Registering a subsidiary in the Dominican Republic when
expanding your business into the Caribbean will provide you with a
commercial presence with a significant level of independence from
your operations elsewhere. Because when you register a subsidiary
in the Dominican Republic, the parent company will be shielded from
potential risk, as it will not be legally or economically liable in
all matters related to the subsidiary.
An alternative to registering a subsidiary, beyond full company formation in the Dominican Republic,
is to form a branch.
The Dominican Republic has the eighth-largest economy in Latin America, and
the largest among Caribbean nations, and has registered steady
economic growth over recent years. As highlighted by figures published by the World Bank, the
country had a gross domestic product (GDP) of $88.94 billion in
2019 (all figures in USD) and a fast-rising gross national income
(GNI), which stood at $8,090 per capita that same year —
almost double that of a decade previous.
The Dominican economy is the largest in the Caribbean.
Register a subsidiary in the Dominican Republic
While the Dominican Republic is known globally as a tourist
destination, with the tourism and hospitality sector contributing
6.3 percent of the country’s GDP, other important industries
include mining and agriculture. The country’s most important
export commodities include nickel, sugar, gold, silver, coffee,
cocoa, and tobacco.
If you are considering doing business in this Caribbean nation,
read on to understand more about registering a subsidiary in the
Dominican Republic. Or you could just contact us now.
Why register a subsidiary in the Dominican Republic?
A subsidiary is a separate business entity from a parent company
operating in another location. The legal separation of a subsidiary
can bring significant benefits to the parent company terms of tax
and liability.
Being fully responsible for complying with local regulations, a
subsidiary can have its own corporate bank account, and enjoy a
high level of autonomy to develop its own organizational culture
and make important decisions. Subsidiaries can also have their own
sub-companies.
Note that although a subsidiary in the Dominican Republic is
considered an independent entity from the parent company, the
parent company can modify its shareholding composition to have a
majority stake. This means that the parent company can move to
establish more control over the subsidiary, if necessary.
Benefits of registering a subsidiary in the Dominican
Republic
Registering a subsidiary in the Dominican Republic can offer
your business multiple benefits, such as:
Tax benefits: Through the establishment of
subsidiaries, a parent company can significantly reduce its tax
liability through government-authorized deductions.
Increased efficiency: There are cases in which
the parent company manages to increase the efficiency of its
operations through one or more subsidiaries, as it is easier to
manage several small companies than a very large organization.
Own corporate identity: a subsidiary in the
Dominican Republic is free to create its own corporate management
methods and adopt its own identity, allowing it to adapt to the
particularities of the Dominican market and maximize the chances of
success.
Risk reduction: If a subsidiary in the
Dominican Republic files for bankruptcy, it can accept the
sanctions of the bankruptcy proceedings without involving the
parent company. In addition, the subsidiary can also be sued by a
third party without involving the parent company.
How to register a subsidiary in the Dominican Republic
When registering a subsidiary in the Dominican Republic, in
order to be accepted onto the National Taxpayer Registry, the
following requisites must be met:
1. The certificate of the validity of the main
company in its country of origin with the proof that its articles
of incorporation or its statutes do not prevent it from
establishing subsidiaries abroad.
2. Copy of the articles of incorporation and
the statute or equivalent instruments in the country of origin.
3. Photocopies of passports and other
documentation related to the administrators and representatives of
the parent company.
4. Appointment of a local legal
representative.
5. Agreement to establish a subsidiary in the
Dominican Republic, indicating:
- The capital assigned to carry out its activities in the
country - Place of domicile of the subsidiary in the Dominican
Republic
Register a subsidiary in the Dominican Republic takes five
steps
Originally published 15 January, 2021 | Updated on: 04
December, 2022
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.