DOMINICAN REPUBLIC Law and Practice Contributed by: Sarah de León Perelló, Elizabeth Silfa Micheli and Naomi Rodríguez Manzueta, Headrick Rizik Álvarez & Fernández
depending on the activity of the company and if it operates within a regulated sector. Tax for the Incorporation of Companies Tax of 1% on the Dominican company’s author - ised share capital. This is not applicable to the registration of foreign branches. Timeframe Local registration of a foreign legal entity typi - cally takes four to six weeks after the relevant filings take place, while the incorporation of a Dominican company could take around six to eight weeks from the date of execution of the incorporation documents until effective registra - tion with RNC. 3.3 Ongoing Reporting and Disclosure Obligations Reporting and Disclosure Obligations Private companies are subject to reporting and disclosure obligations. Every year, the board of directors or the manager or managers, as applicable, must prepare an annual manage - ment report. In addition, in companies with a statutory auditor, the same must also prepare an annual report. Companies must hold an annual shareholders’ meeting, within the first 120 days after the end of the fiscal year, to discuss and approve the accounts of the previous fiscal year. The audited financial statements (when applica - ble), the annual management report, the resolu - tions to be submitted to the shareholders and the statutory auditor report (when applicable) shall be made available to the shareholders at the company’s registered address during the 15 days preceding the meeting. Changes in management, statutory auditor and/or shareholders, capital increase, domicile change, amendment of by-laws, dissolution, mergers, the minutes of shareholders meetings
and any other relevant corporate documents, must be registered before the Mercantile Reg - istry, which is a public registry. The registration of documents in the Mercantile Registry grants these documents effectiveness against third parties. There is, however, no governmental agency in charge of enforcing these filings or corporate governance in general, unless it is a listed company or regulated sector. In addition, companies are subject to monthly and annual tax reporting and filings. Notice of Relevant Changes Companies should register with the correspond - ing Mercantile Registry and the Tax Department (DGII, by its Spanish acronym) the general infor - mation of the company (domicile, share capi - tal, shareholding structure, management, etc). Relevant changes to the company’s registered information should also be reported. Financial Statements All commercial entities that borrow funds from third parties, issue securities of any nature or have gross income greater than a 100 minimum wages must have their financial statements audited in accordance with the norms of the Certified Public Accountants Institute of the Under Anti-Money Laundering and Terrorism Act (“Law No 155-17”), companies must disclose to DGII general information on the ultimate benefi - cial owners of the company. A ”beneficial owner” is defined as the natural person who exercises final effective control over a legal person or that holds at least 20% of the share capital of said legal person, including the natural person for the benefit of whom a transaction is carried out. The disclosure of the company’s ultimate beneficial Dominican Republic. Ultimate Beneficiary
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