The Dominican Republic, located in the tropical islands of the Caribbean, is quietly making a name for itself as one of the best places to do business in Central America and the Caribbean. The state’s GDP growth rate has been positive since 2004, and rose by a further 3.7% in the last quarter. The Dominican Republic’s strong supply-side, tempered economy and current infrastructure plans present a fresh and very interesting avenue for doing business.
We explain the ease of starting a business in the Dominican Republic, covering the steps of registering your business, and the financial circumstances of the state and what to look out for in the coming years.
The Dominican Republic is considered one of the more beautiful varieties for doing business in Central America and the Caribbean. Not only does it have a firm legal foundation to help fresh businesses, but it is also favourable to foreign investment. Markus Wischenbart, a well-known international entrepreneur, shares his ideas on starting a business in the Dominican Republic.
The government is working hard to make it easier to do business in the Dominican Republic, and it shows. In the Global Bank Group’s Doing Business rankings for 2020, the Dominican Republic shows improvement in the right areas:
- Business invention
- Dealing with construction permits
- Getting electricity
- Enforcing contracts
- Resolving insolvency.
Start a Personal Business in the Dominican Republic
The Dominican Republic invites a fairly straightforward process of starting a business that typically takes from 2 to 3 months.
Apart from this, overseas traders and merchants have every chance to choose from a number of entities which best suit their business needs. A popular choice for many is the Limited Liability Company, locally known as Sociedad de Responsabilidad Limitada, or SRL. This is often the preferred legal entity in the Dominican Republic because the personal assets of the shareholders are protected from the debts of the firm.
Steps to incorporate the business
Once the traders have chosen their legal personality, the remaining steps for opening a business in the Dominican Republic include:
Appoint a legitimate representative
This person will work on behalf of the business on all legal tasks and assist you in the business registration process. You will appoint this person by drawing up and signing a power of attorney document.
Business Bylaws Plan
These bylaws act as the constitution of your business and outline your governance structure, shareholder information and fee schedule.
Make sure that your company name is available
This can be arranged through the National Office of Industrial Affiliation (Oficina Nacional de la Propiedad Industrial, or ONAPI).
Request and obtain the company name through ONAPI
Agency ONAPI will publish your company name in the national press and accept orders for your proposed title from the public.
This step costs $4,755 USD (approx $90 USD). The district currency unit is Dominican peso.
Pay the registration fee
It is likely to be necessary for you to pay incorporation tax in the process of setting up a company. You can arrange this with the Internal Revenue Service (Directorate General of International Operations) and the Reserve Bank (Banco de Reservas), if applicable.
Register your business
You can then register your business with the Dominican Chamber of Commerce.
The documents you will need to submit at this stage include:
- Articles of Association of the company;
- General Memorandum of Association as well as a list of associates;
- Details of the shareholders’ investments;
- Completed application form for your legal entity, including the original signed power of attorney;
- Receipt of any registration tax paid;
- Copies of ID card;
- Copy of your business name registration with ONAPI.
Obtain a tax identification number for your business
You will need to apply for a tax ID card from your local authority. The national deposit registration authority manages this process.
The documents you will need to submit at this stage include:
- A completed application form for tax registration;
- A copy of your business registration certificate;
- Copy of any registration tax payment receipt;
- Copy of company name registration from ONAPI;
- Copies of identity documents of business partners.
Note: If you employ employees in your business, you also need to register new employees with the Ministry of Labour and Social Security.
The Dominican Republic has the largest economy in the Caribbean and Central America and the eighth largest economy in Latin America. According to the International Monetary Fund (IMF), the country’s nominal GDP reached $85.63 billion in 2018.
The population is about 10.8 million and the labour force more than 4.7 million. The Dominican Republic’s most prominent economic sectors are dominated by the services sector (accounting for around 60% of total GDP), followed by strong industrial and agricultural sectors.
Export activity reached around $10.33 billion in 2017 and the country’s main exports are gold, silver, ferronickel, as well as sugar, coffee, cocoa, tobacco, meat and other commodities. The Dominican Republic works closely with the United States, Canada and the UK, as well as local partners such as neighbouring Haiti and several countries in Europe.
Business opportunities in the Dominican Republic
Market observers expect continued growth in the Dominican Republic, with a strong services sector attracting many multinationals looking for a base to expand in Central and Latin America and/or provide services in major North American markets.
The largely unsaturated economy provides early promotion advantages for opportunistic entrepreneurs and investors. New infrastructure projects, developed by both the public and private sectors, aim to develop the country’s shipping and other transport capabilities, as well as its potential for tourism. These projects enhance the country’s viability as a trading platform and access point for tourism business in Central America and the Caribbean.
In addition, the country is only a 2-hour flight from Miami and 4 hours from New York. With eight international airports in the country, the Dominican Republic is accessible to American companies and business travellers.
Do business in the Dominican Republic with local legal experts
The Dominican Republic offers exciting opportunities for entrepreneurs and investors looking to do business in the Caribbean and Central America. Although the country is still largely untapped by foreign investors, now is the perfect time to establish yourself in a growing market.
At Biz Latin Hub, we provide expert corporate legal and accounting advice to foreign companies operating in Central and South America and the South Pacific. Our multilingual team of local and expatriate professionals provides in-depth guidance and comprehensive business solutions for all market entry and back office needs. This includes company formation, corporate compliance, due diligence, recruitment and PEO services as well as visa processing.
Contact us today here to find out how we can be your single point of contact for doing business in the Dominican Republic.