By Lic. Ricardo Castillo Castillo · AEGIS Legal Partners · Published May 16, 2026
Reading time: 8 minutes
There is a role that most mid-sized companies need, few have in-house, and many are legally required to appoint: the Data Protection Officer.
For companies operating in Costa Rica — particularly those with European clients, international data flows, or AI-powered tools — the DPO is not optional under GDPR. And even where it is technically optional, the absence of a designated data protection point of contact creates a gap that regulators, clients, and insurers are increasingly unwilling to overlook.
This article explains what a Data Protection Officer actually does, when one is legally required, why an external DPO is often the right structure for growing companies, and what to look for when appointing one.
What Does a Data Protection Officer Actually Do?
The DPO is the individual — or organization — responsible for overseeing a company's data protection practices and ensuring compliance with applicable privacy law. The role has three core functions:
Advisory: The DPO advises the organization on its data protection obligations, reviews new projects and products for privacy implications, and provides guidance when business decisions intersect with data law. In practice, this means being consulted before launching a new marketing tool, signing a cloud services agreement, or deploying an AI system that handles personal data.
Monitoring: The DPO monitors internal compliance — policies, procedures, staff training, contracts with data processors. They conduct or coordinate data protection impact assessments (DPIAs) for higher-risk processing activities and maintain the organization's record of processing activities (ROPA).
Liaison: The DPO is the organization's contact point with supervisory authorities — PRODHAB in Costa Rica, national data protection authorities in EU member states. When a regulator makes an inquiry or an individual exercises their privacy rights, the DPO coordinates the response.
What a DPO is not: a legal shield. Appointing a DPO does not transfer liability for compliance failures to that individual. The organization remains responsible. The DPO is the function that makes compliance operationally real.
When Is a DPO Legally Required?
Under GDPR (European Union)
The GDPR mandates a DPO in three scenarios:
Public authorities. All public bodies processing personal data must appoint a DPO.
Large-scale systematic monitoring. Companies whose core activities involve regular and systematic monitoring of individuals at scale — analytics platforms, advertising technology companies, employee monitoring systems.
Large-scale processing of special categories. Companies processing sensitive data (health, biometrics, criminal records, etc.) at scale — healthcare providers, insurance companies, financial institutions.
The threshold for "large scale" is not defined precisely in the GDPR, and national data protection authorities have issued guidance that varies by jurisdiction. The practical standard applied by most regulators: if data processing is central to your business model and affects a significant number of individuals, you likely meet the threshold.
For Costa Rica-based companies with European operations, clients, or users — including SaaS companies, e-commerce platforms, professional services firms with EU clients, and free-trade-zone operations serving European businesses — GDPR's DPO requirements may apply regardless of where your company is incorporated.
Under Ley 8968 (Costa Rica)
Costa Rica's data protection law does not use the term "Data Protection Officer," but it does require every database controller to designate a responsible party (responsable de la base de datos) accountable for compliance. For companies with significant data processing operations, this requirement effectively mirrors the DPO obligation in practical terms.
PRODHAB expects to be able to identify a specific individual responsible for data protection when it makes an inquiry. "The whole team is responsible" is not an answer that satisfies this requirement.
Practical Reality: When You Need One Even If Not Legally Required
Many companies fall below the strict legal threshold for mandatory DPO appointment but operate in environments where the absence of a designated data protection function creates real exposure:
- Client contracts that require a named data protection contact
- Vendor due diligence questionnaires that ask for your DPO's contact information
- Cyber insurance applications that evaluate your data governance structure
- Investors or acquirers conducting data protection due diligence
- Regulatory inquiries that require a competent, responsive point of contact
In each of these situations, having no DPO — or having one only on paper — is a liability.
In-House DPO vs. External DPO: The Real Trade-Off
Companies that need a DPO have two structural options: hire one internally or retain an external DPO service. For most companies outside the enterprise tier, the external model is the more effective choice.
The In-House DPO: When It Makes Sense
An in-house DPO makes sense when data protection is genuinely core to the business — a healthcare platform, a financial technology company, a data broker. In these cases, the DPO needs deep familiarity with internal systems, participates in product decisions from the start, and justifies a full-time salary.
The GDPR also contains a conflict-of-interest provision: the DPO cannot hold a position in the organization that causes them to determine the purposes and means of data processing. In practice, this means the CEO, CTO, Head of Marketing, and Legal Counsel generally cannot serve as DPO for their own organization. This rules out a common workaround.
The External DPO: What It Offers
An external DPO — a lawyer or specialized firm retained on a monthly basis — provides the designated point of contact, the compliance oversight function, and the regulatory liaison capacity without the salary, benefits, and conflict-of-interest constraints of an in-house hire.
For most companies in Costa Rica, the external model offers three concrete advantages:
Cost. An experienced data protection professional as a full-time employee is a significant expense — and one that only makes economic sense if the workload justifies it. An external DPO retainer scales to the actual volume of data protection work required.
Expertise. A law firm specializing in data protection works across multiple clients and jurisdictions. That breadth translates into current knowledge of regulatory developments, enforcement patterns, and emerging standards that an isolated in-house DPO may not maintain.
Independence. The external DPO has no internal politics, no line reporting relationship to a business unit, and no conflict of interest in raising compliance concerns. This is not just a legal requirement — it is what makes the function work in practice.
What an External DPO Service Actually Covers
An external DPO arrangement is not a box-checking exercise. At AEGIS Legal Partners, our External DPO service covers the substantive work that makes a company's data protection compliance real and defensible:
Ongoing advisory. Monthly retainer includes consultation on new projects, vendor agreements, product launches, and any data-related decisions. When your team is signing a new SaaS contract or deploying a new analytics tool, the DPO reviews it before it goes live.
Compliance monitoring. Periodic review of data processing activities, privacy notices, consent mechanisms, and third-party agreements to identify gaps before they become violations.
Data Processing Register (ROPA). Maintenance of the organization's record of processing activities — required under GDPR and essential for demonstrating accountability to PRODHAB.
ARCO request handling. Managing individual rights requests (access, rectification, deletion, objection) within the legally required response windows.
Incident response. In the event of a data breach, the DPO coordinates the response, manages PRODHAB and GDPR notification obligations, and handles communication with affected individuals.
Regulatory liaison. Point of contact for PRODHAB inquiries, GDPR authority requests, and any regulatory correspondence.
Staff awareness. Annual or semi-annual training for the team on data protection obligations relevant to their role.
The DPO and AI Tools: A Growing Intersection
Companies deploying AI tools face a specific data protection challenge that makes the DPO function more critical, not less.
AI systems — from customer service chatbots to employee performance analytics to automated credit decisions — process personal data in ways that are often opaque, difficult to audit, and evolving faster than most internal processes can track.
The DPO's role in an AI-enabled company includes:
AI inventory review. Mapping which AI tools are in use, what data each tool processes, and what legal framework applies.
Data Protection Impact Assessments for AI. Under GDPR Article 35 and EU AI Act provisions, high-risk AI systems require a formal DPIA before deployment. The DPO leads or supervises this process.
Vendor agreement review. Every AI tool that processes personal data requires a Data Processing Agreement. The DPO ensures these are in place and adequate.
Transparency obligations. When AI is used to make decisions that affect individuals, disclosure and human review obligations apply. The DPO ensures these are built into the process, not retrofitted after the fact.
Questions to Ask When Evaluating an External DPO
Not all external DPO arrangements are equal. Whether you are evaluating AEGIS or another provider, the right questions are:
Is the DPO a qualified lawyer? Data protection is a legal function. The DPO needs to understand not just the text of Ley 8968 and GDPR, but how regulators interpret and enforce them. Compliance software alone does not substitute for legal expertise.
Does the DPO have relevant jurisdiction experience? GDPR and Ley 8968 share principles but differ in enforcement, procedure, and regulatory culture. Experience with both jurisdictions matters for Costa Rica-based companies with international exposure.
What does the retainer actually include? Some "DPO services" are notification services that send you regulatory updates. A functional DPO service includes active advisory, document review, request handling, and incident response.
Who is the day-to-day contact? You need to be able to reach your DPO when a contract needs review or a rights request comes in — not submit a ticket and wait for a response five days later.
Can the DPO be listed publicly? Under GDPR, the DPO's contact information must be published and provided to the supervisory authority. The DPO must be a real, contactable person or function.
The Cost of Operating Without One
When something goes wrong — a data breach, a regulatory inquiry, an unhappy client exercising their rights under GDPR — the absence of a DPO is the first thing a regulator notices. It is evidence not just of a compliance gap but of a compliance attitude.
The cost of an external DPO retainer is a fraction of the cost of a GDPR fine, a PRODHAB sanction, or a lost contract with an international client who requires data protection assurance as a condition of doing business.
For most mid-sized companies operating in or with Costa Rica, the right time to appoint a DPO was when they started processing personal data at scale. The second-best time is now.
AEGIS Legal Partners — External DPO Service
AEGIS provides External DPO services on a monthly retainer basis, covering Ley 8968 compliance, GDPR applicability, AI tool review, and full regulatory liaison. Services are delivered in English and Spanish.
Retainer engagements start with a structured onboarding — a review of your current data processing activities, existing policies, and vendor agreements — that gives us a clear baseline from which to manage ongoing compliance.
Book a free DPO Strategy Session: aegispartners.law
Lic. Ricardo Castillo Castillo is the founder of AEGIS Legal Partners, Costa Rica's first law firm specializing in AI Law, Data Privacy, and International Real Estate. He holds Carné #36,687 with the Colegio de Abogados y Abogadas de Costa Rica and serves clients in North America, Europe, and Latin America.
© 2026 AEGIS Legal Partners S.R.L. · This article is for informational purposes only and does not constitute legal advice. For advice specific to your company's situation, contact a licensed attorney.