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- Merger Control Regime
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2. Nature of merger control regime
2.1 Mandatory or voluntary
2.1.1 Is filing mandatory or voluntary?
2.2 Suspensory effect
2.2.1 Must completion of the transaction await clearance by the relevant authorities?
Transactions may be closed before clearance. Merger notification must be submitted no later than five days after closing.
1. What type of transactions are caught by the merger control regime?
1.1.1 Type of transactions that are caught by the merger control rules?
A transaction is caught by the merger control rules if it brings a change of control resulting from:
- acquisition or divestment of a business;
- any other action that merges companies, associations, shares, capital stock, trusts, management powers or other assets in general that is taken by competitors, providers, clients or other undertakings that have been independent from each other and that results from one or the other of them acquiring the financial control over the other(s);
- formation of a new economic agent under the joint control of two or more competitors;
- any transaction whereby any individual or company, whether public or private, acquires control of two or more undertakings that are independent from each other and that were current or potential competitors up to that point in time.
1.2 Joint ventures
1.2.1 What types of joint ventures are caught by the merger control rules?
Establishment of a joint venture is caught by the merger control rules if it performs all the functions of an autonomous economic entity on a lasting basis, i.e. a so-called “full function” joint venture.
Establishment of a non-full-function joint venture is also caught if the transaction qualifies as a notifiable transaction. Please see Section 1.1.1 above.
1.3 Definition of "control"
1.3.1 How are the concepts of "control" and "change of control" defined?
Control is defined as the capability, de facto or de jure, of exercising a decisive influence over an economic agent or its assets, i.e. the power to adopt or block a decision related to the entity’s strategic commercial behavior.
1.4 Minority shareholdings
1.4.1 Are minority and other interests less than control caught by the merger control rules?
Yes, if the transaction leads to a change of control. Please see Section 1.3.1 above.
2. Establishing jurisdiction for notification of mergers
2.3 General thresholds
Merger filing is needed if:
- The combined asset value or turnover in Costa Rica of the undertakings concerned exceeded 30,000 base salaries during the last financial year; and
- Each of at least two of the undertakings concerned had an asset value or turnover in Costa Rica exceeding 1,500 base salaries during the last financial year.
As of January 2021, 1 base salary unit = CRC 462,200.
The gross turnover of one undertaking concerned and the assets of the other cannot be combined to reach a threshold.
2.4 Other national thresholds for ex ante merger control (e.g. sector-specific rules)
2.5 Foreign-to-foreign mergers
2.5.1 Do any exemptions, special thresholds etc. apply to foreign-to-foreign mergers, i.e. where none of the undertakings concerned is domiciled in the jurisdiction?
Foreign-to-foreign transactions must be notified in Costa Rica if they have an effect in the local market.
At least two of the undertakings concerned must have had activities in Costa Rica at any time during the last two financial years for the transaction to qualify for merger filing (local nexus).
3. Calculation and allocation of turnover, asset value, transaction value etc.
3.3 Relevant undertakings for the calculation of turnover
3.3.1 The undertakings whose turnover is taken into account?
Turnover is calculated on a group level, including the target’s, but excluding the seller’s, turnover.
1. Practical information
1.2 Deadlines for filing
1.2.3 What are the sanctions for not filing a notifiable transaction?
Failure to file a notifiable transaction is sanctionable by fines ranging from 0.1% to 5% of the economic agent’s turn over in Costa Rica during the last financial year. Since all parties to a transaction are legally bound to notify the transaction to the relevant Authority, the fine can be imposed on all parties. The competition authority may also impose fines on natural persons involved in transactions that do not comply with the merger control rules and the transaction to be rolled back.
and last updated March 2021 by
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