Financial Regulatory Compliance in the Dominican Republic

A map of the Dominican Republic to accompany an article on financial regulatory compliance
A map of the Dominican Republic

If you are planning to launch in the Dominican market, or already doing business there, you will need to take into account financial regulatory compliance in the Dominican Republic.

Because if you don’t adhere to financial regulations, you may face legal issues or financial penalties that could adversely affect your business, as well as diminishing your company’s standing in the eyes of local authorities.

Financial regulatory compliance is part of general corporate compliance, and often falls within the provision of corporate secretarial services provided by third parties.

For anyone interested in doing business in the Dominican Republic, this guide will provide a good overview of what your local corporate lawyer will be engaged in on your behalf.

If you are interested in knowing more about how we can assist you doing business in the Caribbean’s largest economy, contact us today.

Dominican Republic offers an investment-friendly environment

The Dominican Republic is known as a popular destination for foreign investors looking to enter Latin America and the Caribbean, and the country is the eighth-largest economy in the region by gross domestic product (GDP), despite its small size compared to many competitors.

That status has come on the back of decades of notable growth, especially after the country began to implement a slew of measures in the 1990s to open up the economy and encourage foreign direct investment (FDI). That has also seen financial regulatory compliance in the Dominican Republic become more stringent.

Prior to the COVID-19 pandemic denting the Dominican economy in 2020, the country had registered exponential and almost continuous growth since the 1990s, with GDP growing four-fold between 2004 and 2019 to reach $88.94 billion (all figures in USD). 

That same 15-year period saw a tripling of gross national income (GNI) — a key indicator of general prosperity — which hit $8,100 in 2019, placing the Dominican Republic as an upper-middle income nation by international standards.

While the global pandemic has adversely affected the Dominican economy — as it has most economies around the globe — the country has already begun registering strong signs of recovery. 

In early-September the UN’s Economic Commission for Latin America and the Caribbean (ECLAC) upgraded its growth prediction for the country, estimating that GDP would grow 8% in 2021 — the fifth-highest rate in the region.

Meanwhile, the arrival of 476,575 tourists in August reportedly represented the recuperation of tourist numbers to 96% of their pre-pandemic level.

Other signs of recovery include the recent announcement that the manufacturing sector had expanded 14.3% in the first half of 2021, the news that agro-exports to the United States had increased 37% in a similar period, and an 80% jump in the value of gold exports.

The investment environment in the Dominican Republic is boosted by the presence of more than 75 free-trade zones (FTZs) that offer significant tax incentives and host companies from a wide range of sectors — with major growth seen in the tech and call centre industries in recent years.

But taking advantage of the opportunities on offer in the country means adhering to financial regulatory compliance in the Dominican Republic.

A snapshot of the market in the Dominican Republic to accompany an article on financial regulatory compliance
A snapshot of the market in the Dominican Republic

Financial regulatory compliance in the Dominican Republic: key responsibilities

Although financial regulatory compliance in the Dominican Republic can depend on the type of company you run, certain aspects of corporate compliance are generally applicable.

Company tax registration
If you start a business or form a branch in the Dominican Republic, you must register with the local tax authority and obtain a tax ID number.

Upkeep of company books
All companies are obliged to maintain their company books as part of financial regulatory compliance in the Dominican Republic — something that a provider of corporate secretarial services will do on your behalf.

Provision of registered address
Having a registered address is a minimum statutory requirement for all legal entities in the Dominican Republic. This will be the registered address of the company, and as such, will be used for all official communication and correspondence.

Holding an annual general meeting (AGM) of shareholders 
In keeping with the General Law of Companies and Limited Liability Individual Enterprises, every company or corporation registered in the Commercial Registry of the Chamber of Commerce and Production must hold at least one AGM between shareholders and managing executives. Such a meeting must be held within 90 days of the end of the fiscal year, which runs from 1 January to 31 December, meaning an AGM must be held no later than 31 March the following year.

Renewal of the Commercial Registry
The Commercial Registry of the Chamber of Commerce and Production charges a bi-annual registry fee, due on the date of original registry. The payment of this fee is mandatory and it is conditional for the filing and registry of any commercial act or document, and is therefore an iimportant aspect of financial regulatory compliance in the Dominican Republic.

Filing of annual corporate income tax return (IR-2 Form)
The corporate income tax return (Form IR-2) must be filed and paid within 120 days of the end of the fiscal year, meaning that corporate income tax must be filed and paid by 30 April following the close of a given fiscal year.

Biz Latin Hub can assist with financial regulatory compliance in the Dominican Republic

At Biz Latin Hub, our locally-based team of bilingual corporate legal and accounting experts is able to assist you with financial regulatory compliance in the Dominican Republic, as part of our portfolio of back-office services. We provide company formation, accounting & taxation, legal services, hiring & PEO, and visa processing, meaning that we can offer an individualized package of integrated back-office services in the Dominican Republic, or any of the other 17 markets around Latin America and the Caribbean where we offer our services.

Contact us now for a free consultation or quote.

Or read about our team and expert authors

Key services offered by BLH including legal services, accounting & taxation, hiring & PEO, due diligence, tax advisory, and visa processing
Key services offered by Biz Latin Hub

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