Five centuries after Christopher Colombus, Seedstars set up foot on Santo Domingo for the very first time, adding the Caribbean to its map of emerging tech hubs. Great news!
Traveling to a paradisiac island to look for promising startups across beaches, coconut and colorful fishes sounded like a dream.
And while we were very excited to go to the Dominican Republic for its incredible bio-ecosystem and fairytale landscapes, we never expected to find an El Dorado of opportunities for innovation and entrepreneurship as well.
This article gives an overview of key recent developments affecting doing business in Dominican Republic as well as an introduction to the legal system; foreign investment, including restrictions, currency regulations and incentives and business vehicles and their relevant restrictions and liabilities. The article also summarizes the laws regulating employment relationships, including redundancies and mass layoffs, and provides short overviews on competition law, data protection, and product liability and safety. In addition, there are comprehensive summaries on taxation and tax residency, and intellectual property rights over patents, trade marks, registered and unregistered designs.
Many of Corcons clients have chosen the Dominican Republic for their own banking or investment needs. US Dollar or EURO savings accounts, bank certificates of deposit (90-day or longer) or commercial paper investments (90-day or longer) are both locally tax-free and also offer the opportunity for higher rates of interest than what may be found elsewhere. As an example of the rates available for a 90-day time deposit (minimum US$ 10,000 or EURO), one can expect 5% or more for a bank CD and up to 9% for a commercial paper investment (90 Days). All interest for such deposits is paid monthly, and may be direct deposited to your bank savings account.
Many Americans, Canadians, and other nationalities mistakenly believe the stereotype that the Dominican Republic is a tin-pot third world banana republic. They believe there are no regulations, extreme poverty everywhere and complete government mismanagement. I do not agree with this opinion, but this is the stereotype that many other nationalities still have.
Yes, Yes and Yes. Most of the Dominican Banks now offer on-line banking or at least the ability to view accounts on-line. Some of the smaller savings and loan type of institutions may not all have an Internet or on-line system in place for clients, but all of the larger banks certainly do. However, each bank has their own comfort level in terms of what they will allow to happen using the on-line system. Almost all have some form of local bill paying option and ability to transfer between accounts within the bank. Most Dominican Banks are very concerned about fraud and of that reason would tend not to allow outbound wire transfers to be done via the on-line system (they want to make sure it is really you requesting the disbursement), and instead would prefer clients make such requests in person using the banks own specialized request forms for that purpose.
Why Would Someone Want to Bank in the Dominican Republic?
First and foremost, one must understand the idea of a FREE MARKET and what that means. A free market means, among other things, that capital will seek out the highest return or benefit. That is to say, investors will send their money where it suits them best, for the maximum return. It also means, whether you realize it or not, countries are in competition with one another for foreign investment money. In the case of the Dominican Republic, the central bank very much would like to see the US Dollar cash reserves of the country to increase for a variety of very positive reasons (as does any other small country that trades with the US, Europe or Asia).
The Dominican Republic is the second largest country in the Caribbean region by area. Tourism, agriculture, mining and textiles are among the key sectors of the economy making it an attractive location to start your business. But, there can be challenges if you don’t know the specifics of the local processes.
In the Dominican Republic, there are four types of entities that you may choose for your business, a Limited Liability company, Individual Enterprise of Limited Liability company, a Joint Stock company or a Simplified Joint Stock company.
Mortgage loans are quickly available to US - Canada - Europaen and Dominican citizens with any Bank, our local financial partners for real estate transactions. If you are looking at a built property or if you want to buy a land and build a house on top of it, in both cases they will help finance your project.
The first thing to do when looking to buy a property in the DR (with a loan) is to verify if you can actually apply for a loan. It will makes things move faster if you are decided on a specific property and also help your negotiation with the seller. The documents required by the Banks are the following:
- Copy of your passport plus other identification
- The two last tax returns
- Employment letter if employed
- A bank reference from your main bank
Are marketing agreements regulated?
Contractual relations between the parties to any agency agreement in the Dominican Republic are regulated by Law No 173 of 6 April 1966 for the Protection of Agent Importers of Merchandise and Products (Law No 173), if the contracts are registered in the Legal Department of the Central Bank of the Dominican Republic. Law No 173 protects local agents from untimely termination or breach of a contract on the part of their foreign counterparts by providing considerable compensation in these cases. However, Law No 173 does not apply to agreements involving a party from the US, entered into after the United States-Dominican Republic and Central America Free Trade Agreement (DR-CAFTA) came into force, unless the contract states otherwise.
Definition and legal requirements. For an invention to have patent protection, it must:
- Be novel.
- Involve an inventive step.
- Be capable of industrial application.
Registration. Patents must be registered at the Patent Department of the National Office of Industrial Property to be protected.
Enforcement and remedies. Patent rights can be enforced through a criminal or civil action before the relevant court. A person who breaches a patent can be subject to imprisonment and fines.
Length of protection. Protection lasts for a non-renewable period of 20 years from the date of filing the application.
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