Opening a new business in DR

We have a couple of questions: is it possible to sublet a property? meaning renting it and used it as B&B, since we dont want to jump in and buy.
How safe if to install solar panels? I heard people could just stole them easily.
How is the internet in Las Terrenas? We need a really good good internet.
Who are the key people/networking in las Terrenas?

Regards,

Francies

Hey Bob,  just an FYI,  you can open a corporation and get a tax number before you even apply for residency.

But to maintain a business corp you need to apply

Bob K

Actually you don't.  Foreigners and foreign companies can own companies here directly without any residencia.

Good to hear because I have friends who were told they needed to get their cedula for tax reasons on the restaurant they have owned for the last 3 years with out it.  I will tell them to contact a new lawyer.

Bob K

If the restaurant is owned INSIDE a corporation AND they don't work at the business they are fine. IF they work at the business then they are working illegally here. 

Owning a corporation in and of itself doesn't require residency.  Lots of other actions trigger the need!

I guess that was my point they own and work at the restaurant.
Anyone working here to do so legally needs a cedula

Bob K

that is correct. they need the cedula to work legally!

I worked as Dock Master at Ocean World a few years back without one. Human Resources was very thorough with my documentation and I paid taxes. I wasn't imported but several people are and they, as far as I know, didn't get cédulas. I wouldn't think they'd do that if it wasn't legal.

Actually yes they would.

The only way to work legally is with a cedula or a work visa. For years the gov't turned a blind eye to most of the infractions, now they are cracking down.  They are getting more and more serious about  foreigners being legal.

That's good to know. Danilo is really amping up the taxes too. To bad he didn't, although not a surprise, keep his promis to reduce gas prices. Do you know if he's going to subsidize propane again? I'm just glad I still don't have to pay Realestate taxes.........yet.

My feeling is Danilo is doing a lot of good work. Not sure he can control the world gas prices but he can control the tax rate.....  as to subsidizing propane - no idea unfortunately.  I wish I knew.......LOL

Crude from Venezuela is cheap. Hipolito couldn't buy from Chavez due to getting caught being involved with the assassination attempt on Chavez. So he had to buy from the USA and while prices were $3.50 there we only paying $1.20. I know it's a hot topic but the purple party seems to be bigger thieves. To bad that party stayed in power. A change would of at least broke Lionel's machine. Having his wife made VP keeps the $$ in the family. Only here could you experience such political escapades. Lol

Planner - you talk about doing market research in many of your post.  How would you suggest going about doing that here in Dominican Republic.  I have lived here for a year in the Santiago area.  I have dreams of opening a business, mainly a bakery (cakes, cupcakes, danishes, all things sweet) and eventually adding a brunch option or some type of fast food/drive thru option that includes beer on the menu.  But, I'm not sure about how to go about testing the market.  I have spoken with two local Dominican owners who own a philly cheesesteak and sushi place.  They both started at home with servicio al domicilio (home delivery) and now have small locations in the affluent areas of town.  I know this type of thing has to have the perfect location.  But how do I test this market? I live in an apartment and I really don't want any and everyone coming to my house.  Suggestions would be greatly appreciated.  I don't want to invest in something that closes in 6 months. I'm willing to do the homework, just not sure how to do it in this environment.

First welcome to the forums!  you are making some smart decisions right off the bat - not letting a bunch of strangers into your apartment.

Here is how I would test the market if I was selling cakes and sweets like you are making - make some samples of your baking - take it to your 2 local owners and ask them to sample them.  Ask them what they would pay for them if you were selling. Ask them if they feel they can sell them IN their restaurants.  Now,  do the same with places you DO NOT know and keep really good records.  Soon you will find out what might sell and at what price.  You need to do the same with Dominicans and expats if you can find enough of them.  You can go to offices - for example a law office, go in and give away some items - for the price of feedback.  Prepare a small menu of items - for example a whole cake for birthday celebrations that you will deliver! 

Here is my gut sense  - in Santo Domingo we have several awesome bakeries who do very very well.  they sell cakes etc like we would buy in North America, they are not Dominican style cakes and pastries.  They charge fairly expensive prices and always have clients both eat in and take out.  they do cake and pastry orders as well. You can do the same in Santiago  IF your product is good (please mail my samples!) and if they are priced right!

Santiago is a market big enough for this type of enterprise.  You also need to go find out what the competition is!  I don't mean Dominican style bakeries but your style!  I have assumed you are not baking Dominican style!  Build up a following before you open a location!  Make sure to track all the feedback,  don't take it personally, and take all of it with a grain of salt!  People will tell you what they think you want to hear!

Keep us updated!  It will be interesting to follow your progress!  And seriously,  mail my samples......LOL

Let me add my welcome.  Planner has given  you some good advice. Santiago is certainly big enough for this type of venture.  There are few fine bakeries about but not very many. There is also a  University area that may support this type of effort.
Good luck in your research.

Bob K

I was looking to open a business in Punta Cana for IT. What all would I need to do to get things started?

Ducer, welcome to the forum.  Lots of nice folks here with some good information.
First off have  you been here before?  So you speak Spanish?  Do you have your residency and cedula cards?  Do you have an RNC (tax) number yet.

You need all of those to start a business.  That is besides a business plan, due diligence on  needs and practicality.  Money for start  up.

What do you plan on doing?

Bob K

Hi all,

Very interesting thread to read. I'll be speaking for myself and a partner as we are throwing around the idea of opening a seadoo rental shop. Further expanding it into a much larger rental/active experience. We are both currently Canadians living on the border of the US/Canada border in Ontario. We are enrolled in University and College taking Sports and Rec, as well as international business but are frankly a little sick of the current student life. While we will finish our schooling before becoming expat's we are currently looking to see if it's a viable option for us. I have experience with mechanics, seadoos, and maintenance/operation of the machines while my partner is a real social go-getter, loves to talk, and has loves an active lifestyle (a little more than me) combined we have some great marketing ideas.

We are looking at core tasks to check off before researching the equipment, land and logistics. With that being said, number one is what all is involved in starting a business in D.R? We have a basic idea from online research but any personal experience would be helpful.  We have seen one company that offers an all inclusive set up for $6500usd. But I'd like to cut costs and keep things lean.

Looking forward to talk with all of you and maybe visiting you when we make it down there!

First know that seadoos are pretty much banned here. Then factor in gallons of gas per hour of operation, cost per gallon and prices you need to charge..... really think this through guys!  FYI gas is almost US 6 bucks a gallon!

And happy to meet with you when you visit!!!

If you are coming to the north coast I would be happy to meet as well. We are in the Sosua/Cabarete area with lots of water activities but as Planner says seadoos are pretty much banned in most areas.

And there are lots of hoops to jump through to get business started including residency and cedula cards and a RNC (tax) number.  All expensive and time consuming.

Bob K

And then tourism license, excursion license, coast guard approval, etc etc.

Planner- that's interesting. I'm hoping to arrange bulk fuel and operate a clean running friendly business. I don't want to upset locals, so we have plans to get some mufflers in the machines and ensure our customers are safe and polite.  While we are in business to make profit like anyone else but I don't want to upset our "neighbors". I have crunched numbers and definitely was generous with fuel prices budgeting. Also accounting for bulk fuel orders. We are planning on 4 machines plus my currently owned machine as a rescue/patrol craft.



Bob, we looked into a property briefly in Sosua before finding out that machines are banned in the area.

I'm also a little concerned about some of the import duty rates I'm seeing. While the official D.R website says there are incentives that will get you past that I'm not sure such a small operation will qualify for such a program. I'm assuming seadoos will fall under a "Luxury" or non-essential good and will be taxed 15-300% I'm seeing. 3 different sources with 3 different rates so far.

They  are banned in almost ALL areas. Bulk fuel doesn't get you much price break either, sorry. The real issue in fuel price is taxes.  You won't qualify for.much incentive either.

And the actual rate at time of import will depend on who.is managing it for you and the "propina" at the time. Propina = tip....

I think you are barking up the wrong tree here with that kind of business.

Bob K

Hi there!
While I was hanging around Playa Dorado 7-10 years ago,
these 2 locals were running a sea-doo rental business.
I think it was about 25. US for 15 minutes.
Tourists, half in the bag, were the only
customers. They had maybe 10 a day.
Also there was a very limited area they had.
Extremely dangerous out a bit.
I would think the real liability insurance would
be out of whack. They left around 2009 I think.
Nah, try bootlegging like everyone else!
Good luckl!
Happy Easter!

Tomas they were removed everywhere......

I have not seen one in years in the Sosua/Cabarete area

Bob K

Really!
Well, for once we did the right thing!
Now... "they" have to get rid of all the suicidal drivers!
They are just banned from rentals?

I've seen 5-6 in driveways in Cabrera.
oh well.
Good place for them.

Hello everyone!

I've been playing around with the idea of starting a business here in the D.R. (preferably the Cibao area, perhaps Santiago since it would probably be pretty hard in a rural area).  I honestly have no prior experience but I have ample time and I want to this right (through lots of research and talking to people who have done it!).

I don't have my residency yet, but that can be applied for.  I do speak Spanish and have been living here for the last 3 1/2 years (working at a non-profit and just on my own).  I like the idea of starting a hostel/cafe... but once again have no prior experience.  Any suggestions?  Would it be helpful to get my Master degree and/or save up a lot of money before getting started?

Thanks so much for the help.

Terrill K.

Hi and welcome to the forums!  Sounds like you are going about this the right way - slowly.  So first, no i don't think your masters will help you!  I do think you will need money - guaranteed. And as a first step i suggest you go to work in the type of place you think you want to own. No better way to start learning the industry then first hand! get a feel for it, learn as much as you can and then start moving forward!

Some good advice from Planner. Learn the business you are interested in before you start one.  Starting here at a business with no experience is almost a guarantee for failure.  Don't start with the odds stacked against you.  Learn first on some one else's dime.

Bob K

Hello Planner and Bob, thanks for doing a brilliant job at imparting information and your experiences in the Dom Rep. My family and I will be starting a new life there in July. My daughter has managed to obtain a teaching job in an international school. I have been teaching for over 25 years, and would like to do some tutoring (in primary age range subjects) and teaching English to both adults and children. What is the scope for starting small and then developing this into a busines for the community.

Welcome to the forum, congrats to your daughter! What are are you moving to? Do you speak Spanish? Tutoring - my advice will depend on the first 2 questions....

Hello again Planner; we are moving to Puerto Plata. I returned to England a month ago after teaching in a primary school in Spain; I also used to teach local children English in after school classes. My Spanish is not brilliant but enough to get by for now, I am also taking some Spanish lessons.

Hi. Okay well first try to get tutoring clients from the school where your daughter will teach.  Not sure how many locals will be able to afford you but that will depend on your rates.

Maybe set up some group English lessons with reasonable rates! Check out Costambar Monthly for local ads and other info. Just Google it.