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| Dominican
Republic Consulate General |
| Français |
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-
SETTING
UP OF TRADING COMPANIES IN THE DOMINICAN REPUBLIC.
To
set up a
company, you need:
-
-
AT
LEAST SEVEN SHAREHOLDERS: The Dominican commercial law requires at
least seven shareholders. Generally, the incorporator determines the
distribution of shares. If he wants, he can allocate 1% of the shares
to every one of the other six shareholders and keep the absolute
majority. Shareholders can be Dominican citizens or foreigners. On the
other hand, they must be of age. They can be relatives. Trading
companies or firms can also be shareholders. If the incorporator wants,
minority shareholders can be represented by law firms.
- AN AUTHORIZED SHARE CAPITAL: This amount of money is
considered as necessary or sufficient to ensure the smooth running of
the business. It is this sum of money which determines the amount of
taxes which will have to be paid for the setting up of the company.
Generally, the minimum capital used is 100.000 Dominican pesos ($3.079).
- A PAID CAPITAL: A company must have issued
shares of at least 10% of the authorized share capital before starting
transactions.
- DIFFERENT TYPES OF SHARES: The Dominican law allows the issue of communal and
preference shares that can be registered, ordinary or bearer shares.
- THE VALUE OF SHARES: The minimum value of a share
is 5.00 Dominican pesos ($0.15).
- AN AUDITOR: He is chosen among the
constituent meeting and the annual general meeting of shareholders. The
auditor supervises the management and the functions of the company.
- A BOARD OF DIRECTORS: He takes charge of the
management of the company. Generally, it is composed of a president, a
treasurer and a secretary, all of them elected for a period which does
not go beyond six years. The Dominican law allows the nomination of a
single president. The incorporator can be the manager but he can also
entrust one or several third parties with the management.
Even if it is true that a
company
can be set up abroad and function in the Dominican Republic, if the
incorporator decides to set up the company according Dominican laws
– the
procedure of setting up the company is about two months – it
is necessary to follow
the after-specified steps.
1.1
Availability and registration
of the
name of the company.
Before dealing with the
company’s
papers, it is advisable to make sure that an identical name or a name
similar
to the one chosen by the incorporator does not exist. A request should
be made
to the National Office of Intellectual Property (NOIP) and the State
Secretary
of Industry and Commerce of the Dominican Republic.
Thus, an antecedents investigation
of the chosen company name will be carried out.
Within the 10 days following
the
request, the NOIP’s Department of Brands and Distinguishing
Marks gives a
response, confirming or rejecting the availability of the commercial
name. If
the response is positive, as soon as it is received and to prevent
another
company from setting up with the same name, then the incorporator will
be able
to start the formal registration process of the name in the
NOIP’s register of
trade names. This registration request must indicate the name, the
president’s
information and the future activity of the company.
The choice of the denomination
is
free and can be fanciful, subject to some legal prohibitions (the use
of some
terms is forbidden since it may be reserved for some institutions or
lines of
business.
However, it must not lead to
confusion with other names of companies or brands, or offend
personality rights
in case of use of a particular patronymic.
1.2
Drawing up and signing of
statutes.
In the Dominican
Republic, statutes are
all companies’ basic documents. Statutes are drawn up and
signed by the
company’s incorporator(s) or his (their) representatives, in
five (5) copies,
at least.
1.3
Subscribers list and state of
payment of shares.
A list of the subscribers or
the
first shareholders is prepared (they must be at least seven) with the
indication
of their own information (name, first name, residence, date and birth
place,
nationality, date and place of wedding and marriage settlement for
natural
persons; corporate name, corporate form, capital, corporate
headquarters,
duration, date of setting up and direction organs for legal entities;
principal
and secondary establishments, origin, activity, beginning and running
methods…). The capital contribution value and the number of
shares issued by
each person or shareholder will be noted.
1.4
Notarial declaration.
Prior to the constituent
meeting,
the person who receives the contribution has to make a declaration in
front of
a notary of the Dominican Republic
proving the
existence of the
contribution. The person has to provide the notary with a copy of
statutes,
subscribers list and the state of payment of shares. Besides, he must
show the
receipt of tax on capital payment.
1.5 Constituent meeting.
When the previous requirements
are
fulfilled, the first constituent meeting of shareholders can take
place. The
aim of this meeting is to formally ratify statutes and the declaration
made in
front of the notary and to choose the first directors and the first
auditor.
1.6 Tax payment on authorised
capital.
Dominican law number 1041 of
1935 subjects
the setting-up of companies to a proportional tax on authorised
capital. In
addition to tax payment provided for in this law, 12% of the paid
amount will
have to be paid according to the regulation of the law n°1041,
provisions
provided for in the law n°1113 of 1959 and taxes for the
Register of Documents,
contained in the law n°80-99. Payment of these taxes can be
made in any
regional office of the Dominican General Direction for Taxes. A letter
will
have to be sent mentioning the name of the company and the amount of
authorised
capital.
If a company has made a request
to
settle in a free zone, being in a setting up process, enjoying the
availability
of the name of the company and having been submitted to the approval of
the
Free Zones Council of the Dominican Republic, it will be able to ask
for a
certificate in order to benefit from tax exemption on the setting up.
1.7
Mercantile and documents
register.
Statutes, subscribers list,
report
of the first meeting of shareholders and the second if there is one are
registered for a consideration during the month following the
setting-up of the
company in the Chamber of Commerce and Production of the place where
the
company will settle in. The Chamber, which will demand regularity in
the tax
payment on capital and register taxes, will provide it with a
certificate from
the Mercantile Register. The price for trade companies to be in the
Mercantile
Register depends on authorised share capital. Mercantile Register will
have to
be renewed every two years.
1.8
National Register of Taxpayers.
When documents have been
registered
and obtained, the Mercantile Register of the Chamber of Commerce and
Production
will be requested by means of a letter addressed to the General
Direction for
Taxes. The Dominican National Register of Taxpayers, equivalent to the
French Sirène, is a
registration number which
identifies the company and follows it until its disappearance. With
this
request, the following documents have to be attached:
-
Statutes.
-
Subscribers
list and state of payment of shares.
-
Copy
of the notarial deed (“Compulsa”).
-
Report
of the General Constituent Meeting and list of shareholders present or
represented during the meeting.
-
Regularity
of tax payment on capital and register taxes.
-
Certification
of tax exemption if the company settles in a Dominican free zone.
- Copy
of the Dominican Mercantile Register certificate.
-
Form
for the National Register of Taxpayers.
-
Copy
of the Dominican Free Zones Council’s decision with the
approval of the company
if it settles in a free zone.
- Payment
receipts and Dominican tax stamps.