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How Establish and Operate with a Foreign Company

Foreign companies can provide services in the territory of the Dominican Republic, as long as they comply with national regulations. Among the main requirements is the registration of the foreign company with the Mercantile Registry.

The 3-02 Act on Commercial Registration establishes as a mandatory requirement the obtaining of a Mercantile Registry for any company that habitually engages in commercial activity in the national territory, this includes foreign companies. In addition, the text imposes sanctions on commercial companies that professionally engage in business without being registered in the Mercantile Registry.

The conditions for a foreign company to provide services in the Dominican Republic are summarized in the fulfillment of the following requirements:

a) .- Commercial Registry. The commercial registry constitutes a public database of all the companies and entities that carry out commercial activities in a certain territorial demarcation, this registry is issued by the Chamber of Commerce an of the city where the main offices of the foreign company are located .

The requirements for commercial registration are as follows:

  • The constitutive documents of your country of origin, duly legalized by Apostille.
  • Updated list of shareholders duly legalized by Apostille.
  • Assembly of the commercial entity approving business operations in the Dominican Republic, registration of the company and the establishment of domicile in the Dominican Republic.
  • Copy of the passports of the members of the board of directors.
  • Address in the Dominican Republic, where the foreign company will be located.

The estimated time is 10 working days.

b.-) National Taxpayer Registry (RNC). It forms the database of all companies and entities subject to the payment of taxes in the Dominican Republic. The indicated registration is granted by the General Directorate of Internal Revenues (DGII) – Tax Department. Through this registration companies are authorized to issue invoices with validity in national territory.

To obtain the RNC it is necessary to have previously obtained the Mercantile Registry. The applicant must submit a copy of the documents of incorporation, as well as copies of the passports of the members of the Board of Directors. The estimated time of obtaining is 10 working days.

c.-) Establishment of Domicile in National Territory. It constitutes a special authorization issued by the Executive Branch, through which the foreign company is licensed to establish itself in the Dominican Republic. The requirements are as follows:

  • The constitutive documents of your country of origin, duly legalized by Apostille.
  • Updated list of shareholders duly legalized by Apostille.
  • Assembly of the commercial entity approving business operations in the Dominican Republic, registration of the company and the establishment of domicile in the Dominican Republic.
  • Copy of the passport of the members of the Board of Directors.
  • Power granted to the person who will make the corresponding procedures before the Ministry of Interior.
  • The address in the Dominican Republic where the foreign company will be located.

Once the foreign company has been authorized to operate in the national territory, it must comply with the general regulations applicable to all commercial companies, among which, the following should be noted:

Labor.

The third book, title I, of the Labor Code, regulates the nationality of work. In this sense, article 135 establishes that eighty percent (80%), at least of the total number of workers of a company must be Dominicans. Foreigners who exercise exclusively the functions of management or administration of an enterprise are exempt from this provision; as well as technical workers, provided that, in the opinion of the Department of Labor, there are no unemployed Dominicans capable of replacing it.

In the case of foreign consulting companies, it is recommended to request permission from the Ministry of Labor to be exonerated from compliance with the quota of national workers set forth in article 135 of the Labor Code.

Labor regulations require companies to register in the Integrated Labor Registry System (SIRL).

Migratory.

The Dominican migratory regulations establish that all the foreigners that carry out activities of business or work must be provided with the corresponding visa. In this sense the foreign technical staff must be provided with a business visa for work purposes.

The reference visa usually has a validity of one year and allows a stay of 3 to 6 months. In case of personnel with permanence or prolonged stay a special residence permit must be obtained.

In light of the regulations in force in the Dominican Republic, it is possible for a foreign advisory and consultancy company to provide services from abroad to Dominican clients without registering in the Dominican Republic, but when the consulting or advisory service is provided in the Dominican Republic, the Company must register in the country.

 

Rodolfo Mesa Chavez

Twitter: @rodolfomesa

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