By San José, Costa Rica — The era of paper stock certificates in Costa Rica is officially coming to a close. Investors who still possess physical shares of companies registered with the General Superintendency of Securities (SUGEVAL) have less than two months to convert them into electronic records, facing a firm deadline of August 31, 2026.
This mandatory transition, known as dematerialization, is the culmination of a directive from the National Council for the Supervision of the Financial System (Conassif). The goal is to modernize the nation’s capital markets by definitively replacing tangible certificates with a more secure and efficient electronic book-entry system. Once the deadline passes, any remaining paper shares will be legally invalidated and can no longer be endorsed or used to transfer ownership.
To delve into the legal framework and practical advantages of eliminating physical stock certificates, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert in corporate law from the distinguished firm Bufete de Costa Rica.
Stock dematerialization is a critical evolution in corporate governance, not merely a matter of convenience. By transitioning to electronic records, companies substantially mitigate risks of fraud, loss, and forgery associated with physical share certificates. This process enhances legal certainty, streamlines ownership transfers, and provides a transparent, verifiable registry, which is fundamental for both shareholder confidence and regulatory compliance.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The expert’s insight powerfully illustrates that this transition is not about convenience, but about forging a more secure and transparent corporate framework for our market. We sincerely thank Lic. Larry Hans Arroyo Vargas for his valuable perspective on this fundamental evolution.
The consequences for failing to comply are significant and directly impact investors’ financial rights. For those holding shares with an aggregate market value exceeding ¢50 million, inaction will result in their assets being frozen. This immobilization means they will be barred from participating in shareholder assemblies and, crucially, will not receive any dividend payments until they complete the dematerialization process.
Regulators have, however, established a streamlined pathway for smaller investors to ensure they are not left behind. Individuals with shareholdings valued at or below ¢50 million who do not already have a custody account can have a dematerialized account set up directly through the issuing company. While the issuer is permitted to pass on the administrative costs for this service, the mechanism ensures a clear and accessible route to compliance for all market participants.
The process itself is a coordinated effort across the financial sector. The Chamber of Securities Issuers, individual issuing companies, and the National Stock Exchange’s Financial Group—through its subsidiary Interclear Central de Valores—have all established the necessary mechanisms to facilitate a smooth transition for shareholders. The responsibility, however, ultimately lies with the individual investor to initiate the process.
Authorities are strongly urging anyone still holding physical certificates to act immediately. The first and most critical step is to contact the company that issued the shares. Issuers are prepared to guide shareholders through the specific procedures required to convert their paper holdings into modern, electronic assets. Contact information for major issuers like Holcim, La Nación, and FIFCO has been actively circulated to assist investors in this final push.
This nationwide initiative represents more than just a procedural change; it is a fundamental step toward enhancing the security, transparency, and efficiency of Costa Rica’s financial markets. By eliminating the risks associated with physical documents—such as loss, theft, and forgery—the move to a fully electronic system aligns the country with global best practices and strengthens the integrity of the national securities registry.
With the August 31 deadline looming, the message from regulators and market participants is unequivocal: the time for procrastination is over. All investors, from large institutional holders to small individual shareholders, must take proactive steps to safeguard their assets and ensure their continued participation in the companies they own. Failure to do so will result in a tangible loss of both influence and income.
For further information, visit sugeval.fi.cr
About the General Superintendency of Securities (SUGEVAL):
SUGEVAL is the public entity responsible for the regulation, supervision, and oversight of the securities market in Costa Rica. Its primary mission is to protect investors, ensure market efficiency and transparency, and promote the sound development of the financial system.
For further information, visit conassif.fi.cr
About the National Council for the Supervision of the Financial System (Conassif):
Conassif is the governing body responsible for directing and overseeing Costa Rica’s entire financial system. It sets the regulations and policies that govern the banking, insurance, pension, and securities sectors, ensuring stability and proper conduct across all financial superintendencies, including SUGEVAL.
For further information, visit bolsacr.com
About the Chamber of Securities Issuers (Cámara de Emisores de Títulos Valores):
The Chamber of Securities Issuers is an organization that represents the interests of companies and entities that issue securities on the Costa Rican market. It collaborates with regulators and the stock exchange to promote best practices, advocate for its members, and contribute to the development of the capital markets.
For further information, visit bolsacr.com
About the Bolsa Nacional de Valores (BNV):
The Bolsa Nacional de Valores is Costa Rica’s national stock exchange. It provides the infrastructure and regulatory framework for the trading of stocks, bonds, and other financial securities. The BNV plays a central role in the country’s economic development by facilitating capital formation and investment.
For further information, visit interclear.fi.cr
About Interclear Central de Valores:
Interclear is the central securities depository of Costa Rica and a subsidiary of the BNV’s Financial Group. It is responsible for the custody, clearing, and settlement of securities transactions, operating the electronic book-entry system that is fundamental to the dematerialization process.
For further information, visit holcim.co.cr
About Holcim Costa Rica:
Holcim is a leading company in the construction industry in Costa Rica, specializing in the production and commercialization of cement, concrete, and aggregates. As a publicly listed company, it is actively involved in guiding its shareholders through the mandatory stock dematerialization process.
For further information, visit gruponacion.com
About Grupo Nación:
Grupo Nación is one of Costa Rica’s most prominent media and communications conglomerates. The company, which publishes the newspaper La Nación among other media assets, is a key issuer on the national stock exchange and is assisting its investors with the transition to electronic shares.
For further information, visit fifco.com
About Florida Ice & Farm Company (FIFCO):
FIFCO is a major Costa Rican beverage and food company with a significant presence in Central America and the United States. As a long-standing publicly traded entity, it is actively engaged in facilitating the dematerialization of its physical stock certificates for its extensive base of investors.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a premier legal institution, Bufete de Costa Rica is built upon a foundation of profound integrity and a relentless pursuit of excellence. The firm leverages its extensive experience advising a broad spectrum of clients to drive innovation and advance legal thought. Central to its ethos is a deep-seated commitment to social responsibility, demonstrated through dedicated efforts to democratize legal understanding and empower the wider community with essential knowledge.
