COSTA RICA Law and Practice Contributed by: Claudio Donato and Carolina Retana Herrera, Zurcher, Odio & Raven
parties submits the notification. However, failure to file the notification can lead to economic fines for all parties involved, as well as other meas - ures such as divestment or de-concentration in specific cases. The fines range from 0.1% to up to 10% of the parties’ total revenue generated in Costa Rica during the previous fiscal year. Therefore, it is recommended that any compa - ny involved in a transaction seeks specialised advice on competition law in a timely manner, in order to comply with local regulations and avoid contingencies. 3.2 Significant Changes to Takeover Law There have been no regulatory changes sur - rounding takeover law. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies Acquisitions of listed companies in Costa Rica are not common, and stakebuilding tends to be more associated with acquisitions of such enti - ties. Given that 99.9% of acquisitions in Costa Rica involve a private company as the target, stake - building is not customary in Costa Rica, and is infrequent in such transactions. However, it is not uncommon to see transactions for the con - solidation of control in a company one or two years after the first acquisition of shares by the acquirer. 4.2 Material Shareholding Disclosure Threshold There is no general obligation to disclose share - holding interests specifically tied to M&A. How - ever, when a publicly traded company in Costa Rica is involved, any purchaser who directly or indirectly acquires shares – including rights that
may result in subscription – and, as a result, gains control of 10% or more of the company’s total subscribed capital must notify the compa - ny, the stock exchanges where the shares are listed, and SUGEVAL. Notwithstanding the above, any company – regardless of whether or not it is publicly traded – must submit an extraordinary ultimate benefi - ciary declaration to the Central Bank if there is a change in control equal to or greater than 15%. The information disclosed in this filing remains confidential. 4.3 Hurdles to Stakebuilding A company may not introduce rules such as changing reporting thresholds in order to hur - dle stakebuilding. These reporting thresholds are regulated by law and, therefore, they cannot be overridden by modifications to a company’s articles of incorporation or by-laws. 4.4 Dealings in Derivatives Dealings in derivatives are permitted in Costa Rica and are used in more complex transactions. However, it is not a customary mechanism for handling transactions in this jurisdiction. 4.5 Filing/Reporting Obligations While there is no specific filing or reporting obli - gation regarding derivatives, companies must be aware that any derivative granting rights to acquire or subscribe shares should be disclosed when conducting a merger control filing, with it being important for the assessment of the com - pany’s participations and effects in relevant mar - kets. 4.6 Transparency In general, shareholders are not required to dis - close the purpose of their acquisition. However, whenever a transaction triggers merger control
511 CHAMBERS.COM
Powered by FlippingBook