Nicaragua.
♦ Costa Rica has also established free trade agreements with CARICO� (the Caribbean
Community and Common �arket), Canada, Chile, the Dominican Republic, �exico
and Panama.
♦ In 2005, Costa Rica signed the US-Dominican Republic-Central America Free
Trade Agreement (DR-CAFTA). Other signatories included Guatemala, El Salvador,
Honduras and Nicaragua.
Prohibited imports
♦ A negative list (list of products that may not be imported) is in operation. It is
prohibited to import certain commodities into Costa Rica in order to protect public
health, national security, and for hygienic and moral reasons.

2


Exports
Documents
♦ An export form is required when exporting goods from Costa Rica.
Licenses
♦ Licenses are needed for exporting an extensive list of various types of goods.
Taxes/Tariffs and other fees
♦ Export taxes are levied on coffee (20% of coffee exports are kept by the government)
and bananas, and in certain cases are graduated to correspond with international
prices.
♦ Certain agricultural products are subject to minor tariffs.
♦ No taxes exist for non-traditional exports to countries outside Central America.
Prohibited exports
♦ There is no published negative list of products that cannot be exported.
♦ Quota restrictions on exports of textiles to the USA were eliminatated in 2005. Since
January 2006, the EU tariff only system applies to Costa Rican banana exports.
Financing imports and exports
Imports
♦ There are no financing requirements for imports.
Exports
♦ There are no financing requirements for exports.

COSTA RICA
gLOSSARy
Banco Central de Costa Rica (BCCR) – Costa Rica’s central bank.
Cámara de Compensación y Liquidación de Cheques y Otros Valores – The Clearinghouse for Checks and
Other Negotiable Documents is a nationwide, automated clearing and settlement system. It consists of two
sub-systems, the CLC and COV.
CCD (Compensación de Créditos Directos) and CDD (Compensación de Débitos Directos) – The Direct
Credits and Direct Debits Clearing Services are used to process interbank electronic credits and debits
respectively.
CLC (Compensación y Liquidación de Cheques) – The Check Clearing and Settlement system is the clearing
and settlement service for checks denominated in CRC and USD. CLC operates on a multilateral net deferred
settlement basis.
COV (Compensación y Liquidación de Otros Valores) – The Clearing and Settlement of Other Negotiable
Documents system is the clearing and settlement service for other paper-based negotiable documents
denominated in CRC and USD.
CRC (Costa Rican colón) – Costa Rica’s official currency.
ILI (Información y Liquidación de Impuestos) – The Tax Information and Settlement system is an automated
collection system which electronically processes tax payments that are received by financial institutions on
behalf of the central government.
SINPE (Sistema Interbancario de Negociación y Pagos Electrónicos) – The Interbank Trading and Electronic
Payments System. SINPE was developed by the BCCR as a common platform for Costa Rica’s different
interbank payment and settlement systems. It comprises Costa Rica’s various electronic payment services as
well as the electronic check clearinghouse.
SUGEF (Superintendencia General de Entidades Financieras) – The General Superintendency of Financial
Entities. An autonomous entity, operating under the umbrella of the BCCR, which acts as the supervisory
and regulatory authority for the financial sector in Costa Rica.
TEF (Transferencias Electronicas de Fondos) – The Electronic Funds Transfer System is Costa Rica’s real-
time gross settlement (RTGS) system, used for interbank funds transfers (Transferencias Interbancarias – TI)
as well as third-party funds transfers (Transferencias a Terceros – TT).

3


USeFUL CONTACTS
Central Bank of Costa Rica (Banco Central de Costa Rica) www.bccr.fi.cr
General Superintendency of Financial Entities www.sugef.fi.cr
Leading banks: Banco Nacional de Costa Rica www.bncr.fi.cr
Banco de Costa Rica www.bcr.fi.cr
Banco Popular y de Desarrollo Comunal www.bancopopular.fi.cr
Costa Rican Banking Association www.abc.fi.cr
�inistry of Economy, Industry and Commerce www.meic.go.cr
�inistry of External Commerce www.comex.go.cr
�inistry of Finance www.hacienda.go.cr
Chamber of Commerce of Costa Rica www.camara-comercio.com
Chamber of Industry of Costa Rica www.cicr.com
Costa Rican Export Promotion Agency www.procomer.com
Costa Rican Investment Board (CINDE) www.cinde.or.cr
Bolsa Nacional de Valores (BNV) www.bnv.co.cr

HSBC CONTACT DeTAILS
�s. �aritza Chong
Senior Vice-president, CIB/C�B �anager

COSTA RICA
Tel: +507 210 7633
E-mail: maritza.w.chong@pa.hsbc.com

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