Permits for a new business

paul

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Jan 1, 2002
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Dear DR1 Legal Advisor-

What i am gathering from the board is that if i want to start a business in the DR like a photo studio or a computer business- i simply show up and begin work; there are no permits like there are here in the USA.

I understand i will have to have a residency permit and i imagine a curtesy call on the local Police Captain would be a good idea.
But that otherwise it is a pretty open society for business. If you have a good idea and are willing to work it more power to you.

To those of us from a permit and license happy society this is hard to grasp.

Am i missing something i should know before i fly off and try to invest in a local business??

Thanks for your advice.
 

BushBaby

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Jan 1, 2002
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Paul,
It would be certainly adviseable for you to set up your own company, registering a company name etc. You can do that through a Lawyer once you are here but you CAN be trading whilst you are getting the name etc.

My advice would be to NOT set up trading until you have seen how things work down here - it is totally different to Europe & the States, believe me!! You would be advised to work for someone else for 6 months or so to investigate & get to know the problems of running your own business, the people you should 'COURT' & those you should avoid at all costs. You will need to get to know the 'GOOD' & 'RELIABLE' suppliers &/or clients. You need to know how to insist on 'CDash Up Front' rather than a credit system - or you could go bust VERY quickly!!!

The other way is to start off very slowly, doing work for friends & aquaintences until you have a reasonable client base & have a 'Word of Mouth' referral system in place.

I am sure Fabio Guzman will fill you out on the neccessary legistics of setting up your own business, but if you are thinking of coming to the North Coast & require any practical help from someone who's been down this path, drop me an e-mail. Apart from a few contacts here on the North Coast, I have a few ideas relating to types of businesses that might succeed here. I don't want to get involved myself as I am happy with my "LOT" but you might find some credence in my thoughts.

Best regards & good luck - Grahame.
 

Dolores1

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May 3, 2000
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The Dominican government requires lots of paperwork and permits for doing business in the DR. But in most cases you can join the informal world if you start out very small to test the market. That is running a business from within your home.

A photo studio (unless operated from home) or a computer shop would not be considered small. If you set up shop in a commercial area or street, you can expect the visit of government inspectors asking you for the different required operations.

See http://dr1.com/legal/business/starting.shtml
 

paul

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Thanks Delores

I did read the link you mentioned, in fact i read it before posting.

"3. If you are a small operation, start doing business informally to see if there is a market for the idea. If it works, incorporate. "

I took this to mean that a sole-propriator could make up to certain dollar value or what not - not certain industries or locations.

Basically from your post i'm now under the impression that ANY commercial enterprize recognized as such is in violation unless they have gotten "certain papers" , whatever they may be, from an appropriate filing by an attorney or what not.

Any specialized people in this field and prices expected to pay, other than incorporation, should that be desired?? or just your average run-in-the-mill attorney will do. Perhaps get the accountant first and have them recomend an attorney for filing. Anyone recomend an inexpensive accountant for a small startup business in the Santo Domingo area?

I'm just talking self working the "business" not a bunch of employees or anything. Thanks for your insight because up till now all the input seemed to be toward just an informal business setup for small businesses.
 
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Fabio J. Guzman

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Jan 1, 2002
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Actually, it?s not as hard to be ?legal? as it?s made out to be. The checklist below will guide you through the process.

1) Residency Permit. Mandatory. Otherwise you would be, as American authorities are wont to say, an ?illegal alien?.

2) Incorporation. Optional. It would be nice to separate your personal from your business liabilities but it?s not mandatory. You may operate as a sole business owner ( ?negocio de ?nico due?o?). If you want to go ahead with incorporation get the assistance of a lawyer who knows what he?s doing. Average run-in-the-mill attorneys in the Dominican Republic are awful. If the template your run-in-the-mill attorney happens to have in his/her computer is for a Board of Directors of 11 with preferred shares and other corporate trimmings, that?s what you?ll get no matter what you need.

3) Name and/or trademark registration. Again, optional. Usually the same attorney who processes the incorporation takes care of this.

4) Lease. Mandatory unless you own property. Standard procedure is for the tenant to pay for the lease. If you are really short of money you can even go to the bookstore and buy a template. Not much to worry about here since Dominican law is very protective of the tenant.

5) Tax Registration. Mandatory. Go to the nearest Internal Revenue Office (?Oficina Local de la Direcci?n General de Impuestos Internos? - DGII) with a photocopy of your c?dula. They will register you for free! You?ll get a tax or RNC (?Registro Nacional de Contribuyentes?) number.

6) Employees? Registration. Mandatory. Go to the nearest Labor Office and buy the ?planilla?, etc. which you must fill out with information about your employees.

7) Social Security Registration. Mandatory. Same as above except go to Social Security office.

A business license is not required in the Dominican Republic. Something similar (the ?patente?) did exist before but was abolished some years ago. Certain businesses, however, may require special permits: for example, restaurants (public health permit), hotels (tourism permit) , etc.
 
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paul

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Thank You Mr. Guzman-
You have taken MUCH of the terror out of this process.
Just knowing what to do makes the process much less frightening.

I can incorporate later. Just need to have my "ducks in a row" as we say. Don't want to run "afoul" of the law in a new endeavor.

Seems like just the normal taxes and such after one gets his application for residency.

Normal business stuff not "Turkish Prison" type violations and requirements. No rubber hoses across the souls of the feet or anything :O)

Thanks again. [Much relieved and enlightened. In your debt sir.]
 

paul

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residency-one more thing please

I have been made aware that one must demonstrate "solvency" through the operation of a business to acheive residency - but residency must be obtained BEFORE one can legally opperate a business or work in the DR - how is this reconciled?

I am assuming that the solvency is demonstrated over the course of the final grant of permanent residency - which i am led to believe takes several years. If this is the case then the temporary residency is granted after the medical exam and/or some other presentation- and this is sufficient to begin opperating legally?

Thanks again.
 

paul

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guarantor?

Thanks - don't know why i hadn't seen that listing before http://dr1.com/legal/migration/residences.shtml - i guess the advice on this board seemed so full i just went on what i heard- always best to see it in writing.
What about the guarantor requirement- for someone like me that has no family there , only a few friends. Who would obligate themselves in the way specifed? I know i would be very reluctant to guarantee anyone. Can the guarantor be a corporation? and can the corporation be my own company? or can a bond be posted in lieu of? When would the guarantor be released from this obligation??
 

Fabio J. Guzman

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Jan 1, 2002
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The attorney doing the residency usually supplies the guarantor. It's part of the package. The guarantor for a prov. residency is responsible for just a year. The guarantor for a definitive residency is responsible for life or until the person guaranteed leaves the country.
 

paul

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one last thing please..

Thanks for all you help.

Question?/
Residency is required for self employed also? In Costa Rica for example one can be self employed but not work for someone else unless a resident. Tourists CAN work if self employed in Costa Rica, they just have to leave the country ever three months. Just seems with the solvency requirement one needs to not have to work to work. I would be willing to work as a tourist if that option was available.

Sorry to take so much of your time with this one.