Financial Crime World

Corporate Governance Compliance Gains Momentum in Dominican Republic

The Dominican Republic has experienced remarkable growth over the past two decades, with its GDP growth rate reaching 12.3% in 2021. The country’s robust legal framework has played a crucial role in attracting significant investment across various sectors.

Digitalization of Corporate Processes

The COVID-19 pandemic accelerated the digitalization of corporate processes in the Dominican Republic. Institutions such as the Chamber of Commerce and Production of Santo Domingo, Inc., the Real Estate Jurisdiction, the Tax Authority (DGII), and the Judiciary have offered services via online platforms to ensure business continuity.

  • The Chamber of Commerce digitized certain services, allowing for expedited renewals, modifications, and updates to commercial records.
  • Plans are underway to launch the FEDOCAMARAS digitalization project in 2022.

Over the past two years, there has been a surge in interest and development in fintech-related issues. This has led to an increase in the incorporation of companies offering these services.

  • The promotion of e-commerce aims to implement electronic invoicing, which will eventually become mandatory for companies operating in the Dominican Republic.
  • New company incorporations increased by 42% in 2021 compared to the previous year.

Regulatory Changes

Regulatory changes have been made in tax matters, affecting corporate law. The DGII has implemented measures such as:

  • Tax treatment for reorganizations
  • Capital gains tax
  • Application of VAT on digital platforms
  • Draft regulation for capital gain regulations and discussion of draft regulations for applying VAT on digital services provided outside the Dominican Republic

Future Outlook

As the country continues to recover from the pandemic, significant economic growth is expected in 2022. This will drive market transactions in real estate, health, free trade zones, and local manufacturing.

  • The corporate market and legal practice will focus on good corporate governance and compliance.
  • Public Private Partnerships and trusts will offer viable structures for important projects.

Overall, the Dominican Republic’s focus on digitalization and regulatory changes has created a favorable business environment. As the country continues to grow, we can expect increased investment and economic activity in various sectors.