Quick Answer
Foreigners can legally own and operate businesses in the DR. The most common structure is the SRL (Sociedad de Responsabilidad Limitada), equivalent to an LLC. Formation takes 4 to 8 weeks and costs $500 to $1,500 in professional fees. You will need a bilingual lawyer. Tax registration, labor compliance, and a local accountant are non-negotiable from day one.
Can Foreigners Own a Business in the DR?
Yes. Dominican law allows foreigners to own 100% of a business in most sectors. There are no foreign ownership caps in the majority of industries. Tourism, retail, hospitality, services, and online businesses are all open to foreign ownership without a local partner requirement.
A few sectors have restrictions or special licensing requirements: media, certain natural resources, and some agricultural activities. For the typical expat business (restaurant, tour company, online business, boutique, rental property management), full foreign ownership is entirely straightforward.
Business Structures
SRL (Sociedad de Responsabilidad Limitada)
The most common structure for small and medium expat businesses. Equivalent to an LLC. Limits personal liability, minimum 2 shareholders required, minimum capital of RD$100,000 (about $1,700). Flexible management structure. Best choice for most expats.
SA (Sociedad Anónima)
The Dominican equivalent of a corporation. Required for larger companies or those with more than 20 shareholders. More complex and expensive to set up and maintain. Minimum capital of RD$30 million for publicly traded companies. Rarely needed for typical expat businesses.
Empresa Individual (Sole Proprietorship)
Simplest structure, one owner. No separate legal entity, meaning personal assets are exposed to business liabilities. Lower setup cost and less paperwork. Suitable only for very small, low-risk operations. Most lawyers will recommend an SRL instead.
Foreign Branch Office
If you already have a company registered abroad, you can register a branch in the DR. Requires legalised corporate documents from your home country and registration with the Registro Mercantil. More complex but can work for multi-country operations.
The Formation Process
Engage a bilingual lawyer
This is not optional. A Dominican lawyer drafts the company statutes (acta constitutiva), handles notarisation, and manages filings. Get referrals from expat business groups. Expect to pay $500 to $1,200 in legal fees for a standard SRL formation.
Reserve the company name
Name availability is checked and reserved through the Registro Mercantil. Your lawyer handles this. Have 2 to 3 name options ready as your first choice may already be taken.
Draft and notarise the statutes
Your lawyer drafts the company statutes detailing shareholders, share distribution, management structure, and company purpose. These are notarised by a Dominican notary public.
Register with the Registro Mercantil
The company is registered with the Santo Domingo or regional Chamber of Commerce (Cámara de Comercio). This creates the legal entity. Annual renewal is required to keep the company in good standing.
Register with the DGII (tax authority)
The Dirección General de Impuestos Internos (DGII) issues your RNC (Registro Nacional del Contribuyente), the equivalent of a tax ID number. Required for issuing invoices, hiring employees, and paying taxes. Your accountant handles ongoing DGII compliance.
Open a business bank account
A company bank account is required to operate. Major banks (Banco Popular, Banco Santa Cruz, BHD León) require the company statutes, RNC, and shareholder IDs. Some banks require proof of business address. The process takes 1 to 3 weeks.
Obtain sector-specific licences
Depending on your business type, additional permits apply. Restaurants need health permits from the Ministry of Health. Tourism businesses need MITUR registration. Retail businesses need a municipal licence. Your lawyer advises on which apply.
Formation and Running Costs
| Item | Estimated Cost | Notes |
|---|---|---|
| Lawyer fees (SRL formation) | $500 to $1,200 | One-time, shop around for quotes |
| Registro Mercantil registration | $150 to $400 | Depends on share capital declared |
| Annual Registro Mercantil renewal | $100 to $250 | Required every year |
| Accountant (monthly) | $150 to $400 | Essential for DGII compliance |
| ITBIS (VAT) returns | Filed monthly | 18% on taxable sales, via accountant |
| Corporate income tax | 27% of net profit | Annual filing with DGII |
| Sector licence (restaurant etc.) | $100 to $500 | Varies by municipality and type |
Business Taxes
Dominican businesses pay the following main taxes:
- Corporate income tax (ISR): 27% on net taxable profit. Filed annually with the DGII.
- ITBIS (VAT): 18% on most goods and services sold. Filed and paid monthly. Collected from customers and remitted to the DGII.
- Asset tax: 1% annually on company assets if no income tax is owed or if income tax is less than 1% of assets.
- Withholding taxes: Applied to certain payments to suppliers and contractors. Your accountant manages this.
The DGII is strict about filing deadlines and penalties accumulate quickly. A competent local accountant (contador) who knows Dominican tax law is essential, not optional. Monthly fees of $150 to $400 are far cheaper than the fines and stress of non-compliance. Get a recommendation from the expat business community rather than finding one cold.
Hiring Staff and Labor Law
Dominican labor law strongly protects employees. Understanding your obligations before you hire your first staff member is critical.
- Employment contracts: All employees must have written contracts registered with the Ministry of Labor (Ministerio de Trabajo).
- AFP (pension): Employers contribute 7.10% of salary to the employee's pension fund. Employees contribute 2.87%.
- SFS (health insurance): Employers contribute 7.09% of salary. Employees contribute 3.04%. Enrollment in the national health system is mandatory for all employees.
- Regalía Pascual (Christmas bonus): All employees are legally entitled to one month's salary as a Christmas bonus, paid in December. This is not optional.
- Severance (prestaciones laborales): Terminating an employee triggers legally mandated severance payments that increase with tenure. Firing incorrectly is expensive. Consult your lawyer before any termination.
- Vacation: 14 working days after the first year of employment. This is a legal minimum.
What Businesses Expats Commonly Open
Restaurants and cafes
One of the most common. Success depends heavily on location and local vs tourist clientele mix. Food service requires Health Ministry permits. High failure rate but strong success stories exist in expat areas.
Water sports and tours
Kite schools, surf lessons, dive shops, and tour operators in Cabarete, Las Terrenas, and Punta Cana. Requires MITUR registration and relevant safety certifications. Seasonal income variation to plan for.
Property rentals and management
Managing short-term rentals (Airbnb, VRBO) or long-term rentals for absent owners. Popular among expats who buy property. Lower overhead than physical businesses. Tax implications should be reviewed with an accountant.
Online and remote businesses
Freelancers and online business owners often register an SRL to invoice clients professionally and maintain legal residency justification. Requires the same tax compliance as any local business.
Wellness and fitness
Yoga studios, gyms, massage, and wellness services are popular in expat areas. Relatively low startup cost. Client base depends heavily on expat and tourist population size in your chosen location.
Retail and e-commerce
Boutiques, imported goods, and local craft retail. Import duties make some product categories uneconomical. Success often depends on finding a niche with local sourcing or services Dominicans and expats both want.
Verbal agreements, handshake deals, and informal business arrangements are common in the DR but leave you completely unprotected legally. Every business relationship involving money, property, or staff must be documented in writing. This applies to partnerships, supplier agreements, lease agreements, and employee contracts. Do not let the relaxed culture persuade you to skip paperwork.