Foreign executives often choose the Dominican Republic as a gateway into the Caribbean, as the country has a steady, growing, and reliable economy. The Dominican Republic offers multiple benefits that ease corporate taxes and facilitate immigration processes for foreign companies and investors. Likewise, local authorities allow the internalization of capital as a way to attract foreign investment.
Nevertheless, as commercial projects may not turn out as expected or more promising opportunities may occur, every solid market entry strategy must consider the possibility of a market exit. The most common way to withdraw investment in the Dominican Republic is by liquidating a company.
Learn how to liquidate a company in the Dominican Republic.
Procedures to loquidate a company before the chamber of commerce
The country’s Chamber of Commerce is the first entity you must approach when looking to liquidate a company in the Dominican Republic. This is to ensure that the Company’s registration is active and valid. In case it is inactive, the company must renew it or obtain a notarized statement indicating the register is lost.
The registration at the Chamber of Commerce includes the company’s by-laws which have a liquidation clause, and the minutes of general meetings, which need to refer to the pertinent approval to dissolve the company.
Furthermore, the company must appoint a liquidator to draft a ‘liquidation report’. Note that this report must be approved by a member of the company. Then, a formal Declaration of Solvency must be drafted, followed by the approval of the ‘liquidation report’.
Requirements established by the Department of Internal Revenue (DGII)
To Liquidate a Company in the Dominican Republic, the affidavits listed below must be filed and presented before the Department of the Internal Revenue.
- RC-02: Affidavit to register and update company data.
- Adjacent the RC-02: To liquidate a company you must use this form to file copies of the documents submitted by the Chamber of Commerce.
- Affidavit of liability: This affidavit prevents the company from having to be held responsible for possible claims, which must be resolved by the legal representative. Depending on the type of legal person, the liquidator, the manager, the president or even the company’s secretary can sign this affidavit.
- Proof of updated payments: You must prove that you updated all tax payments and comply with tax regulations.
In short, to successfully liquidate a company in the Dominican Republic, you need to complete the following key steps:
- You must understand and comply with corporate governance procedures.
- Register legal corporate paperwork before the Chamber of Commerce.
- File pertinent affidavits and documents.
Liquidate your company in The Dominican Republic with support from local legal experts
Although the Dominican Republic is a favourable business destination, foreign executives operating in the country might decide to undertake a liquidation process based on different circumstances. The liquidation process in the Dominican Republic can be complex, and requires a sound understanding of local regulations. Therefore, it is vital to seek expert advice lo liquidate a company in the Dominican Republic.
At Biz Latin Hub, our experienced team of local and expatriate legal and accounting advisors are able to guide you through a liquidation process while complying with all the local legislation. With our full suite of bilingual market entry and back-office services, we can ensure you meet all the necessary requirements and make the best decisions to liquidate your company in the Dominican Republic. Contact us now to find out how we can help you with your business.
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