Why owning the property is not the same as having the permit

Foreign investors frequently buy land or buildings in Costa Rica expecting that opening a hospitality operation will work the way it does at home. They often assume that buying a going business automatically transfers the permits and licenses attached to it. For U.S. or European investors, Costa Rican law has structural differences worth understanding, particularly in the formalities required and the institutions that issue each permit.

In U.S. or European jurisdictions, the liquor license is typically concentrated in one or two agencies. In Costa Rica, the framework is more distributed: the municipal business license, the alcoholic beverage license under Law No. 9047 (Law on the Regulation and Commercialization of Beverages with Alcohol Content)—also issued by the corresponding municipality, but with rules quite different from those for other businesses—the Ministry of Health permit, the INS workers’ compensation policy, and the zoning plan validation must all converge. Each layer has its own timeline and document requirements.

The liquor license is not an asset

Investors who skip this point routinely face six- to twelve-month delays that compromise their opening schedule and first-year returns. Under Costa Rican law, the license is not transferable. Article 3 of Law 9047 states expressly that the license is not an asset. This is a fundamental distinction:

“ARTICLE 3.- Municipal license for the commercialization of beverages with alcohol content

The retail commercialization of beverages with alcohol content requires a license from the municipality of the canton where the business is located. The license that municipalities grant for the commercialization of beverages with alcohol content shall be called ‘license to dispense beverages with alcohol content’ and does not constitute an asset, and therefore cannot be sold, exchanged, leased, transferred, conveyed, or otherwise alienated in any form.

It shall be granted to natural or legal persons who request it for use in the establishment they intend to operate. If the establishment changes location, name, or owner—and, in the case of legal entities, if the composition of the share capital is modified by more than fifty percent (50%), or if any other variation in such capital occurs that modifies the natural or legal persons exercising control of the company—a new license is required for the sale of beverages with alcohol content. To obtain a new license, the natural or legal person must notify the granting municipality within five business days of becoming aware of the change in the circumstances indicated above, under penalty of losing the license.”

Historically, oversight of share or quota transfers in the company holding a commercial license may have been remote, and current enforcement may still be deficient. However, with the Registry of Transparency and Final Beneficiaries (RTBF) in place, the Government now has the tools to detect these omissions.

Estimated timeline and critical path to opening

The most common question among investors is: how long does it take to open? The typical answer is three to six months from formal submission to the municipality, although experience shows substantial variations by jurisdiction.

The municipality is the initial bottleneck. Some have efficient digital systems; others require in-person filings and accumulate delays driven by high demand. Coastal municipalities (Liberia, Puntarenas) tend to process more slowly than San José. Once the municipal review is approved, the Ministry of Health evaluates the sanitary infrastructure, a process that takes two to four weeks if all documentation is complete.

The most frequent source of delay is incomplete documentation. Other obstacles: location conflicts with the zoning plan; a moratorium on new licenses in the area; failure to meet minimum distances from schools or temples. If the location violates Law 9047 restrictions, the application will be rejected.

At Mora, Yglesias & Asociados, we know that for many investors the cost of delay exceeds the cost of specialized advice. We therefore run parallel-track filings when the client prioritizes speed and quality of outcome over the cost of management. Parallel processing significantly accelerates obtaining the permit: every step that can be advanced is advanced concurrently with the documentation already filed before the authorities. Specialized advice typically reduces the cycle to three or four months.

Regulatory framework: simultaneous layers

License classification under Law No. 9047

The type of establishment determines category, hours, minimum distances, and operational restrictions. The list below covers the most common or relevant categories for foreign investors and prospective entrepreneurs; it is not exhaustive:

Class B1 license (bars, taverns, cantinas). Establishments where alcoholic beverages are the central activity. Hours: 11:00 a.m. to 12:00 a.m. Reduced infrastructure requirements (no kitchen or extensive menu required). Mandatory minimum distance: 400 meters from schools, places of worship, hospitals, nutrition centers, and elder-care facilities. Suitable for projects focused on the beverage segment without a developed gastronomic component.

Class B2 license (discos, dance halls, cabarets). Activities involving a dance floor, live entertainment, or cabaret. Hours: 4:00 p.m. to 2:30 a.m. More demanding regulations on occupational safety, maximum capacity, fire safety, and soundproofing. Must comply with the Regulation for Noise Pollution Control. Same 400-meter distance requirement.

Class C license (restaurants serving alcoholic beverages). Authorizes the sale of alcoholic beverages as a complementary activity to food service, on premises. This is the structurally correct choice for any business whose principal activity is gastronomy, since it is the only category that authorizes serving alcoholic beverages alongside food. Specific legal requirements: equipped kitchen; dining room with table service; menu with at least ten options available throughout operating hours; tableware and cutlery; storage and refrigeration areas; and dedicated service staff. Some municipal regulations add further requirements—such as a minimum number of tables or seating capacity—that vary by canton and must be verified specifically.

Class C offers two operational advantages over the B classes: extended hours until 2:30 a.m. (vs. 12:00 a.m. for B1) and a reduced distance restriction of only 100 meters (vs. 400 meters for B1 and B2). Operating windows are longer and the available locations within the municipal territory are significantly broader.

Exception to the location restriction

It is critical to note that there is an important exception to the mandatory minimum distance rule. Article 9, paragraph c) of Law 9047 reads literally:

“c) The use of class A, B, and C licenses shall not be subject to any distance limits when the respective premises are located within shopping centers.”

This exception is a major advantage for entrepreneurs who choose a location inside a shopping center, because it allows them to bypass the otherwise burdensome rule on location.

Municipal business license: the first requirement

Every business that commercializes alcoholic beverages requires a municipal business license from the municipality of jurisdiction. When applying, the sale of alcoholic beverages must be expressly stated—omitting this slows the entire downstream process. Active licenses are granted for five years and are renewable.

Each municipality sets its own additional requirements. Some cap the number of new licenses in their jurisdiction. Others condition the grant on zoning or the regulatory plan. Before committing capital to a property destined for this type of business, we recommend consulting directly with the corresponding municipality and requesting an official document on license availability in the specific area. At Mora, Yglesias & Asociados we perform this verification as part of the initial due diligence on every project.

Required authorizations and permits

Sanitary approval (Ministry of Health)

The Ministry of Health issues an operating permit certifying compliance with hygiene and food safety standards. It requires an on-site inspection of the kitchen, storage, restrooms, ventilation, and food handling. Failure to meet standards may lead to rejection or to requirements for costly adjustments.

Workers’ compensation policy (Instituto Nacional de Seguros, INS)

It is mandatory to carry an occupational risk insurance policy covering all employees. This policy protects against work accidents and occupational illnesses. The INS validates that the employer has met the mandatory protection. Without an active policy, the final license is not granted.

Tax and CCSS compliance

The business must be registered with the General Directorate of Taxation and current with contributions to the Costa Rican Social Security Fund (CCSS). This includes both the employer’s contribution and the employee’s withholding.

Land use

The zone must allow commerce in food and beverages. The municipal zoning plan defines which uses are permitted. Locations in residential zones with prohibitions will require special application (rarely granted) or a different property. In municipalities without a current zoning plan, a mixed-use designation is sufficient and is granted automatically to any property with public-street access, with few exceptions.

Food handler’s certification

Every person who prepares, serves, or handles food must complete the Food Handling Course and obtain the corresponding certification. The Instituto Nacional de Aprendizaje (INA) offers it free of charge; authorized private providers also offer it for a fee. Validity: five years. There are no exceptions; non-compliance triggers infractions and fines.

ACAM license

If recorded or live music is reproduced, an ACAM license (Asociación Costa Rica de Autores y Compositores) is required. ACAM charges a monthly fee for the reproduction of music in a commercial establishment.

Ongoing financial obligations

Once authorized, mandatory quarterly payments must be made under the formula provided in Law 9047. The formula considers number of employees, net sales, and business assets. These payments are not negotiable; non-compliance can lead to suspension and ultimately revocation of the license.

A common case: an operator obtains the sanitary permit but does not complete the liquor license, operating de facto without alcohol authorization. The operator loses the high season waiting for the procedure to close, the authorities detect the non-compliance during a routine inspection, and the operation ends in closure. A few weeks of delay on a single permit can destroy the profitability of an entire year.

A robust accounting system from day one is essential. Quarterly payments must be calculated correctly; mistakes can create significant exposure under a tax audit.

Grounds for revocation

The license may be revoked for: lack of commercial operation for more than six consecutive months without justified cause; repeated default in the payment of quarterly fees (after the corresponding suspension is applied); tolerance of illegal conduct or violence at the establishment; judicially declared dissolution, bankruptcy, or insolvency of the company; and change of control of the company without filing for the new license required under Article 3 (i.e., modification of more than 50% of the share capital or any alteration of effective control).

Once revocation is executed, it is final. To reactivate operations, a new license must be requested. This means a process that starts from scratch, subject to all requirements in force at the time of the new filing.

Sanctions regime

Law No. 9047 escalates from administrative fines to criminal liability with closure of the establishment. With the 2026 base salary set at ₡462,200, the most common infractions—exceeding license limits, operating outside permitted hours, transferring the license, or failing to update share capital—are sanctioned with one to ten base salaries (Articles 14, 17, 18). The sale or mere presence of minors in B or E4 licensed establishments carries one to fifteen base salaries (Article 16), and direct sale to minors triggers criminal liability: six months to three years in prison plus closure, under Article 188 bis of the reformed Penal Code.

Operating without a current license—including the common practice of running on a sanitary permit while the liquor license is still pending—constitutes illegal sale, sanctioned with thirty to sixty days-fine, plus seizure of products (Article 21). Adulteration or smuggling result in immediate cancellation of the license (Article 15), and recidivism in serious infractions activates the definitive cancellation procedure, which forces a new application from scratch (Article 23).

The most expensive mistake we observe is not willful infraction but operation under an incomplete license. The Costa Rican regime privileges prevention: once an infraction is detected, escalation to revocation or criminal liability is rapid and the administrative defense windows are tight.

Frequently asked questions

What should I verify about the premises before signing a lease?

Request a land-use certificate from the municipality confirming that the intended activity (liquor store, bar, restaurant with liquor, etc.) is permitted at that specific location. Also verify that the property has no pending administrative proceedings—closures, noise complaints, or prior sanitary infractions—that could affect the processing of your new license. The previous operator’s license does not transfer to the new tenant: each licensee must initiate its own filing. What can be inherited from the property are prior compliance problems.

What is the difference between obtaining a municipal business license and a liquor license?

The municipal business license is general commercial authorization from the municipality. The liquor license is specific authorization to commercialize alcoholic beverages under Law 9047, granted by the corresponding municipality in accordance with the applicable regulations.

What is the consequence of operating without full authorization?

Administrative closure of the establishment, seizure of products, and a criminal sanction of thirty to sixty days-fine for illegal sale under Article 21 of Law 9047. Criminal liability with imprisonment—six months to three years—is reserved specifically for the sale or facilitation of beverages to minors or persons with cognitive limitations, under Article 188 bis of the reformed Penal Code. The frequent mistake is to assume that operating provisionally on the sanitary permit while the liquor license is being completed is tolerated: it is not, and it constitutes illegal sale from the first service.

Mora, Yglesias & Asociados

Since 1938, our integrated team approaches each case from every angle — tax, immigration, corporate, and estate planning — so you receive complete advice in one place. Fiscal and liability protection is built into every recommendation we make, and we continuously work to improve your experience as a client. With offices in San José and Guanacaste, and service in five languages, we are ready to assist you. Contact us.

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.

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Manuel Yglesias Mora