DOMINICAN REPUBLIC Law and Practice Contributed by: Sarah de León Perelló, Elizabeth Silfa Micheli and Naomi Rodríguez Manzueta, Headrick Rizik Álvarez & Fernández
In S.R.L.s, the maximum number of shareholders is 50. S.A.s S.A.s are typically reserved for large businesses. Due to their characteristics, corporations are the ideal vehicle for companies that wish to pursue venture capital, accumulate a large number of shareholders, and/or eventually pursue an initial public offering. Cor - porations must be mandatorily managed by a board of directors composed of at least three members and are required to have a statutory auditor ( comisario de cuentas ). The minimum capital requirements for an S.A. are: • authorised capital: DOP30 million; and • paid-in capital: DOP3 million (a minimum of 10% of the authorised capital shall be subscribed and paid). S.A.S.s S.A.S.s are a subtype of corporations (S.A.), suitable for medium or large investments and businesses that will not venture into the stock market. The manage - ment and control of an S.A.S. is more flexible than that of a corporation. The provisions of Law No 479-08, apply supplementarily for all situations not described in the by-laws. Management and control rules for Dominican S.A.S.s are flexible as they will be governed by its by-laws. In that sense, they may be managed by a sole director (president), a board of directors or any other manage - ment body or structure. The minimum capital requirements for an S.A.S. are: • authorised capital: DOP3 million; and • paid-in capital: DOP300,000 (a minimum of 10% of the authorised capital shall be subscribed and paid).
• Registration of the company’s trade name with the National Office of Industrial Property (ONAPI), prior to the incorporation of the company. For branch registration, this step is not mandatory but highly advisable. • Registration in the Mercantile Registry of the rel - evant Chamber of Commerce and Production of the jurisdiction of the seat of the company. Upon registration, the company’s Mercantile Registry Certificate is issued and the company is deemed to be duly incorporated. • Once registered at the Mercantile Registry, the company must then be registered with the National Taxpayers’ Registry ( Registro Nacional de Con- tribuyentes or RNC, by its Spanish acronym) at the local tax department. The tax department will issue a certificate validating the company’s registration and assigning an RNC number to the company. In addition, as secondary steps in order to do busi - ness, a company with employees should register with the Ministry of Labour and the National Social Security Treasury (TSS); other registrations may be applicable depending on the activity of the company and if it operates within a regulated sector. Tax for the Incorporation of Companies Currently, a 1% tax is imposed on the authorised share capital upon the incorporation of Dominican companies. This tax does not apply to the registra - tion of foreign branches. However, pursuant to Law No 30-26 on Pro-Economic Growth Measures, Tax Simplification, and Mitigation of the International Cri - sis (“Law 30-26”), this tax will be abolished with effect Local registration of a foreign legal entity typically takes four to six weeks after the relevant filings take place, while the incorporation of a Dominican com - pany could take around six to eight weeks from the date of execution of the incorporation documents until effective registration with the RNC. from 2027. Timeframe
3.2 Incorporation Process Incorporation of a Company
The main steps for incorporating a Dominican com - pany or registering a branch of a foreign entity are as follows.
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