A client of mine gave me a call very alarmed after reading your note on this law published on last Monday’s issue under the title “Anonymous corporation may be thing of the past.” No wonder he was panicked, as, according to your note after this bill all sociedades anónimas will have to report their shareholder’s list to the Registro Nacional which could have disastrous implications for the privacy of businesses in Costa Rica.
According to your note this new bill “requires corporations to disclose the names of their shareholders to the Registro Nacional. This is the same bill that authorizes officials to assess a tax when the shares of corporations are transferred. Until now such a transfer was tax-free. The bill would assess a sales tax on what is being called an indirect transfer. There are a few exceptions for certain types of transfers.”
It adds that “A.M. Costa Rica may be the only English-language news source to report this information. The bill gained final legislative approval Aug. 27, and this newspaper reported that fact in the edition the next day. Some readers have expressed surprise at the scope of the measure and the fact that there has been no obvious objection to it by the business community.”
Well, it is maybe because there is no reason at all to object it. In the first place, the bill does not, in any way, say what your note states it does. The matter in point is related to the amendment of article two of the property transfer tax, by including the notion of indirect transfer, which would occur when the controlling power over a real estate owning corporation is transferred to a third party via stock transmission or sale. Through this mechanism the government expects to be able to collect the property transfer tax on those instances when it is the shares, not the property itself what is being sold or transferred by any other means.
The other relevant amendment this bill makes is to article 252 of the commerce code regarding the faculty it gives to the Registro Nacional to “legalize” the shareholders registry books. This faculty presently belongs to the Dirección General de Tributación, and it only consists in stamping the first page of the book to make it official.
What will happen should this bill finally is signed, is that for all new corporations, the Registro will have the obligation to furnish it together with those of shareholders assembly
minutes, and from then on, the situation remains the same as always: corporations have the obligation to write on it who owns the capital for the only purpose to credit who has the right to participate in its shareholders meetings, remaining, as it has always been, a PRIVATE RECORD.
Nothing is said in the bill under study, about corporations having the obligation to disclose its shareholders to the Registro as your note erroneously points out, neither about the Registro having the faculty to require the book contents to be shown. This can only be done through a court order.
As to the alleged “sales tax” to be assessed on share transfers, this is another error. Again, nothing is said in the bill about this. The only tax it mentions in relation with the subject is the property transfer tax already referred to, which has always existed. There is nothing about “officials being authorized” to assess a tax on shareholders transfers. The fact is that corporation shares buy-sell operations are, and will continue to be, a sales-tax free transaction and the anonymous corporations will continue to be such.
I would advise you to carefully revise what you publish before creating unnecessary alarms like you did in this case.
* Mr. Valverde Brenes is a lawyer and notary with offices in Guachipelín, Escazú. He may be reached at email@example.com