Off-shore Companies: A Good Option for Doing Business in the Dominican Republic

For most of us, doing business in a foreign country can be stressful and complicated. Trying to understand their laws and ways of doing business can be a challenge, even for big foreign enterprises that wish to expand into other countries, looking for new and promising markets. For many years, the Dominican Republic has captured foreign investors looking to develop the Dominican economy, but although this country has modernized most of its laws, there are still many restrictions that discourage foreigners in using a Dominican company. It is at this point, where using an off-shore company for doing business in the Dominican Republic arises.  

 

An off-shore company is a commercial society duly incorporated in a foreign country and is used in most cases in a different country from where it was incorporated. Generally, people who decide to acquire an off-shore company are looking for the following benefits: 

• Confidentiality; 

• Flexibility for movement of funds; 

• Tax exemptions; 

• Quick, Secure; and, 

• Privacy in business transactions. 

 

Countries like Panama, the British Virgins Islands, Bahamas, Grand Cayman Islands, Belize, Nevis, among others, offer these kinds of incentives to attract foreign investors, being these countries commonly known as the famous “tax heaven” destinations. 

 

Notwithstanding the above mentioned, it is important to explain, how a foreign or off-shore company benefits from these regimens and at the same time operate in the Dominican Republic? Dominican legislation does offer advantages to foreign enterprises, including off-shore companies, in order for them to do business in our country. In this sense, once the off-shore has been incorporated, it will be necessary to register such company before the Dominican Chamber of Commerce and the Internal Revenue Taxes in order to obtain both, the Mercantile Registry and the Dominican Tax ID number known as “RNC” (Registro Nacional de Contribuyentes).  

 

All foreigners interested in doing business in the Dominican Republic have the option of either acquiring an off-shore company that has already been incorporated and is ready to operate (shelf company) or incorporate a new company from scratch. For both cases, it will be necessary to hire a Dominican law firm in order for them to request the corresponding legal permits mentioned above, if you decide to operate in the Dominican Republic. 

 

If you already have incorporated an offshore company and wish to operate in the Dominican Republic the only requirement is to obtain the legal permits (Mercantile Registry and RNC). The required documents for requesting such permits are the following: 

• Passport copies of the Directors, Members of the Company Board and Stockholders; 

• Certificate of Incorporation; 

• Company Bylaws; 

1. Certificate of Good Standing;  

1. Board of Directors Resolution authorizing the establishment of a branch in the Dominican Republic;  

1. Memorandum and Articles of Association containing the members of the board representing the company at the moment the request is made; and, 

1. Any other incorporation document required by the country or State where the company is incorporated. 

 

The aforementioned documents shall be legalized with the Apostille in the country or state where the company was incorporated. The timeframe for obtaining both permits are approximately between two (2) to four (4) weeks. Once these permits have been issued, the off-shore company will be ready to operate in the Dominican Republic.  

 

An off-shore company may also become handy when applying for Dominican Residence, since having a guarantor, which can be either a Dominican citizen or Dominican company, is a requirement established by the General Migration Department.  

 

It is important to point out that after initiating its operations in the country, the off-shore company will be obliged to pay 25% of its generated income before the Internal Revenue Tax office.