Costa Rica is getting increasingly popular for registering offshore DeFi companies among entrepreneurs worldwide. The country offers a flexible regulatory approach with a minimal administrative burden. Still, DeFi companies cannot operate adequately without a crypto license. This page unveils the peculiarities of crypto business registration in Costa Rica and the procedure behind it.
Why is Costa Rica becoming an attractive jurisdiction for DeFi projects?
Costa Rica is increasingly viewed as an attractive hub for DeFi because it combines political stability, a growing fintech ecosystem, and a progressive stance on digital innovation. Unlike some countries that have imposed strict restrictions on crypto, the Costa Rica crypto license maintains an open approach that encourages experimentation in blockchain and decentralized finance. The country has a highly educated workforce and a strong tech services sector, which supports the development of advanced projects. Entrepreneurs are also drawn to its tax advantages, particularly in free trade zones that provide incentives for international businesses. Additionally, Costa Rica is strategically located in Latin America, making it a gateway to both North and South American markets.
What legal framework governs cryptocurrency and DeFi activities in Costa Rica?
Costa Rica does not yet have a dedicated cryptocurrency law, but activities related to blockchain, crypto, and DeFi are governed under existing financial, corporate, and AML frameworks. The Central Bank of Costa Rica has clarified that cryptocurrencies are not legal tender but can be used as a form of private transaction. This places crypto and DeFi operations under general commercial law while requiring compliance with AML/KYC rules. These rules are accepted on the international level, and all companies dealing in finance and FinTech must devise internal compliance procedures before applying for licensing.
Do DeFi projects require a special crypto license in Costa Rica?
Costa Rica does not currently have a dedicated “crypto license,” but new legislation is being introduced that will require virtual asset service providers (VASPs) to register with the financial regulator (SUGEF). DeFi projects that act as custodians, intermediaries, or exchanges will likely fall under this framework, while purely decentralized protocols may sit in a gray area. Entrepreneurs should not assume that the permissive environment will last, since Costa Rica is actively aligning its framework with global FATF standards.
What are the key steps to obtaining a crypto license for a DeFi startup?
Setting up a DeFi company in Costa Rica requires thorough preparation, both administrative and in terms of economic substance. To get started and apply for the license, startups typically incorporate a local company, define their activities against the VASP definitions, and build out compliance frameworks. Key steps include drafting AML/KYC policies, appointing a compliance officer, preparing documentation for registration, setting up monitoring and reporting systems, and engaging local legal advisors. A typical set of documents for the license application includes compliance policies in line with FATF recommendations, handling forms for customer complaints, terms of service, a risk disclosure statement, and a privacy policy.
Which government agencies oversee cryptocurrency licensing in Costa Rica?
The main agencies involved are SUGEF, the Financial Intelligence Unit (UIF) for suspicious transaction reporting, the Central Bank for monetary oversight, the securities regulator if tokens qualify as securities, and the tax authority for fiscal compliance. Together, they ensure DeFi businesses follow financial, securities, and tax laws, as well as their general compliance with the global AML/CFT laws.
What compliance and reporting obligations are imposed on licensed DeFi projects?
For DeFi companies in Costa Rica, compliance obligations include customer identification, recordkeeping, suspicious activity reporting, enhanced due diligence, sanctions screening, and internal control systems. While this might seem like a long list, the ongoing obligations in Costa Rica are actually way less stringent compared to onshore jurisdictions. At the same time, even though Costa Rica is only moving toward formal regulation, companies are expected to meet these standards now to avoid banking or enforcement issues.
How does a Costa Rican crypto license benefit DeFi businesses internationally?
Holding a Costa Rican crypto registration provides businesses with both visibility and an improved reputation needed to secure international connections. DeFi companies achieve credibility with banks and partners, strengthen their international compliance posture, and may open access to more markets. This license signals seriousness to institutional partners and aligns the business with recognized global AML standards.
What common mistakes should entrepreneurs avoid when applying for a license?
Many founders underestimate the importance of strong AML and KYC frameworks, but skipping these basics can quickly cut off banking access or bring regulatory trouble. Some assume that being decentralized means they are outside the rules, yet activities like custody, governance, or front-end services can still be regulated. Others fail to keep proper records of who really owns the business, which raises red flags with authorities. Banking relationships are also often left too late, even though local banks want to see compliance readiness up front.
It also helps to design compliance processes early and bake them into onboarding and transaction flows. Setting up clear governance, hiring a compliance officer, and investing in strong security measures will build trust with both regulators and investors. To approach all these processes with diligence and care and avoid the most common errors, it is highly recommended to hire a compliance advisor with a speciality in the FinTech sector.
Email your news TIPS to Editor@Kahawatungu.com — this is our only official communication channel
