For anyone looking to enter the Dominican Republic on a short-term or limited-scale basis, or who simply wants to get to know the market better before making a deeper commitment, hiring staff via an employer of record (EOR) is a good option. Because an EOR in the Dominican Republic will act as the official employer of those staff, while you will have full control over their workloads and schedules, meaning you can have team members in only the time it takes to find them, allowing you to enter and exit the market rapidly.
As such you can avoid the need to register a subsidiary in the Dominican Republic, or any other type of legal entity. Note that an EOR can also be known as a professional employer organization (PEO), and a PEO firm may advertise its services as “payroll outsourcing.”
The Dominican Republic is the eighth-largest economy in Latin America by gross domestic product (GDP), as well as the largest in the Caribbean. It has experienced significant growth over recent decades, only registering a decline in GDP during one year since 1985, with GDP hitting $88.9 billion in 2019 (all figures in USD).
The rise in GDP has been met with a corresponding increase in overall prosperity, as measured by gross national income (GNI), which hit $8,080 per capita in 2019 — a figure that places it as an upper-middle income nation by international standards.
The Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) provides businesses based in the Caribbean nation with preferential access to markets in the United States and most countries in Central America. The Dominican Republic is also a member of the Caribbean Community (Caricom), providing access to 14 other economies in the Caribbean, as well as to the European Union via a free trade agreement (FTA).
Key economic sectors to the Dominican republic include hospitality, tourism, and import/export, while the textile and pharmaceutical industries draw approximately 40% of foreign direct investment (FDI) into the country’s free trade zones (FTZs), which recent legislation allows foreigners to invest in. In 2019, the country’s total net inflows of FDI stood at more than $2.85 billion.
Among the country’s key exports are gold, medical equipment, tobacco, and bananas, with Canada, China, India, and the United States major recipients of Dominican goods.
If you are interested in doing business in this prosperous and growing market, read on to understand what an EOR in the Dominican Republic will be able to do for you. Or go ahead and contact us now to discuss your business alternatives.
What will an EOR in the Dominican Republic do for you?
When you choose to hire through an EOR in the Dominican Republic, you tap into a well-established recruitment network that the EOR services provider has developed in the local market. Beyond having a presence in the local job market, the provider will also have a sound knowledge of the best local educational institutions and courses, allowing them to help you with effectively vetting candidates.
While the EOR will charge you a fee for each of the workers it employs on your behalf, that cost will generally be significantly less than the cost of going through company formation, hiring staff to manage the payroll of those staff, and then liquidating the company. That is why it is such an attractive proposition to investors with a limited-scale venture.
Another major draw is the fact that, as part of the service agreement you sign, an EOR will guarantee compliance with local norms and regulations, meaning that you can rest assured that your company will remain in good standing with local authorities and avoid any kind of legal inconvenience. That will mean all salaries and benefits, including sick pay, vacations, and other statutory benefits will be fulfilled.
The EOR will also be able to provide you with ongoing advice on legislative and regulatory changes, which could prove critical to shaping your market strategy. While, in the event that you are planning on deepening your commitment to the market via entity registration, in many cases, an EOR services providers are able to also help with company formation.
Legal requirements your EOR will oversee
As part of the compliance guarantee that an EOR in the Dominican Republic will offer you, the firm will fulfill a range of legal requirements. Those include:
- Enforcing statutory limits on working hours — which stand at 44 hours per week and 8 hours per day for full-time workers, and 29 hours per week for part-time employees
- Adhering to provisions regarding additional pay for, and special statutory leave, such as maternity or compassionate leave
- Honoring all national holidays, of which there are 12 annually
- Guarantee that any employee will receive at least the national minimum wage — which stood at $188 in 2021
- Complying with nationality quotas — with Dominican firms obliged to have at least 80% local staff
- Paying any contractually agreed bonuses in a timely manner
Biz Latin Hub can provide hiring & PEO services in the Dominican Republic
At Biz Latin Hub, our multilingual team of hiring and PEO specialists is ready to help you find and hire the staff you need. With our complete portfolio of back-office support, including high-quality corporate legal and accounting services, we can be your single point of contact to support your market entry and ongoing operations in the Dominican Republic, or any of the other 15 countries around Latin America and the Caribbean where we operate.
Reach out to us now for further advice and a free quote.
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