How to Structure Financial Transactions with Legal Certainty

Well-structured financial transactions combine solvency, compliance, and enforceability . In the Dominican Republic, legal certainty is achieved by aligning the contractual design with the regulatory framework, defining enforceable guarantees , and making rights enforceable against third parties .
The objective is to reduce uncertainty, agency costs, and exposure to stress or insolvency events. These verifications are essential to preserve value.

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Legal capacity, guarantees and regulatory framework

The starting point is the capacity of the parties and their corporate form .

Law 479-08 on Commercial Companies and Limited Liability Individual Businesses defines the types of companies and the governing rules that affect approvals, representation, and debt limits.

Before documenting a loan or financial lease, the corporate purpose , powers , commercial registry and statutory restrictions for granting guarantees must be reviewed.

When financing involves intermediation or public acquisition, Monetary and Financial Law 183-02 and sectoral supervision apply .
Unregulated lenders may grant corporate loans, but they cannot engage in reserved activities.

If securities placements are structured , Securities Market Law 249-17 applies , with registration requirements for the issuer.

The core of financial legal security lies in guarantees .

For movable assets and rights (accounts receivable, inventory, equipment, shares), Law 45-20 on Secured Transactions creates a unitary regime with electronic registration and priority rules.

The structure must specify the collateral , default events and enforcement mechanisms , ensuring traceability and coordination with previous liens.

For real estate, the mortgage is registered in accordance with Real Estate Registry Law 108-05 . In projects with multiple creditors or tranches, it is advisable to establish inter-creditor agreements and distribution rules.

When asset separation is required, Law 189-11 enables guarantee or administration trusts , which isolate flows and improve the transparency of payment sources.

Regulatory compliance and risk prevention

If funding is provided through the capital market , independent trusts and public offering trusts may be used under Law 249-17 .
The master agreement and supplements must define sources of payment, acceleration, reserve accounts, and hedges , ensuring consistency between the prospectus and the underlying contracts.

Regulatory compliance is cross-cutting.
Law 155-17 against Money Laundering and Terrorist Financing requires due diligence, identification of the beneficial owner, monitoring, and reporting .

Integrating KYC/AML from the term sheet avoids delays and rejections from trustees, custodians, or banks. The contractual architecture should also provide for efficient and enforceable dispute resolution .

Commercial Arbitration Law 489-08 validates arbitration clauses, and the 1958 New York Convention facilitates the enforcement of foreign awards.
In cross-border contracts, the applicable law and the arbitral seat must be aligned with the location of assets or the forum of enforcement, thus strengthening international legal certainty .

Tax aspects and international documentation

Document authenticity is simplified by the 1961 Hague Convention (Apostille) , which allows powers of attorney and certificates to circulate between member states without additional consular legalization.

It’s a good idea to coordinate forms, translations, and apostille timing to avoid delaying the closing.

In tax matters, Law 11-92 (Tax Code) requires mapping:

• Withholdings on interest for non-residents,
• Thin capitalization rules,
• Deductibility of financial expenses,
• ITBIS applicable to certain services, and
• Registration fees for guarantees.

In trusts, the tax treatment of the independent assets and beneficiaries must be evaluated .
A well-planned tax structure complements the legal security of the financing.

Restructuring, contingencies and transparency

Law 141-15 on the Restructuring and Liquidation of Businesses and Individuals provides for the suspension of individual actions and a payment order that protects the priority of secured credits according to the perfection process.
Designing guarantees and flows with a bankruptcy perspective (cash waterfall, debt service reserve account, non-encumbrance agreements, and covenants) reduces the risk of loss of priority or non-enforcement.

For cross-border investments, Law 16-95 on Foreign Investment ensures repatriation and access to the foreign exchange market under Law 183-02 .
The use of hard currencies in contracts must be accompanied by value clauses and exchange protections .

Closing requires realistic checklists and timelines: corporate resolutions, powers of attorney, signed contracts, registrations, certifications, endorsed insurance, and confirmation of conditions precedent .

Coordination between legal counsel, administrative agent, trustee and registrars is key to preserving the legal security of the closing .

Finally, information transparency maintains the credit-investor relationship.
Regular disclosure, audited financial statements, and information covenants allow for risk monitoring and protections to be activated without extensive litigation.

Conclusion

Structuring financial transactions with legal certainty in the Dominican Republic requires corporate solvency, strong guarantees, regulatory compliance, and documentary consistency .
Relying on national laws—along with the New York Convention (1958) and the Hague Convention (1961) —allows for the design of robust, bankable, and competitive structures , strengthening market confidence and operational stability.