Opening A Business In The Dominican Republic

• Published date: 21 June 2023
• Subject Matter: orporate/Commercial Law, Employment and HR, Law Practice Management, Corporate and Company Law, Contracts and Commercial Law, Contract of Employment, Employee Rights/ Labour Relations, Outsourcing, Human Resource Management
• Law Firm: L&E Global
• Author: S'nchez & Salegna and Angelina Salegna Bacó (S'nchez & Salegna)

1. INTRODUCTION

When opening up shop in the Dominican Republic it is important to know matters such as labour and employment law and payroll and benefits. The principal characteristics of the Labour Code of the Dominican Republic are:

• excellent protection of the employees;
• the prevalence of the facts;
• prohibition of harmful changes of the employees; and
• joint responsibility (a group of companies).

Another aspect to consider when opening up shop in the Dominican Republic is corporate law. This law regulates the incorporation and regulation of companies. In the Dominican Republic, there are several types of companies:

• General Partnerships (Sociedad en Nombre Colectivo);
• Ordinary Limited Partnerships (Sociedad en Comandita Simple);
• Limited Partnerships with Shares (Sociedad en Comandita por Acciones);
• Publicly or Privately Owned Share Companies (Sociedades Anónimas Públicas o Privadas);
• Limited Liability Partnership (Sociedad en Responsabilidad Limitada);
• Individual Enterprise with Limited Liability (Empresas Individuales de Responsabilidad Limitada).

However, the most popular is Limited Liability Partnership (SRL) because it is the simplest to constitute.

Every change applied in the company as the transfer of quotas, changes of members of the board of directors or managers, and so on, shall be registered before the competent Chamber of Commerce and Production and General Directorate of Internal Taxes (DGII) (some changes) to apply to third parties.

Also, there are aspects to consider depending on the type of business to practice in the Dominican Republic. For example, to establish a free zone of exports, besides the process of incorporation of the company, it is necessary to obtain a license issued by the National Council of Export Processing Zones.

At S'nchez Y Salegna, we protect our clients and help them thrive whether their corporation is a consumer products manufacturer, business process outsourcing (BPO), premium chocolate manufacturer, software products provider, or small business.

Below we will explain the requirements in labour and employment law, corporate law, and payroll and benefits for opening up a shop in the Dominican Republic.

2. LABOUR AND EMPLOYMENT LAW REQUIREMENTS

a) Employer Policy Requirements

Article 62 of the Dominican Constitution regulates the right to work. It stipulates that work is a right, a duty, and a social function exercised with the State's protection and assistance. Therefore, it is an essential purpose of the State to promote decent and remunerated employment.

The primary sources of law regulating labour relations in the Dominican Republic are Law No. 16-92 (commonly called the "Labour Code") and Decree No. 258-92 (Regulation for the Application of the Labour Code).

Also, the Dominican Republic has Law No. 87-01, which establishes the Dominican Social Security System. This law regulates and develops the reciprocal rights and duties of the State and citizens regarding financing for the protection of the population against the risks of disability, unemployment by advanced age, survival, illness, maternity, and occupation hazards.

Another essential source is Regulation No. 522-06 on Hygiene and Safety at work. This regulation establishes the norms and procedures applicable to all branches of...