Costa Rica Passes First Franchise Regulation Law

By IDEAS

Costa Rica's Legislative Assembly approved Bill No. 23,448, the Law for the Regulation and Promotion of Franchises, on February 12, 2026, establishing the country's first dedicated legal framework for the franchise business model.

The bill was passed in a second legislative debate with 41 votes in favor. It was sponsored by Representative Ada Acuña Castro of the ruling Progressive Social Democratic Party (PPSD). 

Until now, franchise operations in Costa Rica were governed by a patchwork of provisions drawn from intellectual property, competition, and civil and commercial contract law. The new legislation fills that gap with a comprehensive framework establishing principles, rights, and obligations for all parties involved.

The law is built around five pillars: creating a specialized regulation for franchise contracts; promoting franchises as an economic reactivation tool; providing legal certainty to attract investment and expand options for domestic companies; generating new ventures and employment; and supporting small and medium-sized enterprises (SMEs) within the franchise model. 

Under the law, the Ministry of Economy, Industry and Commerce (MEIC) must establish the conditions and regulations for a new franchise registry within three months of the law entering into force. 

With its approval, Costa Rica becomes the first country in Central America to have specific franchise legislation, and only the third in Latin America to do so, after Mexico and Argentina. 

The bill now proceeds to the Executive Branch for signature and official publication as law.