What is a PEO?

A professional employer organization in Costa Rica, or PEO, is an outsourced service provider that completes human resources functions. PEOs are commonly used by SMEs, startups, and other agile businesses to enable them to grow and scale their business without the burden of managing an internal human resources team. 

A PEO can help your organization hire and manage global talent from anywhere in the world, including Costa Rica. The provider will manage currency exchanges, employment laws, compliance, and the entire payroll process (more on what a PEO service in Costa Rica can help with later). 

Essentially, it’s a PEO’s mission to allow you to focus on more core business activities that earn the business money!

Interested in learning more? Have a look around Skuad's website and get in touch with the team.

What are the benefits of PEO services in Costa Rica?

By partnering with a PEO in Costa Rica, you gain access to a team of experts in all things Costa Rican hiring. Did you know the regular workweek is 48 hours? Or that requesting overtime is a highly complicated task due to mandates? 

Keep reading to learn all the benefits you would gain by working with a PEO to do international business in Costa Rica. 

Recruit top talent from Costa Rica 

Any ambitious and growing company wants to have a solid brand image that attracts talent from all over the globe. Working with a PEO helps shape the image for you. When you have a team of talented workers from all over the world, other candidates will take notice. 

Costa Rica is full of ambitious and hardworking individuals. Don’t let the lack of having a local entity stop you from recruiting global talent! Partner with a PEO in Costa Rica today to expand your hiring horizons. 

Position your business as a global competitor 

Do you want a bit of a competitive advantage over others? Employing talented Costa Rican natives with a host of skills will make you an attractive employer and global competitor. 

A PEO has experts on staff in all of Costa Rica’s laws, employee expectations, and more. You can ensure your candidates will be offered competitive and rewarding benefits and compensation packages. And the best part is you will remain 100% compliant with all laws and regulations! 

Eliminate unnecessary costs 

Once you start adding up the cost of doing business in Costa Rica, you might be surprised by what you see. There are the basics such as starting a new entity and employing workers to run the business, but have you considered the additional costs as well? 

You would have to hire a Costa Rican legal team, for one, and visit the country often to get paperwork and registrations completed. It’s also quite costly to hire and manage an internal human resources team. A team that would require ongoing training to maintain knowledge of changing labor laws in several countries.

Working with a PEO like Skuad simplifies the process — and all for a fraction of the cost.

Gain insight into new markets 

Any ambitious and growing company has dreams of global expansion one day. You can get a head start on that by working with a PEO. You’ll gain insights into the Costa Rican and surrounding markets, giving you a leg up when you’re ready to open new locations or diversify your audience base. 

Avoid the need to set up a new entity in Costa Rica 

If you don’t work with a PEO, the only other option you have for hiring Costa Rican employees is to establish a local legal entity. You will also have to gain permanent residency and complete all registration processes. 

Not only is establishing a new entity a lengthy endeavor, but it can also get very costly. You’ll be subject to the Costa Rica tax rate for employers, discussed below, and all related country laws. You would need to partner with a legal team familiar with Costa Rican laws to remain compliant. 

If you work with a PEO instead, you bypass the need for a new entity and transfer the risks and liability to the PEO. Speak with a global hiring expert at Skuad today to find out more about how we can help your organization scale globally. 

Increase cultural awareness 

You will gain insight into Costa Rican culture when you hire a remote team there. This will help you to become more culturally aware in your business interactions and future transactions. The PEO provider will have the knowledge needed to navigate cultural differences so you don’t offend anyone. 

For example, did you know that Costa Rica is divided into several regions? And that each country has its own set of business culture guidelines? The Skuad team is fully briefed, so chat with us instead!

Maintain compliance with statutory requirements in Costa Rica  

There are many employment laws in Costa Rica that employers must comply with. For example, all employees are required to have a contract with employment terms and conditions outlined for the relationship to be legal. Failing to meet Costa Rican employment laws will result in hefty and swift fines and penalties. 

Payroll 

• Employees are paid on a monthly basis. 
• Wages are paid in local currency, the Costa Rican colón (CRC). 

Costa Rica tax rates and contributions 

Costa Rica income tax for employees: 

• Costa Rican income taxes are progressive and range from 10% to 25%. 

Costa Rica tax rate for employers: 

• Income tax rates for companies range between 10% and 30%. 

Employer contributions: 

• 34.5% of the employee’s salary goes to social security and other government programs
• Christmas bonuses are a requirement and paid by December 20th
• Employers must have a workers’ compensation insurance policy in place 

Additional employee contributions: 

• 10.34% of salary goes to social security and other government programs

Leave 

• Employees in Costa Rica get 9 public holidays.
  
• Workers are entitled to 2 weeks of paid vacation for every 50 weeks worked. Employees who have worked fewer than 50 weeks are allowed 1 day per month.
• Employers are required to pay 50% sick leave for the first 3 days of illness.
• Maternity or adoption leave is paid at 50% of leave (the government covers the other 50%) for 4 months. In the case of multiple births, the worker gets an additional month. Paternity leave is 100% of paid leave for 4 weeks. 

Book a Skuad demo today and see how we’d manage payroll and compliance for your company when doing business in Costa Rica.

What does it cost to build a team in Costa Rica?

The cost of doing business in Costa Rica will depend on the setup you choose. You have two options for hiring global talent: incorporating a business in Costa Rica or working with a PEO. 

Incorporating in Costa Rica  

Setting up a business in Costa Rica is fairly simple in the beginning. but there are many steps involved to keep it going. You can initially start your business with a tourist Visa, but you must obtain permanent residency at some point. 

Without permanent residency, you are not permitted to work in your own business. You are required to hire locals if you open a business in Costa Rica. Before going through the Costa Rica company registration process, it’s important to meet with your Embassy and a legal expert. 

There are often unexpected expenses when starting a business in Costa Rica because many goods and materials have to be imported. It costs between $300 and $1,000 to establish a business. Costa Rica corporate tax rate ranges between 10% and 30%. 

Of course, you can avoid these steps by working with a PEO in Costa Rica instead. The PEO would take on the legal liability and allow you to hire locally without incorporating.

Hiring a PEO in Costa Rica 

Working with a PEO in Costa Rica will allow you to hire talented natives for a fraction of what it would cost to incorporate. With Skuad, you can get started for free and cancel your membership at any time.

We offer PEO packages starting at $19 a month per worker so you can hire, onboard, and pay top workers in Costa Rica. We also offer employer of record in Costa Rica starting at $199 a month per worker. For enterprise businesses, please reach out directly to our team for a custom quote.

Schedule a demo today!

Are you interested in finding out more? Do you want to see our easy-to-use platform in action? Schedule a free demo today to see how Skuad can help your organization grow in Costa Rica!