How to Form a Branch in the Dominican Republic

An analysis of market entry strategies in the Dominican Republic reveals a wide range of options for companies wishing to expand. Among them, the creation of a branch office emerges as a strategic option for many companies. By choosing to establish a branch in the Dominican Republic, significant control over the entity is maintained, allowing it to effectively leverage existing brand recognition while taking advantage of the burgeoning opportunities in this rapidly expanding market, recognized as the largest economy in the Caribbean.

A branch differs from a subsidiary in that it is not established as a separate legal entity from its parent company and is considered to be an extension of the business headquartered elsewhere. Hence, when choosing to register a branch in the Dominican Republic, you will be able to manage and supervise all administrative activities, while, at the same time, having more control over key decisions and being able to re-calibrate business practices if needed.

It is also worth keeping in mind that the process to form a branch in the Dominican Republic is generally significantly faster than establishing other entities in the country, meaning that your market entry can be completed quickly. 

Regardless of the entity type you set up, you are going to need a good corporate lawyer in the Dominican Republic to assist you in the process, so if you have any doubts about whether a branch, subsidiary, or brand new company suits you best, your chosen attorney will be able to give you good advice.

Read on to understand some of the main advantages of forming a branch in the Dominican Republic and the key steps involved in the process, as well as to get some insight into what makes the Dominican economy so attractive for investment.

6 Steps to form a branch in the Dominican Republic

When you form a branch in the Dominican Republic, you will need to go through the following six key steps:

• Step 1 – Check the availability of your entity name.
• Step 2 – Establish the constitution and bylaws for your branch in the Dominican Republic.
• Step 3 – Fulfill shareholders’ declarations.
• Step 4 – Pay duties, stamps, and taxes.
• Step 5 – Register your branch in the Dominican Republic with local authorities.
• Step 6 – Open a corporate bank account to form a branch in the Dominican Republic.

Step 1. Check the availability of your entity name

Before you form a branch in the Dominican Republic, you will need to check that the name you intend to give the entity is available.

Given that one of the biggest benefits when you form a branch is the opportunity to carry your brand recognition into the new market, you will want to make sure that there are no companies already operating with a similar name.

Your chosen lawyer will be able to undertake a verification process through the database of the Dominican Trademark Office (ONAPI).

Step 2. Establish the constitution and bylaws for your branch in the Dominican Republic

While your constitution and bylaws will likely be similar to those used by the parent company elsewhere, you will need your lawyer in the Dominican Republic to go over them to make sure they fit in with local regulations. 

This will establish the legal framework for how your branch is organized, and clarify the likes of funding sources and in order to remain in compliance with those norms, you may need to make some modifications to those that govern your parent organization.

Step 3. Fulfill shareholders’ declarations

All shareholders hold an official Shareholder’s Assembly and declare that they have:

• Been formally appointed in a Meeting of Partners
• Agreed to form a company
• Approved the bylaws
• Signed the deed of incorporation

Once all of these steps are complete, the branch may be registered before the Commercial Registry.

Step 4. Pay duties, stamps, and taxes

Before you can complete the process to form a branch in the Dominican Republic, you are obliged to pay the fees, taxes and stamps established by law for the creation of a new company.

The Commercial Registry will review the fulfillment of these obligations as part of the process of confirming your branch registration.

Step 5. Register your branch in the Dominican Republic with local authorities

Before you can start doing business, you must register your newly formed branch with the National Taxpayers Registry (RNC). This is a crucial step that must be undertaken in order for you to open a corporate bank account and be able to begin trading.

Step 6. Open a corporate bank account to form a branch in the Dominican Republic

The final step to form a branch in the Dominican Republic is to open a corporate bank account. Note that the turnaround time for this process can depend on the bank you choose, which may be influenced by your business focus or location. 

Your chosen lawyer in the Dominican Republic will be able to advise you on which providers may best suit your needs when it comes to opening a corporate bank account.

Investing in the Dominican Republic

While the Dominican Republic is perhaps best known as a tourist destination, with an abundance of commercial opportunities available in the tourism sector, the country offers a wide array of possibilities for foreign investors.

The country has witnessed rapid economic growth over recent years, with GDP increasing fourfold between 2004 and 2019, to hit $88.9 billion — making the Dominican Republic the largest economy in the Caribbean and the eighth-largest in Latin America and the Caribbean. That growth has been met with a corresponding rise in prosperity, with gross national income (GNI) tripling during that same period, to reach $8,080 per capita — a figure that places the country as an upper-middle income nation by international standards.

While tourism is crucial to the Dominican economy and forms a large part of the more than 60% of GDP that the service sector contributes to the economy, the country also boasts a large agricultural sector, contributing more than 5% of GDP, as well as a well-established industrial base, contributing almost 27% of GDP.

Among the country’s major export products are tobacco, fruits and nuts, electrical machinery, medical equipment, and garments. While the Dominican Republic also has significant gold deposits, with the precious mineral another key product for the international market.

For foreign investors looking to form a branch in the Dominican Republic or any other type of entity, the country is made all the more attractive by the fact it has a network of dozens of free trade zones, offering attractive tax incentives for investment. Moreover, via its participation in the Caribbean Community and the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), locally based business enjoy preferential access to numerous local markets, as well as the massive US market.

Common FAQs when forming a company in the Dominican Republic

In our experience, these are the common questions and doubtful points of our Clients.

Form a branch in the Dominican Republic with the help of Biz Latin Hub

At Biz Latin Hub, our team of multilingual company formation experts is equipped to help you get established in the Dominican market. With our complete portfolio of corporate support and back-office solutions, including legal, accounting, and recruitment services, we can be your single point of contact for entering and operating in the Dominican Republic or any of the other 17 jurisdictions around Latin America and the Caribbean where we are present.

Contact us now to get assistance or a free quote.

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