Disregarding the Corporate Veil in Costa Rica.
In Costa Rica, corporations have a separate legal personality. This separation protects shareholders from personal liability and allows companies to hold real estate, vehicles, bank accounts, or other valuable assets. In most situations, the corporate veil is respected, and the company is treated as an independent legal entity.
However, this separation can be misused. Some individuals place marital assets inside corporations to avoid including them in a divorce or to prevent the other spouse from accessing their 50% share of the marital estate. When this occurs, Costa Rican law offers mechanisms to prevent fraud and restore fairness.
When can Courts Disregard the Corporate Veil?
Courts in Costa Rica may disregard or pierce the corporate veil when a corporation is used to commit fraud, simulate transactions, conceal assets, or defeat the rights of a spouse during the liquidation of marital property. This doctrine allows the judge to look past the company and determine the real ownership and purpose behind the asset structure.
The power to disregard the corporate veil is exceptional, but Costa Rican jurisprudence confirms that it applies in family law, civil law, and corporate disputes. In divorce proceedings, this doctrine becomes a powerful tool to protect the integrity of the marital estate, especially when high-value assets are placed under corporate structures.
Why Hidden Assets in Corporations are Common in Costa Rica
Using corporations to hold real estate is extremely common in Costa Rica, especially among expats and high-value investors. This structure is legal and often convenient. However, in divorce litigation the same structure can be manipulated to hide marital assets. When this happens, disregarding the corporate veil in Costa Rica is necessary to reveal the true nature of the property.
In many cases, one spouse places homes, land, vehicles, or even business income under a corporate name. If the other spouse is not a shareholder, or if shares have been transferred through simulated acts, it may appear—incorrectly—that no marital assets exist. Costa Rican courts now recognize that corporations can be used improperly to deny the economic rights of a spouse, and judges are increasingly willing to pierce or lift the corporate veil in Costa Rica to prevent fraud.
Share Ownership vs Corporate Assets: What is Considered Marital Property?
One of the central complexities in these cases is the distinction between the ownership of the shares and the ownership of the assets. Legally, a corporation is a separate person, so it holds the assets in its own name. However, family courts focus on the economic substance of the marital partnership, not merely its external form. If the economic value of a property was generated within the marriage—even if formally titled to a corporation—its value may still form part of the estate to be liquidated.
This is why corporations and divorce in Costa Rica often involve an analysis that goes beyond registral ownership. When a spouse argues that “the house is the company’s, not yours,” judges examine whether the corporation is being used as a shield to deny rights. If the corporate form has been abused, courts may declare that lifting the corporate veil in Costa Rica is necessary to ensure a fair distribution of assets.
Simulation and Fraud in Corporate Transfers:
A significant number of disputes involve acts that appear lawful on paper but do not reflect reality. Transfers to relatives, sudden changes of shareholders, sales that lack payment, alterations of officers, backdated documents or offshore layering—these tactics are used to create the illusion that assets were never part of the marital estate.
In these cases, the judiciary carefully evaluates the true intention behind the transactions. If there is evidence of simulation or an attempt to circumvent marital rights, judges may order disregarding the corporate veil in Costa Rica, allowing them to assess the real patrimonial situation. The courts apply principles derived from abuse of rights, fraud of law and good faith to undo any sham transactions and restore the substance of the property to the marital mass.
Evidence Needed to Disregard the Corporate Veil in Costa Rica
Although each case is fact-specific, courts analyze the consistency of corporate activity, the transparency of transfers, the flow of funds, the credibility of the parties, the maintenance of corporate books, and the alignment between the supposed sale or transfer and the real conduct of the spouses. If the corporation functions merely as an instrument for one spouse—without autonomy, independent purpose or legitimate economic activity—this strengthens the justification for piercing the corporate veil in Costa Rica.
Because of the technical nature of these disputes, they require counsel who understands both corporate and family litigation. Many lawyers approach marital property distribution exclusively from the perspective of family law; however, when corporations are involved, the case becomes, in substance, a hybrid proceeding requiring fluency in simulation, corporate governance, patrimonial rights and economic analysis. This is precisely where corporate veil Costa Rica litigation becomes decisive.
Costa Rican Jurisprudence on Disregarding the Corporate Veil
The modern doctrine of disregarding the corporate veil in Costa Rica is rooted in the recognition that legal personality, although fundamental to commerce, cannot be manipulated to cause injustice. Over the past decade, the Costa Rican judiciary—particularly the Tribunal de Familia, Sala Primera, and Sala Segunda—has developed a sophisticated body of case law that aligns with international trends while grounding itself firmly in the principles of abuse of rights, fraud of law and good faith.
One of the clearest and most instructive examples is the Tribunal de Familia’s extensive analysis in the well-known Voto 751-2012. In that decision, the court devoted dozens of paragraphs to tracing the origins of piercing the corporate veil, comparing the American “disregard doctrine,” the English jurisprudence following Salomon v. Salomon, and the continental European evolution led by scholars such as Rabel and Larenz. Costa Rica adopted a balanced approach that rejects pure formalism and instead demands a substantive examination of how the corporate form is being used in practice. The Tribunal emphasized that the absence of an explicit statutory provision does not prevent courts from declaring that a corporation has been employed abusively, because the remedies exist in the Código Civil under the norms on fraud of law, abuse of rights, and the overarching duty of good faith.
This jurisprudence is especially relevant in corporations and divorce in Costa Rica, where one spouse may attempt to isolate marital assets behind a corporate structure. The courts have made clear that the corporate form is not an inviolable barrier. When a spouse uses a corporation to hide property, frustrate ganancial rights, or create a false appearance of separate ownership, the judge may initiate a factual inquiry into the corporation’s structure, books, finances and real purpose. If the evidence shows misuse, the result is lifting the corporate veil in Costa Rica and attributing the economic value of the concealed assets to the marital estate.
Interaction between Corporate Law and Family Law:
A particularly important milestone is the recent Sala Segunda judgment 317-2025, which reshaped the understanding of jurisdiction and property characterization in cases involving cross-border marriages and corporations. Although the matter dealt formally with international competence, the reasoning demonstrates how deeply embedded the doctrine of corporate veil Costa Rica has become in family law.
In that decision, the Sala Segunda held that when a divorce action includes claims to real or movable property located in Costa Rica—even if the spouses reside abroad—Costa Rican courts possess exclusive jurisdiction to adjudicate the rights associated with those assets. The Court reasoned that such claims are not merely personal, but also involve a real dimension, because the liquidation of marital assets necessarily requires the court to examine and determine rights over specific property located within the national territory.
This understanding is crucial: once the court accepts that the liquidation of assets has a real component, it opens the door to examining corporations that formally hold the property. The decision implicitly recognizes that disregarding the corporate veil in Costa Rica may be necessary in order to fulfill the court’s constitutional obligation to provide effective relief. In simple terms, a court cannot meaningfully liquidate a marital estate if it is forced to ignore the corporate structure intentionally created to obscure its composition.
Abuse of Corporate Structures: When the Veil must be Lifted
Both the Tribunal de Familia and the Sala Segunda agree that the corporate form enjoys legal protection only to the extent that it reflects legitimate economic activity. When the formal existence of a corporation becomes a façade for the personal dealings of a spouse, the courts no longer feel bound by the superficial registral appearance. The guiding standard is whether the corporate entity has been used in a manner that distorts the marital partnership, conceals patrimonial reality, or operates as a mechanism to avoid the equitable distribution of assets.
This is why, in complex cases involving simulation, transfers to family members, offshore layering, or sudden changes in shareholder composition, Costa Rican judges carefully reconstruct the full economic history of the marriage. When the evidence reveals manipulation, the judge may declare that the corporation lacks independent substance and was used as a tool of concealment. The result is either piercing the corporate veil in Costa Rica, or, when more appropriate, lifting the corporate veil in Costa Rica to allow the court to examine the underlying assets without being obstructed by formalism.
A Unified Doctrine: Fraud of Law, Abuse of Rights and Good Faith
Costa Rica does not treat the disregard of the corporate veil as an extraordinary remedy reserved for exceptional cases. Rather, jurisprudence places it within the normal operation of articles 20, 21 and 22 of the Código Civil, which prohibit the abusive or fraudulent exercise of rights. A corporation is a right. Its personality is a right. But like every right, it has limits. When a spouse invokes the corporate form to produce a result contrary to the legal order—such as excluding marital assets from liquidation—the court has both the authority and the obligation to intervene.
This integration between private law, corporate theory and family law principles is now standard in Costa Rican jurisprudence. As a result, corporate veil Costa Rica litigation has become an essential tool in preventing injustice in divorce and patrimonial disputes.
Practical Consequences for Foreigners and Expats with Property in Costa Rica
Foreigners and expats who invest in Costa Rica often rely on corporations to hold property, manage assets or structure estate plans. This is a common and legitimate practice. However, when a marriage breaks down or a dispute arises, it becomes essential to understand how Costa Rican courts approach disregarding the corporate veil in Costa Rica and what this means for marital property.
In Costa Rica, it is not enough that a property appears in the National Registry under the name of a corporation. Courts look at the substance of the transaction and the real purpose behind the corporate structure. If a spouse used a corporation to acquire land, build a house, purchase vehicles or manage rental income for the family, the court examines that corporation as part of the marital estate. This occurs even when the shareholder composition changes shortly before separation, or when the corporate books show transfers to relatives or offshore entities. The courts analyze the timeline, the financing, the purpose of the acquisition and the family’s use of the property. When the facts show that the corporation functioned as an extension of the marital partnership, the court may apply piercing the corporate veil in Costa Rica to evaluate the true value of the assets.
For many expats, the most surprising consequence is that the court’s power to look behind the corporation does not depend on any explicit request from the other spouse. Recent jurisprudence confirms that judges may apply lifting the corporate veil in Costa Rica on their own initiative when the integrity of the marital estate is at stake. The goal is to prevent injustice, avoid formalistic barriers and ensure that neither spouse obtains an unfair advantage by using a corporation as a shield. As a result, a spouse cannot rely on the corporate form to exclude real estate, business revenues or investment assets from the ganancial distribution.
The Doctrine´s importance
This doctrine has particular importance for those who acquire property abroad while maintaining corporations in Costa Rica, or who reside overseas but own Costa Rican companies. A corporation registered in Costa Rica remains subject to Costa Rican principles of good faith and abuse of rights. If the corporation holds assets that are part of the marital patrimony, the Costa Rican court may evaluate them regardless of where the spouses live. Likewise, if a divorce is filed abroad but the corporation is Costa Rican, the foreign court may be unable to adjudicate the ganancial rights over those assets, while a Costa Rican court retains jurisdiction. This interplay often requires coordinated litigation in both jurisdictions, which makes early legal strategy essential.
Another practical consequence arises when spouses use corporations for estate planning or asset protection, then face a divorce years later. Many assume that because shares are in their own name, or because they executed intra-family transfers, the corporate structure is insulated from family-law claims. Costa Rican judges do not adopt that formalistic view. The courts routinely examine whether the corporation had real commercial purpose, whether it was actively used in business or whether it served primarily as a domestic or patrimonial vehicle. When the latter is true, the court treats the corporation as part of the marital economy, even if it technically existed before the marriage or was registered abroad. This places the economic reality above the legal form.
For expats who maintain multiple properties, complex corporate arrangements or intercontinental business structures, these principles have immediate consequences. It becomes necessary to evaluate which assets will be examined in a divorce, what evidence is required to show or refute corporate abuse and whether a court may consider certain assets as ganancial even if held indirectly. Understanding this doctrine allows clients to anticipate litigation risks, negotiate with clear expectations and avoid costly surprises.
In summary, corporate veil Costa Rica jurisprudence ensures that marital rights cannot be defeated by artificial structures. Costa Rican courts value transparency, good faith and the real economic function of assets. When a corporation has been used to hold or manage marital property, the court has the authority to look through the structure, identify the underlying interests and incorporate them into the final distribution. For foreigners and expats investing in the country, this doctrine provides stability, fairness and predictability—while also demanding careful planning and legal advice.
Contact us for legal advice on marital property.
At CPG Legal, we understand that many families—especially foreign and expatriate families—use corporations to hold property, manage investments or structure their estate planning in Costa Rica. When a marital or partnership dispute arises, these corporate structures often become the center of the conflict. Our role is to ensure that your rights are fully protected, whether you are defending the integrity of a corporation or seeking to expose a structure created to conceal marital assets.
Our firm approaches disregarding the corporate veil in Costa Rica with the depth of a litigation practice that has spent decades handling complex corporate, civil and family law disputes. We begin by examining how and when the corporation was formed, who contributed capital, how assets were acquired and whether the structure served a legitimate commercial purpose. If the evidence suggests fraud, simulation or abuse of corporate form, we prepare the evidentiary strategy necessary for the court to apply piercing the corporate veil in Costa Rica and recover the value of the underlying assets for the marital estate. If you wish to learn more about family law, visit our Family Law page.
Dr. Christopher Pirie Gil.