Doing Business in DR

Foreign Investment:
Currently, foreign investment is regulated by Law 16-95 on Foreign Investment, adopted on November 20, 1995, and the Presidential Decrees 380-96 and 163-97. These legislations provide an attractive legal framework for foreign investors and one of the main tools to promote the flow of capitals to the country.

Law 16-95 allows almost any type of foreign investors to buy through the commercial banks the foreign currency needed to remit abroad all the capital invested and the dividends obtained from the investment.

This law also sets the principle of equal treatment between nationals and foreign investments, securing them the same legal protection, without any discrimination. In that sense, Law 16-95 abolished Article 12 of Law 173 of 1966 on the Protection of Agents and Licensees, thus allowing foreign persons and companies to register under such law as agents or representatives of foreign firms, and benefit from the protection granted to the local agent in case of unjust termination of its agreement by the foreign company.

Foreign investors may participate in any sector of national economy, without any limitation outside those provided in the special laws that regulate each sector. Foreign investment can take form of capital contributions, in-kind contributions, intangible technological contributions, such as trademarks, product models, industrial procedures, technical assistance and others, and financial instruments issued and traded abroad that have been authorized by the Monetary Board. Those foreign investments can be destined to the capital of any type of business association, including branches of foreign companies, the purchase of real estate property, and the acquisition of shares or other financial instruments authorized by the Monetary Board.

As registration procedure the investor has just to notify its investment to the Central Bank within 90 days after its placement in the country in order to automatically obtain a Certificate of Foreign Investment Registration.

Banking Regulations:
Banking is currently regulated by the Law 183-02. It adopts de concept of Monetary and Financial Administration which includes the Monetary Board, the Central Bank and the Superintendence of Banks.

It is up to the Monetary Board to determine the nation’s monetary exchange and financial policies, to grant and revoke authorizations to operate as financial entity, to authorize mergers, acquisitions, etc. among entities, to adopt monetary and financial regulations for the application of the law, and to adopt regulations of general application to regulate the monetary and financial system.

It is up to the Superintendence of Banks to carry on the supervision of the financial entities in order to see to the compliance of their legal obligations. This body may also impose sanctions and propose the authorization and revocations of financial entities to the Monetary Board.

The Central Bank implements and drafts the monetary, financial and exchange rate policies. It is an autonomous and public institution and it is its own legal entity. The Banking operation is governed by the regimen of previous authorization. In that sense, to initiate its operations as a financial entity, banks have to get a previous authorization by the Monetary Board. Banks and credit entities will be subject to the deposit insurances established by the Monetary Board.

Intellectual Property Rights:
The Dominican Republic became member of the World Intellectual Property Organization (WIPO) in June 2000. It has also signed several treaties of Intellectual Property Rights Protection as the Convention on the Protection of Literary and Artistic Work, the Paris Convention for the Protection of Industrial Property, and the WIPO Convention, among others.

The Constitution of the Dominican Republic (paragraph 14 article 8) recognizes the exclusive and temporal property of inventions and scientific, autistics and literary productions. In the recent years new laws have also been adapted concerning authors’ rights and industrial property in order to fulfill of the international intellectual property rights protection standards. Those laws that currently regulate the intellectual property rights in the Dominican Republic are Law 20-00 on Industrial Property and its Rules of Application (No. 599-01), Law 65-00 on Author Rights and it’s Rules of Application (No. 362-01).

Health, Safety and Environmental Regulations Affecting Business:
In 2000, the National Congress of the Dominican Republic passed the new environmental law (64-00) of the country. This law creates a Ministry of Environment and Natural Resources which oversees the environmental impact environment review process required for development.

The law establishes a system of environmental studies and permits, and implements a group of new environmentally-related terms from “protected areas”, “environment quality” and “sustainable use” to “contaminant”, “load capacity” and “sustainable development”. All those terms and studies should be familiar to the investors and businessmen and women when initiating a business that could be have an environmental impact.

Labor Regulations:
The labor regulations of the Dominican Republic are content in the Law 16-92 (Labor Code) and the Rules of Application of Law 16-92. The country has also ratified approximately 30 Conventions of the International Labor Organization (ILO). In this regard, in the recent years the country has placed significant emphasis on improving the capacity of the Department of Labor and other Labor Institution in order to give an adequate protection to the rights of workers and comply with the international standards.

The application of labor laws and regulations rests in the Ministry of Labor and its dependencies. All work conflicts which may arise between employers and workers or the association which represents them are regulated by the labor courts.

Steps and Time to open a new Business:
Dominican laws allow investors to choose among the different forms of business organizations without restrictions. The most common form of business association in the country is the Limited Liability Company or corporation but the Commercial Code also provides several other forms of associations. For the incorporation process the Commercial Code requires a minimum number of seven shareholders, but the additional shareholders may have, if wanted, a participation of just one share in the company’s capital.

After all the paperwork is done, some registration and publicity formalities have to be complied with.