By Roger A. Petersen
Attorney at Law

Introduction: With the proper guidance and preparation, Costa Rica can be a profitable place to establish a business enterprise while enjoying the tranquility and diversity of the countryside. The business practices, customs and organization that you may be accustumed to in your country of origin may not be applicable to those in Costa Rica.

Be patient, learn the procedures and the local way of doing things before you embark. If you arrive trying to change the country, attitudes and practices you will be in for a surprise. The summary that follows will hopefully assist you in understanding the basic structure of Costa Rican business.

The Costa Rican Political System: Costa Rica is recognized world wide for its stable and democratic political system. All changes of government have occurred by way of free elections which are held every four years. The core of Costa Rica’s democratic political system is its Constitution. Originally adopted on November 7, 1949, it remains in effect today establishing a clear system of checks and balances between the three branches of government: the Executive, Judicial and Legislative.

The Legal System: The Costa Rican legal system is based upon the French civil law system as opposed to English common law used in England and the United States. The common law system relies more on case law which is generated by the judicial system and binding on lower courts. In the civil law system the laws passed by the legislature are codified into codes which are then applied by the courts. Only the decisions of the Supreme Court of Costa Rica are binding on the lower courts. The court system is made up of: Lower Courts, trial Level Courts, Appellate Courts and the Supreme Court.

At the present time, delays in processing claims through the legal system are a serious problem. There is a backlog of cases and the government does not have the financial resources to adequately staff and modernize the judicial system to handle those cases.

The country has recently passed legislation which allows for private mediation and arbitration services in the hope that more cases will be resolved by way of alternative dispute resolution methods.