How to establish a Limited Liability Company (S.R.L.) in the Dominican Republic

A Limited Liability Company (S.R.L.) is one of the most widely used corporate structures in the Dominican Republic due to its balance between legal security and operational flexibility. General Law regulates it on Commercial Companies and Limited Liability Sole Proprietorships No. 479-08 and its amendments. This type of company allows multiple individuals or legal entities to form a business with capital divided into shares, limiting their liability to the amount of their contributions.

Its versatility makes it an excellent option for small and medium-sized enterprises (SMEs), facilitating business formalization with a simple and efficient structure.

Incorporation Process

The process of establishing an S.R.L. is relatively straightforward but requires compliance with certain legal requirements. Below are the main steps:

1. Registering the Trade Name

The first step is registering the trade name with the National Office of Industrial Property (ONAPI). This procedure can be done either in person or online.

2. Drafting and Signing the Incorporation Documents

Legal documents must be prepared to establish the company’s operational framework. These include:

A document that regulates the company’s operations and the relationship between partners. It must include:

1. Company name: Must be unique and followed by “S.R.L.” or “Sociedad de Responsabilidad Limitada.”
2. Corporate purpose: Defines the company’s main activities.
3. Registered address: The official address within the Dominican Republic.
4. Duration: Can be indefinite or for a set period.
5. Capital stock: There is no mandatory minimum amount. It is divided into shares of no less than RD$100.00 each.
6. Management: Specifies whether a sole manager or multiple managers will manage the company.
7. Partners’ meetings: Defines frequency, quorum, and meeting requirements.
8. Rights and obligations of partners: Regulates profit distribution, voting rights, and share transfers.
9. Dissolution and liquidation: Establishes the grounds and process for liquidation.
10. Minutes of the Constituent Assembly: A document in which partners verify compliance with legal requirements and approve the bylaws.
11. List of Partners and Contributions: This list includes each partner’s name, ID/passport number, and ownership percentage.
12. Copies of partners’ ID cards or passports.

3. Payment of the Incorporation Tax

The incorporation tax is equivalent to 1% of the authorized capital and must be paid to the General Directorate of Internal Taxes (DGII).

4. Registration in the Commercial Registry

The company must be registered with the Chamber of Commerce and Production corresponding to its registered address. The incorporation documents must be submitted, and the registration fee paid, which varies depending on the capital stock. This registration grants the company legal personality and must be renewed every two years.

5. Registration with the General Directorate of Internal Taxes (DGII)

Before starting operations, the company must register with the DGII and obtain its Taxpayer Identification Number (RNC), which is required to open bank accounts and conduct business transactions. This process can be completed online or in person at the DGII.

Once these steps are completed, the company is legally established and can operate in the Dominican Republic. However, if the company plans to hire employees, it must fulfill additional obligations, such as registering with the Treasury of Social Security (TSS). Additionally, depending on the economic activity, specific permits may be required, such as those issued by the Ministry of Public Health for businesses in the healthcare sector.

Conclusion

Establishing a Limited Liability Company (S.R.L.) in the Dominican Republic is a highly efficient option for business formalization, as it provides a flexible and secure structure for partners.

Its main advantage is that it limits partners’ liability to their contributions, protecting their assets. Additionally, as it does not require a high minimum capital or mandatory annual audits, it is an accessible option for small and medium-sized enterprises looking to operate legally with reduced administrative costs.

To ensure compliance with all legal requirements, it is recommended to seek corporate law professionals for assistance. This will enable the company to operate with greater security and stability within the current legal framework.