Opening a new business in DR

alabemos wrote:

There are two things you need to be very aware of: liquidation pay, and  the extra month's pay everyone gets at Christmas. Otherwise they can be totally unexpected expenses that can suddenly swamp your new business. Also be aware that it is very difficult to fire anyone.

You need to know what the law says about things like insurance, vacations, sick pay etc. These can add up very quickly. The law also prescribes how many of your employees must be Dominican.

The labor code is complicated -  count on  having  either a good HR  consultant, HR person on staff OR Labor lawyer when needed.

Cost of  liquidation, Christmas Salary,  benefits etc can easily add  25% to your payroll costs and should be  budgeted for.

And  no it is not  "very difficult to fire anyone"  in fact it is  easy  BUT it can be  expensive.....LOL

Hyperboles wrote:

Ok, at the beginning, what should we do?
I guess I cannot just rent a place, get my products and start pumping!
What about legal procedure?

I would start with some kind of  marketing study. can be as fancy and intricate as you want but it will give you a base idea of what you are looking at.

You need to incorporate - good sound legal  advice is needed to determine the type of company.  That gives you and  RNC #required for so  many things,  hiring staff,  dealing with tax issues etc etc.

Without an incorporation you won't  get a business bank account,  a business  phone acct, internet, cannot  legally hire staff etc.

So that is your first step.  It can be done as fast as   1 week for a "shelf" company.  If you want to choose your corporate name it can take about  3 weeks with a good lawyer.

While this is going on find and negotiate your lease for space,   interview staff,   negotiate for phone lines etc.  Just nothing should actually happen till you have the incorp  done.  YOU  can set up business and start in but you are running HUGE  risks by doing it that way.  As long as you know and accept the risks up front then the choice is yours.

most times the issue is the not knowing.   Keep asking - you are  asking good questions!!!

Hyperboles wrote:

Ah, finally some sound pointers!

Let me tell you, we know what we want to do, we have a good idea of where we would like to implement it and why it might be a good location.

We have the habit of business (for here, that is to say!) but for DR, internet doesn't explain much. So we look for expats who made it happen.

We would hate to be taken to the cleaners before we even start making money.

So maybe you could recommend us governmental or legal websites, books or so where we would find the steps and the real costs.

It's a pleasure to read you,
Myriam.

Thanks  Myriam.  Just a warning,  often those good ideas will not fly here for a variety of reasons.  Make sure to check it out really well.

Go to - drlawyer.com they are an excellent firm that are more expensive then some BUT they do what they say they will do and do it right and for the most part on time.

They have many  PDF documents on a variety of topics.   There is one on  incorporation, residencia  etc. Most gov't stuff is in spanish!

Another piece of advice, whatever anyone says it will cost -  add 25% minimum. Whatever length of time it will take  add  50%!

Anything  labor related - reasonably  inexpensive.
Anything  material related -  not  inexpensive.
Anything imported -  expensive.

GEOTECH wrote:

I am a American that was in the Dominican Republic and started a corporation 3 years ago.  The attorney obtained the corporation and the rnc number but I have not started the business yet. 

I wanted to know what do I need to do regarding becoming a permanent residence.  I was told that if I had a business I must be a permanent residence.  What do I need to do to become a residence? Is it as simples as showing my corporation papers?

Also, do I owe any taxes if my company is still under development with no profits or expenses yet?

The corporation needs to do its annual reporting for both legal and taxation reasons. You may not owe any money but you need to file anyway.

No you do not automatically qualify for permanent residence nor do you need it. First do you have your Temporary Residencia? That is your first step then you renew it and file for permanent. AND you will need your residencia. 

You need a lawyer most likely to do this properly.  IF you want more info feel free to message me or email me at consultantdr@gmail.com

So, out of curiosity why have you not got the business going yet?