Financial Crime World

New Law Regulating Financial System in Dominican Republic: Key Points for Foreign Investment

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The new law regulating the financial system of the Dominican Republic has introduced significant changes to foreign investment in banking and financial institutions. This article summarizes the key points related to foreign investment in these sectors.

Foreign Investment

Eligibility and Requirements

  • The Monetary Board will determine the requirements and conditions for banks and other financial institutions organized in accordance with other countries’ legislation.
  • Foreign individuals and corporations can participate in financial brokerage activities within the Dominican Republic under specific requirements and conditions set by the Monetary Board.

Operations and Services

  • All purpose banks may carry out certain operations and services, such as:
    • Foreign exchange purchase/sales operations
    • Correspondent services with banks abroad
    • Custody of securities

Foreign Banks

Requirements for Opening a Representative Office or Branch

  • The Monetary Board will regulate the requirements for opening a representative office or branch of a foreign bank in the Dominican Republic.

Compliance with Local Laws and Regulations

  • Foreign banks must comply with local laws and regulations, including those related to:
    • Capital requirements
    • Corporate governance
    • Anti-money laundering measures

Banking Activities

  • Foreign banks may engage in banking activities, such as:
    • Accepting deposits
    • Granting loans
    • Providing other financial services

Key Requirements

  • A minimum paid-in capital of RD$90,000,000 (approximately USD $1.8 million) for all purpose banks
  • A minimum of 40% of the board members must have expertise in financial matters or be well-accredited on economic, financial, or entrepreneurial matters
  • Foreign investment must comply with local laws and regulations, including those related to capital requirements and corporate governance.

Please note that this summary is based on my understanding of the text and may not be exhaustive. If you need further clarification or details, please let me know!