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.
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.
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The 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 impacting the Dominican economy in 2020, the country had experienced remarkable and nearly uninterrupted growth since the 1990s. Between 2004 and 2022, the GDP of the Dominican Republic saw a four-fold increase, reaching $101.65 billion in 2022 (all figures in USD). Over the same 18-year period, gross national income (GNI), a crucial indicator of overall prosperity, exhibited dynamic changes.
In 2022, the GNI surged to $101.65 billion, reflecting a notable 12.95% increase from the previous year. The GNI for 2021 was $90.00 billion, marking a substantial 14.18% growth from 2020. This economic trajectory underscores the resilience and adaptability of the Dominican Republic’s economy, despite facing challenges such as the global pandemic.
Presently, the nation upholds a harmonious blend of diverse industries and sectors, encompassing agriculture, manufacturing, and services. Notably, it proudly holds the sixth-highest per capita GDP in Latin America, a standing that becomes even more impressive when considering purchasing power. This positions the Dominican Republic ahead of formidable regional counterparts such as Brazil and Mexico. The country’s economic landscape reflects a strategic and resilient approach, ensuring a robust and competitive position in the Latin American market.
With a substantial influx of 782,000 visitors in August, the Dominican Republic is poised to surpass a monumental milestone, welcoming over 10 million tourists by the end of the current year. This remarkable achievement signifies a remarkable 33% increase compared to the tourist numbers recorded in 2019. As of September 25, 2023, the Dominican Republic is a vibrant and sought-after destination, showcasing an impressive growth trajectory in its tourism sector.
The Dominican Republic’s investment environment is boosted by 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 center industries in recent years.
However, taking advantage of the opportunities on offer in the country means adhering to financial regulatory compliance in the Dominican Republic.
Entity 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 the 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 important 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.
Common FAQs for Entity Legal Compliance in the Dominican Republic
Based on our extensive experience these are the common questions and doubts of our clients when looking to operate within the country
The following are the most common statutory appointments for Dominican legal entities:
– An appointed Legal Representative who will be personally liable, both legally and financially for the good operation and standing of the company. This should be a local national or a foreigner with the right to live/work in the country.
Yes, a Registered Office Address or Fiscal Address is required for all entities in the Dominican Republic for the receipt of legal correspondence and Governmental visits.
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.
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The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
