Hire in Costa Rica
Republic of Costa Rica, 5.2 million population, $13,100 GDP per capita. Everything you need to know about employment law, tax, compliance and hiring in Costa Rica.
Capital
San Jose
Currency
Costa Rican Colon (CRC)
Languages
Spanish
Time zones
UTC-6 (CST)
Hiring overview
- Typical time to hire
- 1-3 weeks for contractor, 3-5 weeks for full-time
- Entity requirement
- Costa Rican SA or SRL. Registration at Registro Nacional.
- EOR available
- Yes, from $399/employee/month through a Corpshore entity
- Contractor of record
- Yes, from $39/worker/month
Employment law
- Standard workweek
- 48 hours (daytime) / 36 hours (nighttime)
- Maximum weekly hours
- 48 hours
- Minimum annual leave
- 12 working days (2 weeks) after 50 weeks
- Public holidays
- 11 per year
- Maternity leave
- 4 months (1 before + 3 after), paid through CCSS
- Paternity leave
- No statutory provision; some companies offer 3-5 days
- Notice period
- 1-3 months depending on tenure
- Severance
- Cesantia: 19.5 days per year for years 1-3, increasing to 22 days for years 7+. Maximum 8 years counted.
- Probation
- 3 months
- Overtime rules
- 1.5x (50% premium). Maximum 4 overtime hours per day.
Tax overview
- Income tax range
- 0% to 25%
- Corporate tax
- 30%
- Social contributions
- Employer: ~26.5% (CCSS, pension, worker risks). Employee: ~10.5%.
- VAT / GST
- 13% (IVA)
- Tax year
- Calendar year
- Treaty network
- ~5 tax treaties; limited network
Compliance landscape
- Worker classification
- Codigo de Trabajo presumes employment. Independent contractor arrangements are possible but courts apply subordination test.
- Data protection
- Ley 8968 (Protection of the Person against Processing of Personal Data, 2011). PRODHAB (Agency for Protection of Citizens' Data) enforces.
- Right to work
- Work permit required for foreigners. Employer must demonstrate local unavailability.
- Non-compete
- Limited enforceability under Costa Rican law. Courts favour worker's right to employment.
- Collective bargaining
- Protected under the Constitution and Codigo de Trabajo. Public sector has strong unions. Solidarismo (employer-sponsored worker associations) is a unique Costa Rican institution.
Payment rails
SINPE (Sistema Nacional de Pagos Electronicos) handles interbank transfers. SINPE Movil enables instant mobile payments.
Key considerations for hiring
- Aguinaldo (13th salary) is mandatory, paid in December
- Costa Rica has the highest English proficiency in Central America
- Free trade zones offer significant tax incentives for qualifying companies
- Intel, Amazon, and HP have major operations; strong tech and shared-services talent pool
Business and cultural context: Costa Rica
Business culture
Pura vida (pure life) ethos. Friendly, egalitarian, and relationship-focused. Business pace can be slower than in larger economies.
Key industries
Talent pool strengths
Historical context
Costa Rica abolished its military in 1948, redirecting defence spending to education and healthcare. This produced one of Latin America's highest literacy rates (98%) and a skilled workforce that attracted Intel's first Latin American fab plant in 1997, kickstarting the country's high-tech sector.
Ready to hire in Costa Rica?
Use our EOR service from $399/month and we handle employment law, payroll, tax and compliance in Costa Rica for you.