When acquiring an already established and operational business in Costa Rica, it is essential to follow the legal structure and procedure set forth in the Costa Rican Commercial Code, known as the Compraventa de Establecimiento Mercantil (Sale and Purchase of a Mercantile Establishment). This procedure is specifically designed to regulate the transfer of ongoing businesses and, when properly followed, provides a substantial level of risk mitigation for the buyer.
Under this framework, the acquisition may include the business as a whole or part of it, together with its essential components. These may encompass clients, know-how, business reputation, operational structure, furniture, merchandise and inventories, patents and trademarks, accounting records and complete business files, as well as industrial designs, models, and other rights derived from commercial, industrial, or artistic property. Unless expressly agreed otherwise, the transfer includes all assets and liabilities that form part of the business.
The process requires the execution of a transfer deed before a Costa Rican Public Notary, signed by the duly authorized representatives of both buyer and seller (and, depending on the case, also by the seller’s shareholders). The deed must be drafted in Spanish and is subject to a key formality: the publication of a legal notice in the official government newspaper, La Gaceta. This notice informs creditors and interested third parties of the transaction and triggers a 15-day period during which they may assert any claims.
As part of this process, the purchase price is not immediately released to the seller. Instead, it is held by a designated depositary during the 15-day notice period. If claims are filed by creditors, they are satisfied from the purchase price. Only after this period expires—or once any claims are addressed—is the remaining balance delivered to the seller.
The importance of complying with this procedure cannot be overstated. According to Section 488 of the Commercial Code, a transaction that does not follow these requirements is considered null with respect to third parties. In practical terms, this means that creditors of the seller may pursue their claims directly against the buyer, and any payment made by the buyer may lack legal validity. The procedure, therefore, is not only mandatory but also a critical safeguard for the transaction.
Beyond compliance, this framework offers several practical advantages. First, it significantly reduces the risk of post-closing claims by third parties. Second, it provides legal certainty, ensuring that the transaction is properly documented and enforceable. Third, it facilitates continuity of operations, allowing the buyer to acquire an ongoing business with its established assets, relationships, and organizational structure.
Finally, the public deed is not the only document that may form part of the transaction. The parties may also execute additional agreements, such as an Asset Purchase Agreement, which can include detailed terms and be drafted in English if appropriate. This agreement is typically referenced in the public deed, ensuring consistency and integration between both documents.
At Lang & Asociados, we regularly assist clients in structuring and executing acquisitions of commercial establishments in Costa Rica, ensuring that all legal requirements are met and that each transaction is carried out with clarity, security, and efficiency.