Key Aspects Of 2008
Starting a Business: The Dominican Republic reduced the time required to start a business by simplifying name registration and introducing online tax registration.
Registering Property: The Dominican Republic made registering property easier by adopting several laws aimed at streamlining the process.
Paying Taxes: The Dominican Republic made paying taxes costlier for companies by increasing employers’ social security contribution rate.
Trading across Borders: The Dominican Republic made trading across borders easier by reducing the documentation requirements.
Key Aspects Of 2009
Starting a Business: The Dominican Republic made starting a business easier and less costly by establishing an online facility for completing registration formalities and reducing the incorporation taxes.
Registering Property: The Dominican Republic made registering property less costly by reducing and simplifying the taxes collected in property transactions.
Paying Taxes: The Dominican Republic made paying taxes less costly as well as easier for companies by reducing the corporate income tax rate; abolishing several taxes, including the stamp duty; and fully implementing online filing and payment, now used by most taxpayers.
Trading across Borders: The Dominican Republic reduced the time for exporting and importing through improvements in the online portal for customs documents, in risk-based inspections and in the banking sector.
Key Aspects Of 2010
Protecting Minority Investors: The Dominican Republic strengthened investor protections through a new company law requiring greater corporate disclosure, director liability and shareholder access to information.
Key Aspects Of 2011
Starting a Business: The Dominican Republic made it more difficult to start a business by setting a minimum capital requirement of 100,000 Dominican pesos ($2,855) for its new type of company, sociedad de responsabilidad limitada (limited liability company).
Key Aspects Of 2012
Starting a Business: The Dominican Republic made starting a business easier by eliminating the requirement for a proof of deposit of capital when establishing a new company.
Key Aspects Of 2013
Paying Taxes: The Dominican Republic increased the corporate income tax rate.
Key Aspects Of 2015
Dealing with Construction Permits: The Dominican Republic made dealing with construction permits costlier by increasing the building permit fees.
Getting Credit: The Dominican Republic improved its credit information system by enacting a new law regulating the protection of personal data and the operation of credit reporting institutions.
Protecting Minority Investors: The Dominican Republic strengthened minority investor protections by introducing greater shareholder rights and requirements for greater corporate transparency.
Trading across Borders: The Dominican Republic made trading across borders easier by reducing the number of documents required for exports and imports.
Key Aspects Of 2017
Getting Electricity: The Dominican Republic made getting an electricity connection faster by reducing the time required to approve electrical connection plans.
Paying Taxes: The Dominican Republic made paying taxes less costly by decreasing the corporate income tax rate.
Anti-Money Laundering Law (Law 155-17): Reformed in 2017, the New Law aims to regulate money laundering activities according to the latest international guidelines, complying with international standards for transparency.
Key Aspects Of 2018
Starting a Business: The Dominican Republic reduced the time needed to register a company by streamlining processes at the chamber of commerce.
Getting Electricity: The Dominican Republic improved the reliability of electricity by investing in grid expansion, redesigning network zoning and setting up a power restoration squad to respond to outages.
Paying Taxes: The Dominican Republic made paying taxes costlier by decreasing the inflation rate.
Resolving Insolvency: The Dominican Republic made resolving insolvency easier by adopting a law that introduces a reorganization procedure and facilitates continuation of the debtor’s business during insolvency proceedings. The new law allows creditors greater participation in important decisions during insolvency proceedings.
Labor Market Regulation: The Dominican Republic increased the mandatory length of paid maternity leave.
Enacted in July of 1997 in accordance with Law 166-97, The Directorate General of Internal Taxes (DGII) is the institution responsible for the administration and collection of internal taxes and fees in the Dominican Republic.
ITBIS is a general tax placed on consumption type values such as industrialized goods, as well as services, Individuals, businesses, and legal entities, national or foreign, that carry out transfers, imports or provisions of taxed services are responsible for this tax. As of 2016, the rate of ITBIS applied to taxed goods and services is 18%.
Income Tax taxes all income, profit, or benefit obtained by individuals, companies, and undivided estates in a given fiscal period. All people residing in the Dominican Republic must pay this tax on income from a Dominican source and from sources outside of the Dominican Republic from investments and financial gain.
Retention agents are public and commercial entities that must deduct the amount of the corresponding tax from the amount to be paid to a person. This must be delivered to the tax administration within each establish term.
The rate of Income Tax to be paid by legal entities is 27%. Non legal entities must pay the tax rate aligning with salary.
Annual Rate Scale:
- Income up to RD $416,220.00: Exempt
- Income up to RD $624,329.00: 15% of the surplus of RD $416,220.01
- Income up to RD $867,123.00: pays RD $31,216.00 plus 20% of the surplus of RD$624,329.01
- Revenue above RD $867,123.01: pays RD$ 79,776.00 plus 25% of the surplus of RD$867,123.01
Excise Tax taxes the transfers of specific goods of national production, such as tobacco and alcohol, at the manufacturing level as well as their importation, telecommunication and insurance services.
PROPERTY TAX (IPI)
Property tax is an annual tax applied to the total sum of taxed real estate registered by individuals and by Trusts. This tax reaches all homes, and commercial, industrial, and professional properties. However, there are exemptions to this tax.
If an individual is over the age of 65 and only owns one property, they are exempt from IPI. Properties located on rural land and/or properties of agricultural use located on rural land are exempt from paying IPI. Properties with a total value that is equal to or less than RD$7,138,384.80 are exempt. Lastly, 50% pensioners and rentiers from a foreign source are exempt from paying IPI.
Over the last two decades, the Dominican Republic has adopted policies that minimize regulatory obstacles and provide assistance and incentives to foreign individuals and companies with the goal of attracting more capital into the country. As a result, the Dominican Republic has become a highly receptive environment for international investors becoming the number one recipient of direct foreign investment in the region bringing in 21 billion dollars’ worth from 2006-2015.
The Constitution of the Dominican Republic demands equal treatment under the law for foreign and local investors stating that foreigners are entitled the same rights as Dominican nationals with the exception of participation in local political activities. With equal rights, foreign investors must follow the same rules and regulations applicable to local investors. Foreign investors can freely hold equity in local businesses and real estate as well as joint ventures.
Foreign investment Law 16-95 enacted in 1995 eliminates all barriers formerly imposed on international investments in the Dominican Republic. Investors contributing capital to companies operating in the Dominican Republic are granted unlimited access to all sectors of the Dominican economy with the exception of those investments related to national security and sensitive industries. Registration of foreign investments is optional and no government approval is required for the repatriation of profits.
GOVERNMENT ASSISTANCE TO FOREIGN INVESTORS
The Center for Exports and Investments of the Dominican Republic (CEIRD) founded in 2013 is a government agency responsible for attracting foreign investment and fostering exports. The CEIRD assists foreign investors with business ventures in the country providing them with timely advice, information, and assistance coordinating applications for government permits. In 2002, a one-stop investment office was set up to assist foreign investor with government permit applications related to free zones, tourism, renewable energy, and the field industry.
In order to attract investment capital, the Dominican Republic has setup a wide-ranging system of attractive incentives for investors:
- Incentives to investors in free zones
- Special incentives for border region free zones
- Special incentives for international financial free zones
- Special incentives for logistics operators
- Incentives for investors in the tourism industry
- Incentives for investors in renewable energy
- Incentives for investors in the film industry
- General incentives for innovation and competitiveness in manufactures
- Incentives for immigrant investors
If you’re considering investing in the Dominican Republic, you’re probably wondering what the steps are to building a company in the country. In the Dominican Republic, you can choose to create a Dominican company or a foreign company in the country. The Dominican legislation recognizes different types of companies. The most common are Limited Liability Companies (SRL), Individual Limited Liability Companies (EIRL), Joint-Stock Companies (SA), and Simplified Joint-Stock Companies (SAS).
To create a company in the Dominican Republic, you must register the commercial name with the National Office of Industrial Property (ONAPI) and comply with payments and requirements demanded by the ONAPI. After this registration process, you must pay a tax to the DGII for the company constitution. After these steps, investors must deposit all corporate documents to the Chamber of Commerce and Production of Santo Domingo. Finally, the National Registry of Taxpayers (RNC) must be requested through the DGII.
There are multiple steps and paperwork procedures, therefore we recommend getting in touch with our advisors. Let us guide you through the entire process, ensuring that your business startup goes as smoothly as possible!
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