Understand the Jurisdictions Setup Requirement Before Proceed Your Dominican Republic Company Formation
Located at the Island of Hispaniola, the Dominican Republic is a beautiful country to open a business. Santo Domingo is the capital of the Dominican Republic and its largest city. Mostly a multiracial country and Spanish is the official language. They have the second-largest economy compared to other Caribbean countries and nations in Central America. The biggest income generators are the agricultural sector, service sector, mining, and tourism. The popular Pico Duarte, the tallest mountain peak in the region is here. Dominican Republic company formation can use this attraction to advertise a business.
The Dominican Republic is attracting tourists because of its beauty, and investors as well. If you are planning to set up a business here, you can choose from a Limited Liability Company, Joint Stock Company, Individual Enterprise of Limited Liability Company, or a Simplified Joint Stock company.
Dominican Republic Company Formation
Limited Liability Company (LLC) Process
The LLCs must have at least two shareholders, but not exceeding fifty. In order to form an LLC, the capital should be at least $2,200, which must be a full payment. It divides into shares with a par value of $2 each.
The LLC shares are non-negotiable, and the 3rd party transfers that are currently shareholders that need the approval of 75% votes from the company. Certain cases are an exception, like if the person doing a transfer has a beneficiary. If the transfer is rejected, the question shares must be bought or redeemed by other company shareholders. LLC management is the responsibility of managers or board members. The managers should be persons and not other companies unless you can see it in the bylaws.
With regards to the employees, the Dominican Employment Law is strict and most of it favours the employee. They implement strict holiday rules, working hours, and minimum wages depending on which sector. Furthermore, employees must receive a one-month additional wage during Christmas, and in case of dismissal, they have the benefits for liquidation. You also must register all company employees with the Tesoreria de la Seguridad Social, within three days after you hired them.
You must file for the National Taxpayers Registry which is done at the DGII and then apply for fiscal receipts that take about 25 days. With no use of fiscal receipts, the business is unable to issue an invoice to clients. The DGII makes sure that the company’s operation is real and domiciled at the Dominican Republic. After this, a document will show that permits the company to operate.
There are tax-free zones in the Dominican Republic, which allows taxation flexibility and allow lower wages that can pay to the staff members. Most cities have Tax-Free Zones, and more than one. They have high walls, security, and fences, and everything being manufactured there are for export only. Most of them are call centres, and producers of clothing, tools, jewellery, and shoes.
Bank Account Set Up
The new law to prevent money laundering states that the person must be present when they set up a bank account. They must have the tax ID number and needed documents for business incorporation, and the forms filled out. The process could take about 20 to 30 days, which depends on the procedures they need at the UBO validation.
Strong Counterpart Relationships
The Dominican Republic’s society focuses on the family because of their Spanish background and the value has close personal relationships. Due to their occupation history, this is normally the case that outsiders must earn their Dominican acquaintance’s trust before forming a relationship. That is why Dominican people tend to have a formal approach and it might several meetings before finalizing decisions. However, they are popular to be very friendly, appreciate the patience, down to earth, and they are loyal once trust has been established. Therefore, they form strong bonds with their counterparts.