Dominican law recognises several forms of business entities under Law No 479-08 on Commercial Companies and Individual Limited Liability Enterprises. The most widely and commonly used are:

• limited liability companies (Sociedades de Responsabilidad Limitada or SRLs);
• simplified joint-stock companies (Sociedades Anónimas Simplificadas or SASs); and
• joint-stock companies (Sociedades Anónimas or SAs).

Other less common vehicles include partnerships, individual limited liability enterprises (EIRLs), joint ventures, silent partnerships and branches of foreign companies.

The choice of entity depends principally on the number and nature of investors, particular governance requirements, requirements around transferability of shares, financing needs and applicable regulations, which may restrict certain activities to one or more type of entity.

In light of the above, SRLs are commonly used for closely held businesses and subsidiaries, SASs are commonly used for businesses in need of greater flexibility for sophisticated governance and investment arrangements, and SAs, which have the most restricted governance requirements, are generally preferred for larger businesses, capital-raising structures and certain regulated activities for which incorporation of this type of entity is mandatory.

Shareholders of SRLs, SASs and SAs generally benefit from limited liability up to the amount of their investment. Tax treatment is not usually the principal differentiating factor between these corporate forms, as taxes are not generally determined by entity type but rather by other considerations such as annual income, operation size, and others.

Incorporation

Incorporation of commercial entities in the Dominican Republic generally involves three main steps:

• registration of the trade name with the National Office of Industrial Property (ONAPI), typically completed within one business day for a filing fee of approximately USD80;
• execution and registration of the constitutional documents with the competent Chamber of Commerce and Production to obtain the Mercantile Registry, typically within three to five business days; and
• registration with the Dominican Tax Administration (DGII) to obtain a National Taxpayer Registry (RNC) number, which generally requires an additional five to ten business days and carries no filing fee.

Required documents generally include the company’s bylaws and incorporation documents, information and identification documents for the shareholders and managers, and evidence of the company’s registered office for tax purposes. Documents issued abroad ordinarily require apostille and, where applicable, translation into Spanish for official registration.

Government fees depend principally on the type of entity (commercial entities or individuals; local or foreign) and its capital. Mercantile Registry fees are calculated according to the company’s capital and generally start at approximately USD40 for companies with capital of up to USD1,670. In addition, most companies are subject to an incorporation tax equal to 1% of their registered capital, subject to a minimum payment of USD17; EIRLs are exempt from this tax. These amounts do not include any legal, notarial, apostille, legalisation and translation fees.

An ordinary non-regulated incorporation can generally be completed within approximately two to three weeks once all required documents are available, although timing may vary depending on the relevant authorities and whether any objections are raised during the procedures.

After these initial main steps have been completed, companies must proceed with any ancillary registration procedures related to their operations and sector-specific requirements.

Ongoing Compliance

Companies must maintain their corporate books and ownership records, approve annual accounts and management matters, maintain and renew their Commercial Registry registration every two years, and register material corporate changes with the appropriate Chamber of Commerce. Information filed with the DGII, including shareholder and ultimate beneficial ownership information, must also be kept up to date.

Companies are additionally subject to annual and periodic tax filings with the DGII, including the corporate income tax return, and regulated businesses may face further licensing, reporting and capital requirements depending on their sectors and operating needs.

In the SAs and SASs, capital is divided into shares, while SRLs issue participation quotas rather than shares. For SAs and SASs, the bylaws establish authorised capital, while subscribed and paid-in capital represents the portion actually committed and contributed by shareholders. Dominican law uses a par-value system rather than no-par-value shares.

Share capital may be increased by companies through additional issuances within the authorised amount or, where necessary, an amendment to increase the authorised capital to allow the paid-in capital to increase accordingly. Increases must be subject to applicable corporate approvals and registrations. Likewise, capital reductions and amendments require corporate approvals and registrations, which differ depending on company bylaws and type. Contributions may be made by shareholders in cash or in kind, and in such cases, certain in-kind contributions require independent valuation and the filing of a particular report in conjunction with the appropriate corporate documentation for filing.

SAs and SASs may establish different classes or series of shares with different voting, dividend, liquidation, conversion, redemption and transfer rights. The SAS offers particularly broad flexibility for investor arrangements. Class rights, pre-emptive rights and sector-specific restrictions should be considered when establishing or subsequently modifying the capital structure.

Distributions

Dividends must generally derive from available profits reflected in the company’s financial statements and as approved by the shareholders at a general meeting. Distributions may not reduce shareholders’ equity below subscribed and paid-in capital plus legally or contractually non-distributable reserves. Certain companies must also allocate part of their annual profits to a statutory legal reserve.

The return of contributed capital are generally implemented through a formal capital reduction, subject to the required shareholder approvals and, where applicable, creditor-protection procedures.

Repurchases and Redemptions

An SA may acquire its own shares in the circumstances permitted by Law No 479-08. Repurchases may be carried out as part of a capital reduction or approved by an ordinary general assembly and funded from available profits or permitted reserves, provided they are not motivated by losses and are supported by adequate cash flow. Treasury shares are subject to statutory limitations and do not carry ordinary dividend or quorum rights while held by the company.

SRLs are generally prohibited from acquiring their own quotas, except in connection with certain capital reductions for cancellation.

Share redemption may be performed in SAs and SASs as a result of a capital reduction procedure. Likewise, in these types of entities, share capital may be reduced by decreasing the nominal value of each share, as approved by the shareholders. There is no statutory procedure for the redemption of shares in SRLs, although indirect redemption may be possible in specific circumstances.

The reduction of the share capital in an SA and SAS may be voluntary, on account of losses, as the result of a restructuring process or mandatory. A capital reduction becomes mandatory where losses reduce the company’s net equity below two-thirds of its authorised share capital and the company fails to restore its equity within the following financial year. In these cases, redemption may be chosen by the company as the preferred form of reduction.

For ordinary private companies, there is no broad standalone financial-assistance prohibition, although general corporate-interest, conflict-of-interest and creditor-protection rules remain applicable. Listed companies are subject to additional restrictions under securities legislation.

Dominican law does not apply a single common-law-style solvency test. Creditor protection is instead achieved through capital-maintenance requirements, restrictions on the source of repurchase funds, cash-flow requirements and creditor rights in capital reductions.

Private Dominican companies are subject to ultimate beneficial ownership reporting.

This means that companies must identify and report to the DGII all natural persons who ultimately own or control them. This generally includes individuals who hold, either directly or indirectly, at least 20% of the entity and/or those exercising effective control through other means. Where no such individual can be identified, the general rule is to identify the individual occupying the highest managerial position in the company as the ultimate beneficial owner.

Beneficial ownership information is reported through the RNC and the annual tax compliance process and must be updated when relevant changes occur. Additional ownership or change-of-control notification and approval requirements may apply in regulated sectors.

Likewise, companies are subject to reporting those who, under applicable legislation, are jointly liable for tax obligations. This reporting procedure is carried out with the DGII, and companies must designate the jointly liable person through a general meeting or equivalent corporate body, on the understanding that the tax administration may appoint such persons if the company fails to do so.

In the Dominican Republic, the main corporate governance provisions are set out in Law No 479-08 on Commercial Companies and Individual Limited Liability Enterprises, as amended, which establishes the governance and management bodies for the various legal corporate structures recognised in the Dominican Republic.

The Law provides that the General Shareholders’ Meeting is the supreme governing body of the company and the management of corporate business is entrusted to the managers or directors. It also establishes oversight bodies such as the Audit Committee, Statutory Auditor, and Supervisory Board, depending on the specific legal form of the entity.

On the other hand, in the financial sector, Monetary and Financial Law No 183-02, which governs the banking system, serves as the foundation for the Corporate Governance Regulations for Financial Intermediation Entities issued by the Monetary Board. These regulations require clear committee structures, internal controls, fit and proper assessments for Senior Management, and conflict-of-interest management.

Furthermore, Securities Market Law No 249-17 regulates the requirements for companies issuing public securities or trading on the Dominican Republic Stock Exchange (BVRD). It also mandates the strict adoption of good governance codes and the mandatory inclusion of independent directors to protect investors.

More recently, the enactment of Law No 155-17 against Money Laundering and the Financing of Terrorism, has directly impacted corporate governance by requiring boards of directors of Obligated Entities, which are designated as such because of their higher exposure to money laundering risks, to implement rigorous due diligence, transparency, and audit policies.

Directors or managers have the duty to act with loyalty and diligence as a “prudent businessperson.” In addition to these duties, there are the duties of accountability, fidelity, and confidentiality, which are established in the Law on Commercial Companies and Individual Limited Liability Companies.

The duty of loyalty implies that the director must refrain from any situation that could give rise to a conflict of interest with the company, avoiding taking advantage of their position to benefit from business opportunities presented to the company that come to their knowledge by reason of their position. Like the previous duty, loyalty entails the obligation of the director to report or communicate any situation of direct or indirect conflict of interest with the company.

The duty of diligence imposes on directors the obligation to perform their duties with dedication and attention through effective, rather than passive, participation in the management bodies. It likewise presupposes that directors have the necessary knowledge or information regarding the affairs affecting the company in order to adopt appropriate measures or corrective actions in a timely manner.

The duty of accountability is exercised by submitting the annual management report for the preceding fiscal year to the Shareholders’ Meeting. Additionally, the manager must guarantee the quality of the financial information contained in the financial statements and the management report, as well as that of the financial information that serves as the basis for preparing the financial statements and is provided to government entities, shareholders, or third parties.

The Companies Law implicitly contains the duty of confidentiality or secrecy incumbent upon directors, as the legislature establishes that directors are obligated to maintain confidentiality regarding company business and corporate information to which they have access by reason of their position and which has not been officially disclosed by the company, except upon the request of a competent public or judicial authority.

For its part, the duty of fidelity connects the director to the defence of the corporate interest through effective protection, above and apart from their own interests or those of third parties.

In this regard, the Tenth Chamber of the Civil and Commercial Court of First Instance of the National District, Specialized in Commercial Matters, established that the director was obligated to act with loyalty, diligence, and transparency, providing clear, truthful, and timely information to the shareholders, thus guaranteeing their right to information regarding the actual situation of the companies. The court concluded that the director had indeed committed the reported omission because she had gone four years without submitting the corresponding management report, which must be presented annually. In the same vein, the court established that, given the irrefutable, sufficient, and consistent evidence that the director had carried out management acts contrary to the corporate interest, characterised by conflicts of interest, the use of corporate funds without supporting documentation or prior authorisation, and the omission of the duty to render accounts, it had legitimate grounds to order her removal.

A directors are required to act as a “prudent businessperson” ‒ that is, exercising the level of care, prudence, diligence, and loyalty that a reasonable and professional person would apply in managing their own business affairs. If they failing to do so, they may be sanctioned, removed, or held personally liable with their own assets for any damage caused.

Directors shall be liable, individually or joint and severally, as the case may be, to the company or to third parties, for violations of legal or regulatory provisions applicable to companies; for breaches of the bylaws, their duties, and obligations; and for misconduct or negligence committed in their management.

In the Dominican Republic, the legal and regulatory framework governing the composition of management bodies clearly distinguishes between private companies, regulated by Law No 479-08 on Commercial Companies and Individual Limited Liability Enterprises, as amended, and companies listed on the stock market, regulated by Law No 249-17 on the Securities Market and the regulations issued by the Superintendency of the Securities Market (SIMV).

Neither Law No 479-08 nor Law No 249-17 imposes nationality or residence restrictions on managers or directors. The entire board of directors may be composed of non-resident foreigners. However, in practice, it is recommended to have at least one local resident director or legal representative to streamline administrative procedures, judicial notifications, and the execution of documents before local institutions.

Regarding independence standards, Law No 479-08 does not require the presence of independent directors in private companies. Instead, internal management oversight in a corporation is exercised through the mandatory appointment of a statutory auditor, which is optional in limited liability companies, whereas in limited partnerships by shares, management is supervised by a Supervisory Board. In contrast, Law No 249-17 and the regulations of the SIMV require the inclusion of independent directors, who must not have significant financial, employment, commercial, or family ties with the company, key executives, or majority shareholders. These directors must actively participate in the Audit Committee and the Risk and Nomination Committee.

In the Dominican Republic, there are no legal quotas or mandatory requirements regarding gender, age, or background diversity in the composition of boards of directors; nevertheless, the SIMV and regional corporate governance guidelines promote diversity of skills, professional experience, background and gender.

There is no unified “General ESG Law” that establishes unified obligations for the private sector. Since there is no legal provision that obligates the board to subordinate shareholder interests to environmental or social causes, directors must consider ESG factors to the extent that environmental or labour non-compliance generates legal, financial, operational, or reputational risks that compromise the company’s assets or expose the director to personal liability.

In that regard, the General Law on the Environment and Natural Resources (No 64-00) requires environmental impact assessments, licences, and prior authorisations for projects with an environmental impact, while also imposing civil, administrative, and criminal liability for environmental damage.

Likewise, the Law on Integral Management and Co-processing of Solid Waste (No 225-20) establishes extended producer responsibility and a regime for industrial waste management.

For its part, the SIMV has issued guidelines and resolutions to promote good corporate governance and the issuance of green, social, and sustainable securities.

The adoption of international frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) or the International Sustainability Standards Board (ISSB) standards (IFRS S1 and S2) is not universally mandatory by law for private companies; however, financial entities and listed issuers are incorporating these standards voluntarily or due to pressure from multilateral and international investors.

The Companies Law regulates and imposes limits on transactions conducted between directors and partners/shareholders, or between directors and the company, which could place the director in a conflict between their own interests and those of the managed company. In that regard, directors are prohibited from carrying out the following transactions without the prior authorisation of the General Shareholders’ Meeting:

• borrowing money or assets from the company;
• using company assets, services, or credit for their own benefit or for the benefit of relatives, represented parties, or affiliated companies;
• using, for their own benefit or that of related third parties, corporate business opportunities of which they became aware by reason of their position, provided that such use is detrimental to the company;
• proposing amendments to the corporate bylaws, agreeing on the issuance of securities, or adopting policies or decisions aimed at serving their own interests or those of related third parties rather than the corporate interest;
• preventing or obstructing investigations intended to establish their own liability or that of executives involved in the management of the company;
• inducing managers, executives, employees, or statutory auditors/external auditors to submit irregular accounts, present false information, or conceal information;
• presenting irregular accounts, providing false information, or concealing essential information from the shareholders;
• engaging in acts that are illegal or contrary to the corporate bylaws or the corporate interest, or using their position to obtain undue advantages for their benefit or for related third parties, to the detriment of the corporate interest; and
• engaging, on their own account or on behalf of third parties, in activities in competition with the company, unless expressly authorised by the General Shareholders’ Meeting.

The above prohibitions are subject to the penalty of nullity of the relevant transaction or operation. Any benefits or profits obtained by directors from transactions carried out without the authorisation of the General Shareholders’ Meeting shall accrue to the benefit of the company, without prejudice to the corresponding claim for damages.

Shareholder Rights

According to Law No 479-08 on Commercial Companies and Individual Limited Liability Enterprises and its amendments, shareholders have the following main rights.

• Voting: by general rule, shareholders have the right to attend and vote at general and special shareholders’ meetings. Each share carries one vote, except at the constitutional assembly, where votes are assigned according to the percentage of ownership and in total do not exceed ten. Votes can be expressed by physically signing the list of shareholders and the assembly, or by any electronic or digital means allowed by the law on electronic commerce.
• Access to information: regardless of their participation percentage, shareholders have the right to access the documents relating to the matters on the agenda of the meetings, at least 15 days preceding the celebration. In the particular case of annual ordinary meetings, shareholders may obtain:
1. the audited financial statements;
2. the management reports from the Board of Directors and the statutory auditor;
3. the draft resolutions to be submitted to the meeting by the person convening it; and
4. the exact total amount of remuneration paid to directors during the previous year, certified by the statutory auditors. 

At any time, any shareholder shall also have the right to obtain, at the registered office, access to the documents and information concerning the last three financial years, as well as the minutes and attendance lists of the meetings corresponding to those periods. If shareholders represent at least 5% of the company’s capital, they shall have the right to be apprised at any time of the company’s financial condition and accounts, upon prior written request in this sense.

• Approval of fundamental changes: fundamental changes are generally reserved to the extraordinary general meeting. Unless the Bylaws establish a higher quorum, according to Law No 479-08, the statutory quorum is more than 50% of subscribed and paid-in shares on first call, and one-third on second call. Fundamental changes include:
1. amendments to the bylaws;
2. capital share modifications;
3. transformation, merger or demerger of the company;
4. dissolution of the company;
5. disposition of the company’s entire fixed assets or liabilities;
6. securities offering; and
7. limitations on pre-emptive rights.
• To approve the increase of the obligations of the shareholders, their unanimous approval is required.

Statutory Remedies

When it comes to statutory remedies available to shareholders to enforce their rights within the company, the Law provides ut singuli actions (in representation of the company) and individual or direct actions (in the shareholders´ own name):

• Ut singuli actions: shareholders representing at least one-twentieth (1/20) of the subscribed and paid-up share capital may, individually or as a group, initiate a corporate liability action against the directors, to pursue or defend the corporate action against the directors. In this case, the plaintiffs shall be entitled to seek redress for the full extent of the loss suffered by the company, to which any compensation awarded shall be paid.
• Direct actions: any shareholder may file individually, regardless of the percentage held (even a single share), as they are asserting a right of their own. In this case, the plaintiffs shall be entitled to seek redress for the full extent of the loss suffered personally.

In the case of denial of access to information, a shareholder who has been denied access to the documents and information established by the Law may additionally request the judge in summary proceedings to order its disclosure, without prejudice to any daily penalty payment that may be imposed for each day of delay in complying with such request.

Liability actions against administrators shall be time-barred after three years, calculated from the commission of the harmful act or, if such act has been concealed, from its discovery. However, for acts classified as serious crimes, the action shall be greater according to the Code of Criminal Procedure.

Shareholder agreements are valid and recognised by the law provided they do not contravene rules of public policy, mandatory provisions of the bylaws, or the corporate interest of the company. They are normally intended to regulate, among the parties and for a certain time, matters related to the control and conduct of the company’s business, the rules for the purchase and sale of shares, the exercise of pre-emptive or preferential rights, collective voting, capital structure, and any other legitimate interest the shareholders may have.

Shareholder disputes concerning corporate matters are normally resolved according to the rules provided in the Bylaws of the Company, which generally include an arbitration clause. Without prejudice to the foregoing, Law No 479-08, along with the rules of civil and commercial procedure, offers a means of pursuing claims through ordinary judicial proceedings before the competent commercial courts, including direct or collective actions, annulment of corporate resolutions or winding-up petitions.

In the case of partnership disputes, it is common practice to include an arbitration clause in partnership agreements, with different stages including conciliation or mediation as measures preceding arbitration, with such clauses being binding on the shareholders that signed or adhered to the agreement.

The principal statute governing private mergers and acquisitions in the Dominican Republic is Law No 479-08 on Commercial Companies and Individual Limited Liability Enterprises. On the other hand, public companies and securities transactions that include tender offers are governed by Law No 249-17 on the Securities Market.

Private M&A

A private M&A operation can generally be structured under the following schemes:

• a share acquisition, under which the buyer acquires the equity of the target;
• an asset acquisition;
• a statutory merger; or
• a demerger. 

A combination of these structures could be used as well.

Mergers are defined by Law No 479-08, and the process requires a merger project agreement and the holding of an extraordinary general meeting to approve the process. At least one of the companies will be dissolved without liquidating its assets, through the universal transfer of its assets and liabilities to the company or companies absorbing the business. 

Public M&A

Law No 249-17 recognises both voluntary and mandatory public acquisition offers (OPA), as well as mergers. The SIMV is the regulatory and supervisory body responsible for authorising, monitoring, and regulating public offering processes within the Dominican securities market.

The capital markets in the Dominican Republic are governed by Law No 249-17 on the Securities Market, as amended, alongside the general regulations issued by the Executive Branch and regulatory circulars promulgated by the supervisory authorities.

The primary regulatory bodies that regulate the capital markets are as follows.

• SIMV: the primary regulatory and supervisory authority responsible for overseeing, inspecting, and regulating all market participants, public offerings, stock exchanges, central securities depositories, and investment fund managers.
• The National Securities Council: the highest body of the Superintendency, with functions that are essentially regulatory, supervisory, and controlling in nature.
• The Central Bank of the Dominican Republic: regulates monetary policy, foreign exchange, and liquidity, interacting directly with capital markets through the issuance and clearance of central bank securities.

The primary requirements are as follows.

• Market registration: the entity must apply for its registration and the registration of its securities in the Securities Market Registry administered by the SIMV.
• Corporate governance: the entity must maintain a transparent organisational structure, an active board of directors, clear policies, and the formal holding of shareholder meetings.
• Financial audits and tax standing: the entity must submit recent audited financial statements and demonstrate that the company is up to date with its tax obligations with the DGII.
• Prospectus requirement: the offering prospectus is the written public document for any public offering, containing the specific characteristics of the securities being offered, as well as general relevant data and information regarding the issuer and the parties involved in the public offering process.
• Credit rating: for debt securities and structured products, issuers must obtain at least one independent credit rating from a rating agency registered with the SIMV.

The SIMV review process for a public offering typically takes between three to six months, depending on the complexity of the structure and the completeness of the initial filing.

Under Law No 249-17 on the Securities Market and regulatory circulars issued by the SIMV, entities with securities listed in the Securities Market Registry and traded on the BVRD are subject to strict ongoing reporting and disclosure obligations.

These obligations are designed to maintain market transparency, protect investors, and prevent insider trading. Listed entities must regularly submit and publish standardised financial and operational information to both the SIMV and the public, including quarterly financial statements, annual audited financial statements and corporate governance and compliance reports.

A material event is defined under Law No 249-17 as any act, fact, decision, or situation ‒ whether financial, legal, operational, or corporate ‒ that is capable of significantly influencing the price, liquidity, or trading volume of a listed security, or affecting a reasonable investor’s decision to buy, hold, or sell that security.

The issuer is legally obligated to report the material event to the SIMV and the BVRD immediately upon its occurrence or becoming aware of it, often within strict statutory timeframes, usually not exceeding one business day or on the same day before the market opens.

In exceptional cases, an issuer may request temporary confidential treatment from the SIMV for a pending negotiation or event if public disclosure would compromise the company’s legitimate interests. However, this exception is strictly conditioned upon maintaining total secrecy; if any information leaks, the issuer must disclose the material event immediately.

Law No 249-17is the main regulatory framework for market abuse and insider trading in the securities-market regime.

Members of the board of directors, key executives of market participants and their employees, as well as persons linked to them by virtue of their office, employment, or position, are presumed to have access to inside information, unless proven otherwise. These persons, regarding the offeror or the target company, may not acquire or sell securities of any kind issued by the target company, its parent company, or an affiliate, from the moment action is initiated to study, plan, or decide upon a public tender offer for shares until the conclusion of that process.

Persons who do not comply with the above shall be liable to return to the parties directly harmed any profit, gain, commission, or advantage obtained from the transaction, without prejudice to any administrative, civil, or criminal liabilities that may arise.

The SIMV is the principal securities-market regulator and administrative enforcement authority. It is empowered to impose administrative sanctions directly on natural or legal persons ‒ whether or not subject to its regulation ‒ for the commission of an infringement established by law.

Substantial Shareholdings and Changes

In the case of companies that are not listed on the stock market, for SAs, the general rule is the freedom of transfer of shares unless the bylaws or a shareholder agreement includes prohibition or limitation of transferability. In the case of an SRL, the general rule is that ownership interests held through quotas are considered intuitu personae, and every transfer to third parties must be approved in advance by the other members of the company.

In general, for all types of companies, ownership information is public, as all shares and quotas are nominative. Changes of the composition of the company must be approved at a shareholders’ meeting or recorded in the minutes of such meeting  and registered before the corresponding Chamber of Commerce, including the modification of the Mercantile Registry, which makes the transaction enforceable against third parties.

In the case of listed companies, additional reporting is required to investors, and to the SIMV.

Tax and Transparency Regulations (Anti-Money Laundering)

Under Law No 155-17 on Anti-Money Laundering and the Financing of Terrorism, all commercial entities must identify and report the ultimate beneficial owner, defined as the natural person or persons who directly or indirectly own or control 20% or more of the share capital. This reporting process is executed at the incorporation of a company and whenever there is a change in share ownership. The information must be reported to the DGII by updating the RNC.

Non-compliance with the reporting obligations constitutes a breach of formal duties under the Tax Code and is subject to fines and may result in a declaration of joint and several liability for the members of the board and the company’s administrators.

Securities intermediaries are required to implement an Anti-Money Laundering, Countering the Financing of Terrorism, and Countering the Proliferation of Weapons of Mass Destruction (AML/CFT/PWMD) Prevention Program, which must include:

• policies and procedures to assess and mitigate AML/CFT/PWMD risks;
• employee selection and training criteria;
• a code of ethics and good conduct;
• a disciplinary sanctions framework;
• internal and external whistleblowing channels;
• the designation of a qualified management-level compliance officer responsible for overseeing strict adherence to the compliance program and serving as liaison with the Financial Analysis Unit and the SIMV, with temporary absences governed by Article 17 of these Regulations (regarding the  appointment of deputies); and
• customer due diligence policies for clients and business associates, alongside a comprehensive risk management framework, as detailed below.

Additionally, entities must maintain an independent Board of Directors in accordance with applicable legislation.

The SIMV maintains an open channel for receiving complaints and reports, which may be submitted online by completing the designated form. Any person may file a complaint ‒ and may elect to withhold their identity ‒ regarding any act or practice deemed contrary to applicable regulatory provisions that affects or may affect the complainant, other citizens, or investors, requesting the corresponding investigation and corrective measures.

Complaints are evaluated by the Superintendency, which, upon completion of the appropriate administrative process, may proceed with conducting investigations, imposing administrative sanctions, and requiring corrective actions.

For risk management purposes, applicable regulations require securities intermediaries to adopt an organisational structure that clearly defines the obligations, duties, and responsibilities of each governing body, as well as the reporting lines and interrelationships among the areas involved in risk management.

The Board of Directors bears ultimate responsibility for risk management, and its functions include defining and approving the risk management strategy and policies of the securities intermediary, as well as ensuring the provision of the necessary resources for their proper implementation, among other duties.

The Risk Committee, the Risk Management Unit, and Senior Management are responsible for clearly and explicitly communicating internally the strategy, policies, and procedures set forth in the Risk Management Policy Manual, thereby promoting a corporate risk management culture aimed at creating awareness and engaging all personnel in the implementation of this management framework.

Additionally, the internal organisation shall comprise specific units designed to ensure proper operational execution under the principle of functional segregation, including: the Risk Unit, Treasury and Sales/Business Units, the Operations Unit, and the Financial Controller/Internal Control Unit.

Furthermore, the Securities Intermediary must implement a comprehensive set of strategies, policies, methodologies, procedures, information systems, and tools through which the entity manages its risks in alignment with its risk appetite, thereby providing reasonable assurance regarding the achievement of its objectives.

Regulatory Framework

The principal laws and regulations governing secured transactions include the following:

• the Dominican Civil Code;
• Law No 108-05 on Real Estate Registry, for the registration of mortgages and liens over real estate property, including land, buildings, apartments and other registrable properties; and
• Law No 45-20 on Movable Collateral, which establishes an electronic system for the registration of pledges over movable assets, including: specific items of movable property, generic categories of assets, real rights over movable property, contractual rights, and present or future assets – whether determined or determinable, tangible or intangible ‒ or the entirety of the debtor-guarantor’s movable property.

Perfecting and Enforcing Security Interests

In the case of real estate properties, mortgages and liens are registered with the corresponding Title Registry office (Registro de Títulos). Based on the Torrens System, the Dominican model requires registration to constitute rights over the property. The system provides public faith in the registry, making registered rights enforceable against third parties.

On the other hand, in the case of movable assets, perfection of the security interests is also required to make the rights enforceable against third parties and to establish priority. While there is a traditional process to register pledges over moveable assets before the court, in recent years, with the approval of Law No 45-20, there is an electronic system to register the pledges through the Electronic System of Movable Warranties (Sistema Electrónico de Garantías Mobiliarias). In the particular case of vehicles, there is a special procedure before the National Directorate of Internal Taxes that registers an opposition over the registration certificate. In the case of shares, it is possible, but not mandatory, to notify the Mercantile Registrar at the relevant Chamber of Commerce, enabling the inclusion of an annotation in the company’s certificate relating to the shares that have been issued.

Typical Structures in Financing

The Dominican market is very active in structuring complex and diversified financing for acquisition projects, including both local and international players in some cases, and involving Dominican collateral governed and registered under the local jurisdiction.

It is very common to include a combination of securities for large-scale financing, affecting both real estate mortgages and securities over movable assets, including inventory, machinery and equipment, licences and permits and IP rights.

Dominican commercial contracts are principally governed by the Dominican Civil Code and supplemented by the Commercial Code and applicable special legislation. As per statutory principles, any and all validly concluded agreements have the force of law between the parties and must be performed in good faith.

In general, a valid contract under the Dominican Civil Code requires:

• consent;
• capacity;
• a certain object; and
• a lawful cause.

Dominican law does not require “consideration” as a separate common-law concept. Contracts are formed by consent unless a particular transaction requires a written instrument, notarisation, registration or another statutory formality required by the Civil Code or other application regulations. However, written proof is regarded by the Dominican Civil Code as the preferred form of evidence over other types of evidence, and the law requires that agreements involving sums of money being transferred must be made in writing. Oral or witness evidence is not admissible to prove matters beyond those contained in the written agreement.

As such, it is common practice for commercial contracts and agreements in general to be made in writing by the parties, particularly where one party intends to enforce particular conditions during the relationship.

Electronic contracts and qualifying digital signatures are recognised under Law No 126-02, although their use is not yet widely accepted among competent authorities. Therefore, wet ink is generally still used in a large portion of agreements.

Contract validity may be questioned if an essential requirement is absent or if consent is affected by error, fraud or duress, or if the object or cause is unlawful, in which case the entire operation is deemed null from the start under the statutory principles of the Dominican Civil Code.

For interpretation and application purposes, Dominican courts interpret agreements primarily by seeking the parties’ common intention and their objectives rather than relying exclusively on the literal wording, particularly in cases of long-held relationships where certain conditions and motives may have been altered by the parties throughout the relationship’s duration.

Commercial parties generally have substantial freedom to allocate risk, including through liability limitations and penalty clauses, subject to mandatory law, public policy and good faith. Dominican law does not recognise a standalone commercial doctrine of unconscionability, although abusive conduct may be addressed through other general or sector-specific legal principles.

The main remedies for contractual breach are claims for specific performance, termination and damages. In bilateral contracts, under the Dominican Civil Code, the non-defaulting party may generally seek performance where possible or desirable; or termination for breach of obligations, together with damages arising from the breach, where appropriate. In such cases, general statutory requirements dictate that, unless otherwise agreed by the parties, the non-defaulting party must request the specific performance or termination and damages through judicial proceedings, and said termination must be declared by the courts before the relationship can be considered legally terminated.

As such, commercial contracts frequently establish termination events, cure periods and termination procedures in order to ensure that statutory requirements do not cause unnecessary delays in the termination or in allowing breaches to be remedied, where applicable. A party terminating an agreement without a valid basis, whether contractual or statutory, may itself be liable for breach and for any resulting damages from the termination.

Dominican law recognises force majeure in cases where an unforeseeable event beyond the debtor’s control prevents the performance of their obligations under the agreement. Depending on the circumstances and the nature of the obligation, this may excuse liability and suspend or extinguish the affected obligation.

There is no separate general doctrine directly equivalent to common-law frustration of purpose, nor a broad statutory hardship doctrine automatically allowing renegotiation where performance has become substantially more difficult for the parties. Parties therefore commonly address force majeure, hardship, price adjustment and material changes in circumstances expressly in their contracts.

Industrial property is principally governed by Law No 20-00, while copyright is governed by Law No 65-00.

Patents, trade marks and other industrial property rights may generally be assigned or licensed, with registration with ONAPI being important for enforceability against third parties, as publicity through registration is a statutory requirement for the holding of these rights. Copyright economic rights may also be transferred or licensed, while moral rights receive separate statutory protection.

Ownership of IP created within a commercial relationship depends on the type of right and the contractual arrangement between the parties. In cases of patentable inventions created during the performance of an agreement, the rights to the IP belong to the employer or the person who commissioned the work, in accordance with statutory rules. If the value of the patent exceeds the value estimated by the parties at the time of the agreement’s conclusion, the inventor is entitled to special remuneration as established by the applicable courts, unless otherwise agreed upon by the parties. Where an employer is not bound to engage in inventive activity, the employee must notify the employer of the invention, and the employer must, in turn, notify the employee of their interest in it, after which the rights will belong to the employer. Statutory requirements state that any contractual agreements that are less favourable than applicable statutes will be considered null and void.

Copyright requires particular care because economic rights created by employees or commissioned authors should be expressly addressed in the contract, rather than assuming automatic ownership by the employer/owner of the commission, given that statutory requirements state that the author is the owner of the IP created and that there is no particular legislation governing copyright in the context of employment relationships.

Joint-development agreements should therefore allocate ownership of background and newly developed IP, filing and enforcement rights, confidentiality and licensing rights.

Regarding AI-generated work, Dominican legislation does not yet provide a comprehensive specific regime for AI-generated works, making contractual allocation particularly important in these cases.

Remedies for infringement in IP matters include injunctions or cessation orders, claims for damages, seizure or destruction of infringing goods and conservatory measures. Administrative, customs and, for certain infringements, criminal remedies may also be available.

The main consumer protection statute in the Dominican Republic is Law No 358-05, administered by the National Institute for the Protection of Consumer Rights (Pro Consumidor). Its protections are mandatory for all consumer relationships in the country and therefore limit contractual freedom in business-to-consumer relationships.

In general, Law No 358-05 states that suppliers must provide clear and truthful information regarding goods, services, prices, and material conditions to consumers as part of their main disclosure obligations. Particular rules also apply to contracts of adhesion, which are subject to statutory form, fairness requirements, and registration with Pro Consumidor, which reviews adhesion agreements and verifies the absence of abusive contractual clauses. Abusive clauses may be ineffective, and consumer contracts are generally interpreted in favour of consumers where ambiguity exists.

Dominican law does not establish a universal cooling-off period for every consumer transaction; withdrawal or cancellation rights depend on the transaction and applicable legislation. Rules against misleading advertising and unfair commercial practices apply, while e-commerce is additionally supported by Law No 126-02 on Electronic Commerce, Documents and Digital Signatures.

Regarding enforcement mechanisms, Pro Consumidor is the government institution tasked with the protection of consumer interests and rights and therefore has the authority to investigate complaints, inspect businesses, monitor advertising, promote conciliation, confiscate and destroy products and printed materials, impose administrative sanctions prescribed by law and classified according to their severity, and close down businesses that fail to comply with applicable authorisation and registration requirements.

Consumers may initiate an administrative complaint procedure before Pro Consumidor, which may result in an investigation and the imposition of sanctions and other measures. Consumers may also pursue judicial remedies through ordinary courts, including termination, restitution, damages and the non-enforcement of abusive clauses.

Competition Law in M&A structures

Law No 42-08 of the General Law for the Defense of Competition does not include mandatory merger notification or approval prior to their execution. The Law regulates anti-competitive agreements, abuse of dominant position, and other restrictive practices that may affect the market of a determined sector.

Special Regimes Governing M&A

There are no specific provisions regulating, prohibiting, or restricting M&A under Law No 479-08. Nevertheless, specific sectors and industries have special laws that establish prior authorisation or notification certain governmental entities, including:

• General Electricity Law No 125-01, which empowers the Superintendency of Electricity to authorise M&A for electric companies.
• General Telecommunications Law No 153-98, which requires telecommunication providers to obtain authorisation from INDOTEL for the transfer, use or ownership of concessions and licences granted for their operations.
• Financial Monetary Law No 183-02, which requires the prior authorisation of the Monetary Board for mergers, absorptions, and spin-offs involving financial entities.
• Insurance and Surety Law No 146-02, which requires companies to apply for authorisation from the Superindendency of Insurance before any transfer or acquisition of shares, as well as before any mergers.
• Securities Law No 19-00, as amended by Law No 249-17, under which the National Council of the Stock Market must be informed of and approve any process related to a merger or change of control involving participants in the securities market. In the case of investment funds, the SIMV must approve the process.

The primary legislation governing foreign direct investment (FDI) in the country is Law No 16-95 on Foreign Investment. In line with the Constitution of the Dominican Republic, it guarantees national treatment, ensuring that foreign investors share identical constitutional rights, obligations, and legal protections as local citizens. No prior governmental authorisation is required to establish or structure foreign investment.

Prohibitions and Restrictions on Foreign Investment

Law No 16-95 prohibits foreign investment in matters related to the disposal and storage of toxic, hazardous, or radioactive waste that is not generated within national borders. Industrial operations that directly threaten public health or disrupt environmental balance are also restricted. 

Regarding limitations to foreign investment, there are specific legal regimes for sensitive or state-monopolised asset classes that have equity caps or require rigorous operational authorisations from the relevant regulatory bodies, including: mining, aviation and maritime activities, telecommunications, insurance and financial services. 

Incentives for Foreign Investments 

The Dominican laws provide several statutory incentive programmes to attract foreign capital. The most relevant include:

• Tourism Development (CONFOTOUR, Law No 158-01, as amended): provides a 15-year tax exemption for eligible tourism infrastructure, including income, share capital increase tax and assets tax, as well as exemptions on customs duties, VAT, property transfer tax and other taxes related to the construction of the infrastructure and first furnishing of the premises.
• Free Trade Zones (Law No 8-90): offers exemptions lasting 15 to 20 years from corporate income tax, customs duties, and VAT.
• Border Development (Law No 12-21): extends tax exemptions for up to 20 years for operations near the Haitian border.
• Renewable Energy (Law No 57-07): grants import duty and VAT exemptions on equipment, alongside reduced withholding taxes on foreign loans.

Recent Policy Changes

In the past, companies in the Dominican Republic could face administrative fines or civil lawsuits, but criminal liability was limited to individuals. However, under Law No 74-25, which establishes the new penal code, legal entities can now be held directly and criminally liable for offences committed on their behalf, in their interest, or for their benefit. This change has impacted both Dominican and foreign-owned companies, which are currently reviewing and adapting their compliance programmes.

In the Dominican Republic, the protection of personal data is regulated by Law No 172-13 on the Protection of Personal Data Stored in Files, Public Registries, Data Banks or Other Technical Data Processing Means Intended for Providing Reports, Whether Public or Private.

This law requires operators of private data files to obtain the consent of the data subject to collect and process their personal data, subject to specific statutory exceptions.

In all cases, the data subject must be informed of the rights they hold in relation to their archived and managed personal information, such as the exercise of the rights to access, rectification, cancellation, and opposition.

Dominican legislation does not provide for an independent supervisory authority exclusively dedicated to general data protection (a role that, within the financial/credit sector, falls under the Superintendence of Banks). Therefore, international data transfers are governed by Article 44 of the Dominican Constitution and Law No 172-13 on the Protection of Personal Data, as well as sector-specific regulations issued by bodies such as the Superintendence of Banks.

As a general rule, the international transfer of personal data requires the prior, informed, and express consent of the data subject. Explicit consent is not required when the transfer is strictly necessary for the execution of a contract between the data subject and the data controller, or for reasons of judicial co-operation and public interest.

Regarding data localisation, national legislation does not impose a mandatory requirement to host commercial data on local servers. Companies may utilise foreign cloud infrastructure, provided they guarantee the security measures required by Law No 172-13. Conversely, financial institutions and credit information companies are subject to oversight by the Superintendence of Banks pursuant to the Monetary and Financial Law (No 183-02). These institutions must ensure that state regulators have unimpeded access to information and records, which frequently necessitates maintaining local mirrors or primary servers within the national territory.

Law No 155-17 on Money Laundering, the Financing of Terrorism and the Proliferation of Weapons of Mass Destruction provides for two types of obliged entities (financial and non-financial) that must comply with the main obligations imposed by the law, such as implementing a risk-based anti-money laundering and counter-terrorist financing programme, appointing a compliance officer, establishing KYC policies, training personnel, submitting suspicious transaction and cash transaction reports, and adopting a Code of Ethics, as well as data protection and anti-corruption policies in order to mitigate risks.

The Dominican Republic does not maintain an independent, unilateral economic sanctions regime. Instead, it enforces international sanctions primarily mandated by the United Nations Security Council (UNSC), implemented into domestic law through Law No 155-17 on Money Laundering and the Financing of Terrorism and Law No 267-08 on Terrorism.

The Ministry of Foreign Affairs and the National Anti-Money Laundering Council enforce binding UNSC sanctions lists targeting sanctioned individuals, organisations, and states.

Failure to comply with sanctions, export controls, and AML/CFT obligations carries severe administrative, civil, and criminal penalties:

• Administrative fines: ranging from 100 to 400 minimum wages for AML compliance failures, alongside licence revocation or operational suspension.
• Customs penalties: seizure and forfeiture of goods, along with fines of up to twice the customs value of the merchandise for unauthorised exports or false declarations.
• Criminal Liability: individuals and legal entities involved in violating UN sanctions, terrorist financing or smuggling may face imprisonment of between 10 and 20 years under Law No 155-17 and Law No 267-08.

The primary legal framework governing environmental obligations in the Dominican Republic is General Law No 64-00 on Environment and Natural Resources, overseen by the Ministry of Environment and Natural Resources. This Law primarily affects commercial and real estate developments, energy projects, industrial facilities, and mining activities, which require an environmental licence or permit prior to construction or operation. Under Law 64-00, projects are categorised based on environmental risk, requiring an Environmental Impact Assessment, an Environmental Assessment, or an Environmental Management Plan.

The Dominican Republic does not currently have a mandatory national carbon tax or an emissions trading scheme. However, the country is a signatory to the Paris Agreement and has adopted Decree No 601-21, which established the National Climate Change Policy. Renewable energy projects benefit from tax incentives under Law No 57-07 on the Development of Renewable Energy Incentives.

Law 64-00 provides for administrative fines, operational suspensions, and criminal penalties for corporate officers and entities that cause severe environmental degradation or operate without valid permits. Environmental litigation brought by groups has increased significantly, particularly in relation to mining, infrastructure, and coastal tourism developments affecting protected zones or water resources.

Occupational health and safety is governed at the national level by the Labor Code (Law No 16-92), Law No 87-01 on the Social Security System, and specifically Regulation No 522-06 on Occupational Health and Safety. A single national regulatory framework applies across all provinces and municipalities, enforced uniformly by inspectors from the Ministry of Labor. Employers must establish a Risk Prevention Plan, provide free personal protective equipment, conduct required ergonomic and hazard assessments, train staff, and report workplace accidents to the Ministry of Labor and the Dominican Social Security Institute within 24 hours. Any workplace employing 15 or more workers is legally required to establish a Joint Health and Safety Committee.

General business operations in the Dominican Republic typically require the following.

• Registration with the Chamber of Commerce and the DGII.
• Municipal operating permits: municipal authorisation, issued by local city halls.
• Sanitary permits: issued by the Ministry of Public Health or the Directorate General of Medicines, Food and Sanitary Products (DIGEMAPS) for businesses dealing in food, cosmetics, pharmaceuticals, or chemical products.

Specialised regulatory frameworks heavily dictate M&A structures, change-of-control approvals, and closing timelines:

• Financial services and fintech: regulated by the Monetary and Financial Law (Law No 183-02) under the supervision of the Superintendence of Banks (SB) and the Monetary Board. Any transfer of shares representing a change of control or a significant stake in a bank or financial entity requires prior approval from the Monetary Board.
• Pharmaceuticals and healthcare: regulated under General Health Law No 42-01. Transferring ownership of pharmaceutical plants, distribution networks, or product sanitary registrations requires formal approval and re-issuance through DIGEMAPS.
• Medical and recreational cannabis: remain strictly illegal under Law No 50-88 on Drugs and Controlled Substances. Consequently, commercial operations or transactions involving cannabis products are prohibited in the jurisdiction.

The Dominican Republic does not currently have a law or dedicated regulatory authority specifically governing AI. Instead, the deployment and use of AI systems are regulated through a combination of constitutional provisions, digital governance strategy frameworks, and general legislation, as set out below.

• Article 44 of the Dominican Constitution (right to privacy and personal data protection) and Law No 172-13 on Comprehensive Personal Data Protection. Key principles such as prior consent, purpose limitation, and data subject rights apply directly to AI training sets and automated processing.
• Law No 53-07 on High Technology Crimes and Offences, which criminalises identity theft, unauthorised data access, system disruption, and electronic fraud.
• National AI Strategy: in August 2023, the Dominican government launched the National Artificial Intelligence Strategy (Estrategia Nacional de Inteligencia Artificial ‒ ENIA), overseen by the Executive Branch through the Government Office of Information and Communication Technologies (OGTIC). While ENIA is a strategic roadmap rather than a binding statute, it sets the framework for ethical AI adoption, public-sector integration, talent development, and governance principles.
• Public-sector governance: Resolution No OGTIC-GTI-001-2024 and general IT governance standards issued by OGTIC establish baseline guidelines for digital transformation and automated tools within state entities, emphasising security, interoperability, and ethical handling of citizen data.

Bills aimed at creating a formal framework for AI governance and ethical development are under discussion within the Dominican National Congress. Proposed initiatives seek to establish risk-based classification models, mandatory algorithmic auditing for high-risk applications, and a national registry for corporate AI systems used in public-facing services.

OGTIC, alongside sectoral regulators (such as the Superintendence of Banks for fintech-related AI models), is actively promoting regulatory sandboxes to test AI applications in controlled environments prior to full market deployment.

Law No 44-26 was recently passed, amending Law No 74-25, which establishes the new Criminal Code of the Dominican Republic. This law introduces a new regime of criminal liability for legal entities when, as a result of a breach of their duties of management, control, or supervision regarding their governing bodies, representatives, or subordinates, these individuals commit offences or violations of the law.

In that regard, to avoid incurring liability, legal entities ‒ regardless of their commercial activity ‒ are required to implement a Regulatory Compliance, Criminal Risk Prevention, and Corporate Governance Programme that is suitable for the company’s operations. This programme must protect the entity from criminal liability arising from the commission or omission of fraudulent acts, failure to comply with applicable regulations by its governing bodies, representatives, or subordinates, or breach of the duty of care. This legal provision will enter into force on 5 November 2026.

Legal System

Private employment relationships are mainly governed by Law No 16-92 (the “Labor Code”), which is complemented by several pieces of legislation, including the Constitution, social security legislation and regulations concerning occupational health and safety and other employment matters. The Labor Code establishes mandatory minimum rights in areas such as remuneration, working hours, leave, Christmas salary, mandatory profit-sharing, collective rights (unions) and termination procedures/rights.

Key Aspects of the Termination of Employment Agreements

For indefinite-term contracts, which are the default type of employment contract unless expressly agreed upon by the parties, the principal unilateral termination mechanisms are: (i) desahucio (termination without cause), (ii) despido (dismissal by the employer for statutory cause) and (iii) dimisión (termination by the employee for statutory cause).

• Desahucio (termination without cause): either party may terminate an indefinite employment contract. Consequences may vary depending on who executes the termination. An employer may generally terminate an indefinite employment contract without cause through desahucio, subject to statutory restrictions, by providing notice or payment in lieu of notice, together with the corresponding severance payment. Notice ranges from seven to 28 days depending on length of service, while severance is likewise calculated by reference to seniority according to a formula provided for in the Labor Code.
• Despido (dismissal by the employer): dismissal for cause requires that the employer allege one of the statutory grounds and notify both the employee and the labour authority within 48 hours, under penalty of invalidity. If the employer does not succeed in proving the alleged cause, the dismissal may be declared unjustified, in which case the employee is entitled to notice, severance and an amount equal to the salaries that would have accrued from the filing of the claim until the final judgment, capped at six months’ salary.
• Dimisión (termination by the employee for a just cause): this operates similarly to constructive dismissal, meaning an employee may terminate an agreement for serious breaches attributable to the employer. If the termination is deemed justified, the employer generally becomes liable for to the same compensation applicable to an unjustified dismissal: notice, severance and an amount equal to the salaries that would have accrued from the filing of the claim until the final judgment, capped at six months’ salary. If the dimisión is declared unjustified, the employee may be required to pay the employer an amount equivalent to the applicable notice period. Enhanced protections apply to certain employees, particularly during pregnancy, maternity-related periods and in specified trade-union contexts.

Executive compensation generally may include salary, bonuses, benefits, long-term incentives and equity awards, but employee arrangements remain subject to mandatory labour law. For these types of mixed compensation arrangements, particular attention should be paid to whether recurring or guaranteed payments constitute salary for the purposes of calculating employment benefits and termination payments, as well as to income-tax withholding and social security treatment.

Equity incentives are generally structured contractually and should address termination, transfer restrictions, tax treatment, and change-of-control consequences. Change-of-control arrangements may provide enhanced severance or bonuses, but employees cannot waive mandatory statutory employment rights through agreements with employers.

Post-employment restrictive agreements are assessed by courts in light of contractual freedom, legitimate business interests, and the constitutional freedom to work, which is considered highly important under labour law and for the overall welfare of workers. In that sense, non-competes are vulnerable to annulment by courts if excessive or unreasonable in duration, geographical scope or the activities they restrict, as they are seen as infringements of workers’ rights to work. Consequently, narrowly tailored non-compete provisions may be easier to defend in a court of law.

Confidentiality obligations are generally more readily enforceable and are reinforced by statutory trade-secret protection. Employers should, generally, favour targeted restrictions protecting confidential information and customer relationships over unnecessarily broad restraints on employment.

Dominican real estate property is held through registered ownership under the Torrens system, governed by Law No 108-05 on Real Estate Registration. Ownership and other registrable real rights are registered with the Title Registry responsible for the jurisdiction in which the real estate is located, as evidenced by a Certificate of Title. Dominican law also recognises several other rights and interests that may be included as part of the official documentation and the status of Certificates of Title, such as co-ownership, condominium ownership, usufruct, mortgages and leasehold interests.

Foreign individuals and foreign-owned entities may generally acquire, hold, and dispose of Dominican real estate property on substantially the same basis as Dominican persons, without a general residency or nationality requirement. However, the acquisition must comply with the local ordinary tax and Title Registry procedures, and sector-specific land-use, environmental or other restrictions may apply depending on the property.

Direct property transfers are generally subject to a 3% transfer tax, subject to exemptions and special regimes. No additional transfer tax generally applies solely because the purchaser is foreign or a non-resident of the Dominican Republic.

Acquisitions and Due Diligence

Commercial acquisitions of real estate may be structured as either direct asset purchases or acquisitions of the entity owning the property. Due diligence, in any case, should cover:

• the registered title;
• any mortgages and leans;
• cadastral status;
• corporate authority of the person executing the sale/purchase;
• zoning;
• licences;
• leases;
• taxes;
• litigation; and
• environmental matters.

Title insurance is not mandatory and is commonly used in real estate acquisitions.

Environmental matters are governed principally by Law No 64-00 and related regulations. Depending on the location and proposed use, environmental permits or authorisations may be required for the use of the land, and contractual allocation of environmental risk does not necessarily exclude statutory liability.

Mortgage Financing

Mortgages over registered property must be registered with the Title Registry to be effective against third parties as it grants public notice of the security interest. Priority of execution is principally determined by registration, making it essential to verify of existing mortgages, liens and other encumbrances central to lender due diligence prior to the awarding of any mortgage-backed financing agreements.

As such, upon default, secured creditors may enforce their mortgage through the procedures established by law, with the applicable route depending on the nature of the financing and the creditor.

Commercial Leasing

Law No 85-25 on Real Estate Leases and Evictions, enacted in 2025, now provides the principal statutory framework for commercial leases. Commercial lease terms remain substantially contractual, and parties should clearly regulate duration and renewal, rent adjustments (which are uncapped in commercial leases), permitted use, maintenance, assignment and subletting, defaults and termination.

Automatic renewal is assumed if neither party expresses its intention not to renew the agreement prior to its termination. Assignment and subletting should likewise be addressed expressly. Remedies for default include unpaid rent, damages, termination and eviction, subject to statutory procedures.

Recent Developments

Law No 85-25 represents the most significant recent change, replacing the former lease framework and modernising landlord-tenant and eviction rules. The Real Estate Registry has also continued its digitalisation and standardisation efforts, including electronic services and updated registration criteria intended to increase predictability and efficiency.