Corporate Law at Dominican Republic
Certainly! Here’s a concise overview of Corporate Law in the Dominican Republic:
Corporate Law in the Dominican Republic
The Dominican Republic’s corporate law is mainly governed by the Commercial Code and other specific statutes, providing a modern framework for business incorporation, governance, and operations.
1. Legal Framework
The primary legislation governing companies is the Commercial Code of the Dominican Republic (Código de Comercio).
Supplemented by laws such as the Law on Commercial Companies and Individual Limited Liability Companies (Law No. 479-08).
The General Directorate of Internal Taxes (DGII) regulates taxation of companies.
Companies are subject to oversight by the Superintendence of Securities (Superintendencia del Mercado de Valores) when involved in public offerings.
2. Types of Companies
Common corporate structures include:
Sociedad Anónima (S.A.) — Joint-stock company or corporation
Most common for medium to large businesses.
Requires a minimum of two shareholders.
Share capital divided into shares.
Sociedad de Responsabilidad Limitada (SRL) — Limited Liability Company
For small to medium enterprises.
Minimum 2 and maximum 50 partners.
Capital divided into quotas, not shares.
Sociedad en Nombre Colectivo — General partnership
Sociedad en Comandita Simple — Limited partnership
Sociedad en Comandita por Acciones — Partnership limited by shares
Empresa Individual de Responsabilidad Limitada (EIRL) — Sole proprietorship with limited liability
3. Key Features
Minimum Capital: No strict minimum, but practical minimums depend on company type and industry.
Limited Liability: Shareholders’ or partners’ liability limited to their contributions.
Corporate Governance:
S.A.: Managed by a board of directors and general shareholders’ meetings.
SRL: Managed by one or more managers.
Share/Quota Transfer:
S.A. shares are freely transferable unless otherwise stated.
SRL quotas are transferable only with the consent of other partners.
Annual General Meeting: Required to approve accounts and corporate decisions.
Accounting: Companies must keep proper accounting records in line with local GAAP or IFRS.
4. Company Formation
Registration through the Mercantile Registry (Registro Mercantil) under the National Office of Industrial Property (ONAPI).
Must draft and notarize the company’s bylaws (estatutos sociales).
Obtain a Tax Identification Number (RNC) from the DGII.
Register for social security and labor obligations if applicable.
5. Taxation and Compliance
Corporate Income Tax: Generally 27% on net profits.
Value Added Tax (ITBIS): 18% on most goods and services.
Annual financial statements must be filed.
Compliance with labor laws and social security regulations is mandatory.
6. Dispute Resolution
Commercial disputes are resolved by specialized commercial courts.
Arbitration and alternative dispute resolution mechanisms are recognized and encouraged.
The Dominican Republic is a signatory to international arbitration conventions such as the New York Convention.
Summary
The Dominican Republic offers a clear and practical corporate legal framework suitable for local and foreign investors. It supports a variety of company structures adaptable to different business sizes and needs, with established processes for incorporation, governance, and tax compliance.
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