Back in 2007 when I visited the Dominican Republic for the first time I started sending emails to one of the best Attorney’s on the island with lots of legal questions. One of the questions I asked Attorney Fabio J. Guzman was about the laws and how to form a Dominican corporation!

Attorney Guzman replied to my email and said that a minimum of seven stockholders is required. So I wondered who I would want named as a partial owner of my Sosua real estate! Attorney Fabio Guzman went on to say that law firms generally provide nominees when shareholders are less than seven.

Here is a direct quote from the email that Attorney Guzman sent to me back in 2007.

“These nominees would transfer their shares to the real stockholder after the company is formed. The founding members subscribe the articles of incorporation, prepare a list of shareholders and declare before a Notary Public that the shares have been subscribed and paid for by the shareholders. After the documents are approved at a meeting of shareholders, and certain publicity formalities are fulfilled (filing of copies of the corporate documents at the appropriate mercantile registry), the corporation is officially formed. Shareholders must sign the documentation described above personally or through a representative with the appropriate power-of-attorney.”

Attorney Guzman also mentioned that all stockholders must be registered in the Dominican Republic, unless the share certificates are issued to the bearer. If shares are requested in bearer form, the attorney may require that clients provide the following:

• Copy of their passport’s picture page
• Reference letter from a bank in his or her country of residence
• Reference letter from an attorney in his or her country of residence
• Letter from the local Police.

The following information is required to start the Dominican incorporation process:

• Name of Dominican corporation
• Particulars (full name, nationality, occupation, marital status, address, and passport numbers) of the founding shareholders
• Capital of corporation
• Purpose of the corporation

When I asked about costs Attorney Guzman said that incorporation costs depend on the capitalization of the company. The costs range from US$1400 for a standard RD$100,000 pesos corporation to US$10,500 for a corporation with a RD$10,000,000 social capital. Legal fees in the Dominican Republic are subject to a 16% service tax. Remember, these figures were quoted back in 2007!

If you’re wondering how long this all takes I asked that question to Attorney Guzman as well and he said the time required for incorporation depends on the name chosen. If you choose a shelf numbered Dominican company, you will be in control within a week. If, on the other hand, you choose a particular name for the Dominican Corporation, the incorporation time will depend on the availability of the name which could take months. However, you can close your real estate transaction in the new corporate name before the incorporation process is completed.

I was very appreciative of Fabio Guzman taking the time to go into such detail about forming a Dominican corporation. If you have any questions for Attorney Guzman I’m sure he can offer 2010 updates to the law and help you to understand any additional information or the procedure to form a Dominican Republic company.

If there is anything you do not understand or wish to be clarified, please contact Attorney Fabio J. Guzman by email at: Fabio@DRLawyer.com or visit his website at www.DRLawyer.com.

If you would like to comment on this post please use the reply box below…what’s your experience with Dominican corporations?

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