- We are looking to set up a [DOMINICAN REPUBLIC] trading company. What structures/business vehicles do you use?
Limited Liability Company, Company, Limited Partnership, Limited Liability Partnership.
- Which structure/business vehicle is the most common one for foreign companies to adopt and what are the liability and reporting provisions for it?
Limited Liability Company. The liability of the members is limited to what they have invested. After start operations it should report to tax authority monthly.
- What are the rules on capitalisation of entities in the [DOMINICAN REPUBLIC]?
The partners have a preference right to invest in a same proportion of his current investment.
- What information are we required to provide businesses/consumers with when trading with us?
All relevant information of the products/ services. All business should be conducted in good faith.
- We would prefer to avoid having an actual physical presence in the [DOMINICAN REPUBLIC] and instead are looking to appoint an agent or distributor to sell our products and/or services. What are the legal implications?
Under determinate circumstances the local agent/ distributor should be compensated in case of unilateral agreement termination.
- We intend to sell goods via our online website. What are the legal requirements if we wish to sell into the [DOMINICAN REPUBLIC]?
No especial rule for sale online.
- Do you have legislation in respect of the use of electronic signatures?
The law 126-02.
- We intend to import goods into the [DOMINICAN REPUBLIC] for sale. What are the legal requirements for doing this?
You will need an import permit and pay the customs tax. Packaging rules instruct to translate labels into Spanish language
- What rights do consumers have when selling to them? Dominican Republic has an especial law that protect the rights of the consumers.
Main rights are: Protection of the heath, education for the use of the product, accurate information of the products/services, protection of economic interest, compensation for damages, among other collective rights.
- What are a customers rights in so far as returning goods (whether or not they are faulty)?
The customers have returning rights only of faulty goods.
- We are looking to set-up a business in the [DOMINICAN REPUBLIC] and intend to bring some of our current employees into the [DOMINICAN REPUBLIC] to work. Do we require work/residency permits?
Yes. Also there is a limit of 20% of foreign employees.
- What formalities do we need to comply with when recruiting employees in the [DOMINICAN REPUBLIC]?
All employees must be major of 18 and be registered at the Labour Department and Social Security Department.
- What are the minimum rights we have to adhere to for employees in the [DOMINICAN REPUBLIC]?
Pay the minimum salary and accomplish with the health and security regulations.
- Is there a difference if someone is contracted as a consultant as opposed to being an employee?
Consultants are considered freelancers and are not protected by the labour code.
- What options exist if we want to terminate employees contracts with us? Can we make them redundant?
The contract can be cancel for a breach of the employee. It is possible to make it redundant, in that case the employer must compensate the employee through monetary payment based on salary and the date of the contract.
TAX AND INVESTMENT QUESTIONS
- Are there any restrictions on foreign investment in to the [DOMINICAN REPUBLIC]?
- Do you have any currency or exchange controls in place?
- How are employees taxed in the [DOMINICAN REPUBLIC]?
The employer retain from the employee’s salary the tax applicable and then pay it to the tax authority.
- What are the current rates of tax for employees?
Between 15% – 25% of their taxable incomes.
- What taxes apply to the business models you have identified above?
27% of the taxable income.
- How are dividends to foreign companies/shareholders taxed?
The company that pay dividends to companies/shareholder should retain an pay to tax authority a 10%.
- Are there transfer pricing rules in place?
Articles 281 and 282 of the Tax Code set up the rules.
- Do you have double taxation treaties in place with foreign jurisdictions. If so where can we find out details?
The information is available at website of the tax authority – www.dgii.gov.do/legislacion/acuerdos/Paginas/acuerdos.aspx