There are three forms of company we incorporate in the Dominican Republic, Simplified Corporation (SAS), Limited Liability Company (SRL) and Individual-Owned Limited Liability Company (EIRL).
An SRL is a limited liability company – Sociedades de Responsabilidad Limitada – with a minimum of two shareholders, any of which can be another limited company. An EIRL is a sole trader limited company – Empresa Individual de Responsabilidad Limitada – which is intended for one person.
We will firstly draw up a list of shareholders. If shareholders are unable to go to a meeting to form the company; we draw up Powers of Attorney in favour of our notary there. These documents are legalised for use in the Dominican Republic and sent to the notary. Prior to the meeting, the notary asks for a name clearance certificate from the National Office of Industrial Property.
There is then a meeting of shareholders together with our notary:
The company is incorporated once the notary sends to the Mercantile Register a copy of:
Share Capital needs to be RD$100,000 (€1950) for an SRL. If the company is a single person company (EIRL), there is no minimum share capital.
When the company name is approved a certification of approval of the name is issued by the National Industrial Property Office within 10 days. When registering the company name, it is necessary to file a formal name application to the State Secretarial for Industry and Commerce. After this publication the company name must be published in a national circulation newspaper.
The incorporation of the company is done with a notary. They will normally act with Powers of Attorney on behalf of shareholders outside the Dominican Republic.
All corporate documents must be registered in the Chamber of Commerce in order to obtain a Mercantile Registration Certificate.
Company Law (Ley de Sociedades) #479-08, governs company formation in the Dominican Republic.
The board may consist of one single director.
Best for small to medium-sized businesses and large, family-owned businesses.
Minimum of two shareholders, maximum of 50;; minimum capital investment of 100,000 Dominican pesos (US$2,700) paid in full. Management is by one or more individuals or a board of individuals as established in the by-laws.
Shares: No stock is issued. Transfer of shares is essentially restricted, and requires 50 to 75% of the votes of the shareholders for approval. Restricting transfer of shares to heirs or spouse of a shareholder is possible.
Maximum of one stockholder who must be the owner and an individual, not a company; no minimum capital investment is required.
A member need not be a Dominican citizen or resident to form a Dominican company. As a member, you will be required to provide your full name, nationality, occupation, marital status and address, and where applicable, a copy of your passport, “cédula” (Dominican identification), and/or driver’s license.
1. Register the company name
If time is important and the company name is not immediately critical, you have some options. Many law firms retain shelf companies that are ready to go and available for purchase at a premium price. However, if cost is a factor, you can still expedite the registration process by selecting a “numbered” company (e.g., 12345 S.R.L.), and opting to change the name later. This two-step process will incur extra costs, but will expedite the registration process with the advantage that you will establish a legally recognized company more quickly.
2. Prepare and sign company documents
The documents required will depend on the particular structure selected, but will include at a minimum the articles of incorporation and by-laws (“estatutos”).
3. Pay the organization tax
Dominican company organisation taxes amounts to 1% of the authorised capital for S.A. and S.A.S. structures, and paid-in capital for S.R.L. and E.I.R.L. structures.
4. Record the company documents with the Business Registry (Registro Mercantil)
The moment company documents are recorded at the Business Registry, the company is deemed to legally exist, affording the company access to all benefits granted under the law. Recordation fees are calculated on the basis of the company’s authorised capital for S.A. and S.A.S. structures, and paid-in capital for S.R.L. and E.I.R.L. structures.
5. Register the company with the Bureau of Internal Taxes (“Dirección General de Impuestos Internos”, abbreviated as DGII)
The newly formed company and each individual member, whether foreign or domestic, must obtain a tax number by registering with the DGII. The company tax number (“número de registro nacional de contribuyentes”) permits the company to open a bank account, acquire real estate, and operate generally within the country.