Corporation in DR

Cynthia

New member
Sep 27, 2002
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1. We would like to form a Dominican corporation to hold our investments in the DR (primarily bank CD's now; possibly operating businesses down the line). Can a US corporation (organized as a LLC) own 99% of a DR corporation? And, what form of organization in the DR would be best suited to our situation?

2. Are Dominican corporations subject to any form of taxation (direct or indirect) or any levies/fees of whatsoever nature. Are there any reporting requirements?

3. Are there any other issues or considerations we need to be aware of with respect to these matters?

4. What documents are needed to form a DR corporation and are there yearly fees?

5. What are the benefits in your opinion of forming a corporation in DR to hold these investments?

Thanks so much for your help and expert advice.
 

Fabio J. Guzman

DR1 Expert
Jan 1, 2002
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252
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www.drlawyer.com
1. A Dominican corporation can be held 100 % by foreign entities. The legal form of the Dominican corporation is a stock corporation.

2. Dominican corporations are subject to taxes. The taxes are established by the following laws; 11-92, 147-00 and its corresponding presidential decrees and by the law 12-01. The basic rules are 25 % income tax (article 297, law 11-92) and 25 % tax on dividends (article 308, law 11-92). The tax on dividends constitutes a tax credit against future corporate income tax.

3. Be especially aware of article 299 s of the law 11-92: the interest received from a financial institutions is tax free only for a natural person. Therefore the interest a corporation receives from a financial institutions is subject to corporate income tax.

4. The yearly fees depend on the seize of the operation.

5. In general, a corporate holding structure always allows a much more flexible estate planning. Please understand that we can not give you an opinion about your case without knowing all the details.


Julio & Chris