Surrounded by the sea, the Dominican Republic is one of the countries with the greatest tourist influx, and it is known worldwide as a perfect destination for traveling and tourism. However, the country has so much more to offer.
The Dominican Republic is an ideal market for investors and entrepreneurs for the following reasons:
- Political and economic social stability
- Government support
- Attractive tax incentives
- Strategic location
- It is continuously the highest growth rate in Latin America
- it is the largest receiver of Foreign Investment in the Caribbean
- it has the lowest rate of inflation in Latin America, and
- it has a competitive and qualified workforce
In general, the Dominican Republic offers several opportunities for foreign investors and international businesses looking for new opportunities in Latin America.
Types of business companies in the Dominican Republic
In the Dominican Republic, there are several types of business entities entrepreneurs may choose for business, but the most popular ones include the following:
- The limited liability company (Sociedad de Responsabilidad Limitada or SRL): the SRL can be formed with a minimum of 2 shareholders and a maximum of 50. Its governing body is easier, as it can be managed by a Manager who will act as the legal representative for the company over a six-year appointment.
- An Individual Enterprise of Limited Liability (Empresa Individual de Responsabilidad Limitada or EIRL): this is a limited liability company that can only be incorporated by one individual. There are also no minimum or maximum capital requirements.
- A Joint Stock Company (Sociedad Anónima or SA): an SA is a mercantile company, which can be created with a minimum of 2 or more shareholders. The SA is directed by a board of directors, composed of a minimum of 3 members assigned for terms of 6 years.
- A Simplified Joint Stock company (Sociedad Anónima Simplificada, or SAS): this company structure requires at least two shareholders, and the liability of the shareholders is limited to their capital contribution.
- Foreign Branch Office: a foreign company can also enter the Dominican Republic by establishing a branch.
Steps involved in registering a company in the Dominican Republic
Decide on the company structure that suits your business needs the most
When expanding your business to the Dominican Republic, it is crucial to choose the type of business structure that best suit your business needs. To decide on the best type of company, it is important to keep in mind the number of members or shareholders, the capital available, and the size of the company.
Appoint a legal representative
If the company shareholders are not present in the Dominican Republic, a Power of Attorney will be required that allows a legal representative to carry out the company formation process locally. This Power of Attorney must be signed by the corresponding party.
Choose a name and check the name availability
It is important that the company stands out from its competitors so the founders must choose a unique name for the company.
The name must be different from other brands name established companies in the Dominican Republic. For that, it is better to check for the availability of the company’s name at the Mercantile Registry or Registro Mercantil.
Draft the company’s bylaws
Once you have decided on the applicable business structure and name, you must then establish the internal regulations of the company, known as bylaws. The bylaws will give a legal framework to the partners and members of the board of directors to restructure the company throughout its existence.
Submit the company registration documents to the National Taxpayers Register.
The company must also register as a tax contributor. This has to be done at the Dirección General de Impuestos Internos (DGII). The DGII will appoint a taxpayer ID in the way of a personal identification code, called Registro Nacional de Contribuyentes (RNC) for the company according to the nature of the business.
Pay the incorporation fees
To submit all the required documents to the Commercial Registry, the company must pay a couple of fees and taxes. This fee must be paid at the Internal Revenue Service Office (DGII) and the Banco de Reservas de la República Dominicana.
Register the company in the Chamber of Commerce
Every company in the Dominican Republic must be registered in the Chamber of Commerce at the Mercantile Registry. This process can also be done online through their government website. The following set of documents will need to be filed before the Dominican Republic Company Incorporation process can proceed:
- Signed company bylaws
- General Constitutive Assembly with its related list of Associates
- Distribution list of each partner’s investment to the company and corresponding corporate share amounts
- Application form for company registration that has been duly finalized and signed by the authorized manager,
- Receipt of payment for incorporation tax
- Photocopies of shareholders’ IDs
- Copy of business name registration certificate
It is important that a lawyer prepares and examines all the documents so they can be authorized fast and without any problems. Once approved, the company will officially exist.
Open a corporate bank account
Finally, you’ll need to open a corporate bank account for the business to finish the process to incorporate your company in the Dominican Republic.
The Dominican Republic company registration process may look demanding but with your Damalion expert by your side, it’ll be a smooth process.
Contact your Damalion expert now to register your company in the Dominican Republic.
