Limited Poder Generalísimo: Protect Your Business Assets in Costa Rica
If you are a foreign investor with a business in Costa Rica, you have probably heard the phrase: “You need a Poder Generalísimo (General Power of Attorney).” It is normal for this news to generate concern. What exactly is it? Are you really handing over the “keys to your house” to someone? The answer is no — provided the power is structured with the correct limitation. At Mora, Yglesias & Asociados, we have spent over 80 years structuring limited Poder Generalísimo powers that meet the requirements of Costa Rica’s National Registry and the Central Bank, without compromising our clients’ asset protection. This guide explains how the strategy works.
Why Is Limited Poder Generalísimo Now Mandatory in Costa Rica?
Costa Rica’s National Registry recently changed its policies: it no longer accepts Special Powers for critical procedures such as the RTBF declaration (Registry of Transparency and Final Beneficiaries) and other essential procedures. This change directly affects foreign investors who establish businesses in the country and need to operate without continuous physical residence.
Since the RTBF declaration can only be submitted with a digital signature from Costa Rica’s Central Bank — a credential that is granted only to citizens or legal residents — foreign investors need to appoint a trusted person as their agent through a Poder Generalísimo (General Power of Attorney). For many, this sounds terrifying. But there is a clear and proven solution: the Poder Generalísimo (General Power of Attorney) with express limitation on asset sale.
What is Poder Generalísimo and Why Does It Raise Concerns?
The Poder Generalísimo (General Power of Attorney) is the broadest type of power of attorney in Costa Rican legislation. In its standard form, it grants the agent authority to act in virtually all matters of the principal: sign contracts, conduct transactions, manage obligations, and also buy, sell, mortgage properties and dispose of assets. This last point is what generates legitimate concern.
The scenario we frequently hear at Mora, Yglesias & Asociados: a U.S. investor with an S.R.L. who owns a real estate property thinks: “They are asking for a Poder Generalísimo (General Power of Attorney). Did I just hand someone the keys to sell my house?” The answer depends on one thing: whether or not the power includes the correct limitation. A well-structured Poder Generalísimo (General Power of Attorney) is safe. A power without limitations is risky.
The Solution: Express Prohibition on Asset Disposal
The key is simple. When granting the Poder Generalísimo (General Power of Attorney), an express clause is included in the public deed that prohibits the agent from disposing of company assets. With this limitation correctly drafted and registered with the National Registry:
The agent can sign contracts, manage administrative and regulatory procedures, submit declarations to the Central Bank, pay taxes, and act on behalf of the company in tax or labor proceedings. The agent cannot sell, transfer, mortgage or encumber any asset of the company — whether real estate, vehicles, shares or any other registrable asset. Any asset disposal requires a specific and separate authorization from the Shareholders Assembly or Partners Assembly, depending on the type of entity.
This limitation is documented in the public deed and registered with the National Registry. If someone attempted to use the power to sell a property, the Registry would see the express prohibition in the deed and would reject the transaction. The legal barrier is insurmountable.
Powers of the Agent: Authorities and Restrictions
An agent with limited Poder Generalísimo (General Power of Attorney) can: submit RTBF declarations to the Central Bank, pay corporate taxes to the Tax Authority, submit Form D-195 and other informative declarations, sign service, supply or lease contracts, act in administrative, tax and labor proceedings, and manage any transaction that does not involve asset disposition.
An agent with limited Poder Generalísimo (General Power of Attorney) cannot: sell company real estate, mortgage or encumber assets, transfer shares or partnership interests, or dispose of any registrable asset of the company. This delimitation is the heart of protection. At Mora, Yglesias & Asociados, we structure each Poder Generalísimo (General Power of Attorney) with the recommended features according to our clients’ needs, ensuring that you maintain total control over your assets while enjoying agile executive operation.
Who Grants the Poder Generalísimo?
The Poder Generalísimo (General Power of Attorney) is granted by the company itself, through its legal representative or another corporate body such as the Shareholders Assembly or Partners Assembly, as appropriate. It is not granted by the attorney — the attorney advises and formalizes the process before a notary public. The intervention of a notary public is required to formalize the public deed. This is a step that must be carried out with a reputable law firm that ensures the non-disposition clause is correctly drafted and registered with the National Registry of Costa Rica.
When the legal representative can appear before a notary in Costa Rica or before a Costa Rican consul abroad, the procedure is carried out directly. When this is not possible, at our firm we seek alternative mechanisms that the law allows to complete the grant remotely, always ensuring that the documentation complies with the strictest legal and registration requirements.
Permanent Validity and Recurring Costs Avoided
Unlike the old Special Power — which required annual renewal and generated recurring costs — the Poder Generalísimo (General Power of Attorney) is permanent until you revoke it. Once granted correctly, it remains in force without the need for annual renewal procedures. This one-time structure significantly reduces administrative costs and provides long-term operational clarity.
Asset Protection for Foreign Investors
The Poder Generalísimo (General Power of Attorney) with non-disposition limitation resolves a real dilemma: Costa Rican authorities require broad powers for certain procedures, but you need protection against misuse. The answer lies in a legal structure that balances both needs. A broad power to manage the company, but with an insurmountable barrier when it comes to your assets.
This strategy allows you to comply with all National Registry and Central Bank requirements, delegate administrative management without asset risk, maintain control over the disposition of company assets, and trust your agent within clear and legally enforceable limits. It is not a matter of distrust. It is about solid legal structures that protect both parties.
Why Other Firms Do Not Address This Adequately
Many law firms structure Poder Generalísimo powers with generic or incomplete clauses that would not withstand scrutiny from the National Registry. Others do not consider the intersection between Poder Generalísimo planning, corporate tax planning, and asset protection — elements that must be integrated from the outset.
At Mora, Yglesias & Asociados, our integrated team addresses each Poder Generalísimo (General Power of Attorney) from every angle: tax, corporate, asset protection and liability. We do not delegate this work to third parties. Our attorneys draft the limitation clause, coordinate with the notary, and oversee registration with the National Registry. We also offer volume pricing when clients structure multiple powers for sister or successive entities.
What Happens if the Agent Sells a Property Despite the Limitation?
If the National Registry receives a request for asset transfer backed by a Poder Generalísimo (General Power of Attorney) that contains the non-disposition clause, the Registry will automatically reject the request. The Costa Rican registration system verifies that the agent’s authorization does not contradict express limitations. If someone attempts to execute the sale privately (without registration), the transfer would have no legal value because real estate and registrable assets require registration with the National Registry to have value against third parties.
Can I Revoke the Limited Poder Generalísimo at Any Time?
Yes. The power is revocable at any time by the company through its legal representative or the Assembly. It is necessary to formalize a public deed of revocation before a notary and register it with the National Registry. The revocation takes effect once recorded.
What If I Need the Agent to Sell a Specific Asset?
You can issue a separate special power for that specific transaction. The limited Poder Generalísimo (General Power of Attorney) remains in force for operational management, but an additional special authorization is issued that allows only the sale of that identified asset. This provides granular control and security: the agent can only do what you expressly permitted in that authorization.
Do These Limited Powers Work in Other Countries for Actions of Costa Rican Companies?
The power is governed by Costa Rican law because it regulates acts of a company established in Costa Rica. However, when you need to present the power to a foreign bank or another jurisdiction, we recommend obtaining an apostilled certification from the National Registry or the notary. Some countries also require official translation. At Mora, Yglesias & Asociados, we coordinate these international authentication procedures to ensure that your power is recognized without objection.
Article written by Lic. Manuel Yglesias Mora, Bar No. 27673, Costa Rica Bar Association, with AI assistance. All content was personally reviewed, edited, and supervised by the author.
This article is for informational purposes only and does not constitute legal advice. For the execution of any action related to the topics discussed, please contact us.