Firm Profile > Guzmán Ariza > Santo Domingo, Dominican Republic

Guzmán Ariza
12 PABLO CASALS
SERRALLES
SANTO DOMINGO, 10125
Dominican Republic

Labour and employment Tier 1

High-profile tourism and sports-sector companies entrust Guzmán Ariza with sensitive and complex labour law matters; the team handles a broad range of contentious and non-contentious employment issues, counting labour litigation, hiring and dismissals, employment contracts, collective bargaining agreements (CBAs) and union negotiations among its areas of expertise. The group is also strong in representing senior executives in employment disputes. Labour law expert Rubén García, based in the Samaná office, jointly leads the practice with Rhadaisis Espinal, who is well known for her expertise in litigation. La Romana-based Alfredo Guzmán, real estate law expert Fabio Guzmán Ariza and Julio Brea Guzmán in Puerto Plata are also active in this space.

Key clients

Club Med

Pawa Dominicana

Major League Baseball

Lifestyle Holidays Vacation Resort

SH Cacao CO Partners LP

Sosúa Ocean Village

Orica Dominicana, S.A.

Grupo Laugama

GAP Medics

TravelSmart

Real estate and tourism Tier 1

Guzmán Ariza's real estate practice is 'a market leader in the Dominican Republic in this area'. The department is well known for its strong capabilities in handling condominium and hotel mandates, and is very experienced in real estate permits and project finance matters. In the Santo Domingo office, Fabio Guzmán Ariza is a highly regarded practitioner in the real estate sector, with notable expertise in condominium projects, while Fabio Guzmán Saladín is a key contact for project finance. La Romana-based Alfredo Guzmán assists multinational companies with transactions in the hospitality and tourism sectors; Julio Brea Guzmán, based in Puerto Plata, counts real estate litigation as a core area of strength; and Rubén García is a key contact in the Samaná office.

Testimonials

Guzmán Ariza is a market leader in the Dominican Republic in this area, and has a great deal of experience in large-scale real estate transactions‘.

The quality of the service, their organisation and the efficiency of their responses makes them stand out‘.

Key clients

Club Mediterranée

Meliá Hotels International

Anex Tours

12Tree Finance

Noval

Sunwing Travel Group

Viva Wyndham Resorts

Sosúa Ocean Village

Ani Villas

Lifestyle Holidays Vacation Resort

Dream City

Grupo GHR

Acun Medya

Athelia Blue Finance

Villas Infinity

Royal Resorts

Knauf Gips

BlueJack Tar

Dama Hotels

Nader Enterprises

Dispute resolution Tier 2

Managing partner and well-regarded litigator Fabio Guzmán Ariza heads Guzmán Ariza's dispute resolution department, which is active in real estate, commercial and civil litigation, and is also strong in white-collar criminal cases. Insolvency litigation is another key area of instruction for the 'always available and well prepared' team. Rhadaisis Espinal has an excellent reputation for her expertise in litigious work; Alberto Reyes is noted for his strength in administrative and commercial litigation and arbitration. Special counsel Melissa Sosa and senior counsel Marianne Olivares, who is based in the Punta Cana office, are also noted.

Practice head(s):

Testimonials

Always available and well prepared‘.

Marianne Olivares is excellent‘.

Key clients

Pawa Dominicana

Club Med

JJH Capital Inversiones Extranjeras

Wells Fargo Bank

Sunwing Travel Group

Trevi-Galante, SA

Meliá Hotels International

Edesur Dominicana, SA

Lifestyle Holidays Vacation Resort

Consorcio de Construcciones Planificadas

Dominican Government (Bahía de las Aguilas)

United Brands

Acun Medya

Corporate and finance Tier 3

Guzmán Ariza's corporate practice houses a 'well-rounded' team of 'dynamic lawyers'. Acquisitions and cross-border investments have been prominent in the team's recent workload, and the team also has substantial expertise in bankruptcy and restructuring. Energy, tax, media, mining, agriculture and financial services are sector strengths for the group. The practice is jointly led by founding partner Fabio Guzmán Ariza, Alberto Reyes, who handles corporate matters for infrastructure and construction companies, corporate law expert Fabio Guzmán Saladín and La Romana-based Alfredo Guzmán, who has particular expertise in real estate. Senior counsel Pamela Benzán is also noted.

Testimonials

A multi-disciplinary team with in-depth knowledge‘.

A well-rounded team‘.

Dynamic lawyers‘.

They provide timely, precise answers and solutions‘.

Key clients

Blue Orchard

PAWA Dominicana

Reckitt Benckiser LLC

12Tree Finance

Elof Hansson

Knauf GIPS

SH Cacao CO Partners LP

Acun Medya

Digital Works Company

Phillips 66

Trevi-Galante

UBS Group Investment Bank

General Cocoa Company – Coffee America

Katmandu Group

Asset Wealth Management

Rep1 Baseball

Tadl

Abdelmaseh

Arconim Constructora

Right Construction

Guzmán Ariza is the only national law firm in the Dominican Republic, with seven offices strategically located to serve the clients in every major business and tourism centre in the country. The firm is client-oriented and offers a full range of services, across a wide variety of practice areas, through the best team of multilingual lawyers.

Our practices have earned us a reputation in the local and international business community as a respected and trusted firm that produces results.

We are internationally connected. As members of SCG Legal and GGI Geneva Group International — we are able to assist the clients effectively in international transactions throughout the world.

Main Areas of practice

Corporate

Guzmán Ariza has extensive experience counselling clients in all stages of their business ventures in the Dominican Republic, the largest economy of Central America and the Caribbean. The team of lawyers advises local and international clients in organizing start-ups, managing risks while growing in the market, incorporating new partners, seeking funding for expanding operations, bankruptcy and restructuring procedures or just helping them in complying with all local laws that relate to doing business in the Dominican Republic.

Real Estate

Guzmán Ariza’s Dominican real estate department is unsurpassed in its skill, experience and geographical reach. Real estate lawyers work as a cohesive team with other disciplines, including tax, financing, environment, and litigation to ensure that all issues that could impact a transaction are properly and thoroughly addressed.

Mergers & Acquisitions

Guzmán Ariza is actively involved in complex corporate transactions in which whole or portions of businesses are transferred, divested or restructured. Members of the corporate team include two partners with both law and MBA degrees, as well as in-house tax and accounting counsels, which generally results in smooth transactions with less time spent on due diligence and negotiations.

Banking, Finance and Securities

The firm’s expert team of attorneys advises international financial institutions, as well as companies seeking traditional or alternative sources of funds, in the negotiation, structuring, documentation and execution of all types of financial transactions related to the industry.

Project Finance

The firm has deep expertise in advising clients in any type of financing transaction involving large infrastructure and industrial projects, regardless of the role its clients may play in them.

The firm has a comprehensive team of experts in corporate law, taxation, banking and finance, securitization, restructurings, and other legal disciplines, ready to efficiently and securely put together all kinds of transactions in project finance.

Tourism

The attorneys at the firm have extensive experience providing counsel and all legal services needed for any tourism-related activity in the Dominican Republic and offer clients “area-specific” advice, as well as counsel on the regulatory framework and incentives through the CONFOTUR Law, applicable to all business activities and transactions within the industry.

Foreign Investment. International Trade

Guzmán Ariza offers a wide range of services to clients in international trade and investment. The firm’s lawyers have the knowledge and expertise to advise clients on trade agreements, double taxation and international conventions involving the Dominican Republic.

Litigation

The firm has a large team of lawyers with extensive litigation and arbitration experience to handle all disputes its clients may find themselves involved in before local courts, once all negotiations and alternative solutions have been explored, expended or discarded.

Environment. Climate Change

Guzmán Ariza advises clients on all environmental regulatory, compliance and transactions required for the development of projects in the country. The attorneys help clients with the structuring, financing and implementation of the projects, as well as all transfer, operation and restructuring agreements related to them.

The lawyers counsel local and foreign companies and individuals in different industries and practices, among others; Taxation, PPP, Infrastructure, Cinema, Sports, Energy, Mining, Trusts, Wealth Preservation, Manufacturing, Food and Beverage.

Other offices: Bávaro – Punta Cana, Sosúa – Puerto Plata, Las Terrenas, La Romana – Casa de Campo, Samaná, Cabrera.

Department Name Email Telephone
Commercial and Corporate Fabio Guzmán-Saladín fabio@drlawyer.com
Commercial and Corporate Alberto Reyes-Báez areyes@drlawyer.com
Real Estate Alfredo Guzmán-Saladín aguzman@drlawyer.com
Real Estate Julio Brea-Guzmán jbrea@drlawyer.com
Real Estate César Calderón ccalderon@drlawyer.com
Finance (project finance/banking/insurance/securities) Fabio Guzmán-Saladín fabio@drlawyer.com
Finance (project finance/banking/insurance/securities) Alfredo Guzmán-Saladín aguzman@drlawyer.com
Mergers and Acquisitions Fabio Guzmán-Saladín fabio@drlawyer.com
Mergers and Acquisitions Alfredo Guzmán-Saladín aguzman@drlawyer.com
Litigation and Arbitration Fabio J Guzmán-Ariza fguzman@drlawyer.com
Litigation and Arbitration Rhadaisis Espinal respinal@drlawyer.com
Litigation and Arbitration Julio Brea-Guzmán jbrea@drlawyer.com
Foreign Investment Fabio Guzmán-Saladín fabio@drlawyer.com
Foreign Investment Alberto Reyes-Báez areyes@drlawyer.com
Tourism and Hospitality Julio Brea-Guzmán jbrea@drlawyer.com
Tourism and Hospitality Alfredo Guzmán-Saladín aguzman@drlawyer.com
Taxation Fabio Guzmán-Saladín fabio@drlawyer.com
Taxation Alfredo Guzmán-Saladín aguzman@drlawyer.com
Construction Alberto Reyes-Báez areyes@drlawyer.com
Construction César Calderón ccalderon@drlawyer.com
Labour and Employment Rubén J García rgarcia@drlawyer.com
Labour and Employment Rhadaisis Espinal respinal@drlawyer.com
Energy and Environment Fabio Guzmán-Saladín fabio@drlawyer.com
Energy and Environment Giselle Pérez-Reyes E: gperez@drlawyer.com gperez@drlawyer.com
Sports and Entertainment Alfredo Guzmán-Saladín aguzman@drlawyer.com
Sports and Entertainment Rubén J García rgarcia@drlawyer.com
Photo Name Position Profile
Mr César Calderón  photo Mr César Calderón Real Estate and Condominium Law; Tourism and Hospitality; Corporate and Business Law;…
Mrs Rhadaisis Espinal  photo Mrs Rhadaisis Espinal Civil, Commercial and Real Estate Litigation; Contracts and Torts, Banking.
 Rubén García photo Rubén García Real Estate Law; Labor & Employment Law; Corporate and Business; Banking and…
Mr Alfredo Guzmán  photo Mr Alfredo Guzmán Corporate and Business; Real Estate and Condominium Law; Mergers and Acquisitions; Project…
Mr Fabio J Guzmán Ariza  photo Mr Fabio J Guzmán Ariza Litigation and Arbitration, Real Estate and Condominium Law, Corporate and Business Law,…
Mr Fabio J Guzmán-Saladín  photo Mr Fabio J Guzmán-Saladín Corporate and Business; Mergers and Acquisitions; Project Finance; Banking, Insurance and Securities;…
Mr Alberto Reyes  photo Mr Alberto Reyes Corporate and Business; Mergers and Acquisitions; International Trade and Investments; Litigation and…
Other fee-earners : 45 lawyers plus 9 other free earners
Total staff : 125
English
Spanish
Dutch
French
German
Italian
Portuguese
Russian
SCG Legal
Geneva Group International (GGI)
Partners : 8

Dominican Republic

INTRODUCTION

The Dominican Republic has been the fastest-growing economy in the region since 2014. With a population of 10.8 million inhabitants and a GDP of $85.5 billion USD, it is the tenth largest economy in Latin America and the largest in the Caribbean region.

The Dominican economy, formerly dependent on the export of agricultural commodities, mainly sugar, cocoa and coffee, has transitioned successfully in the last decades to a well-diversified mix mainly comprised of services, manufacturing, agriculture, mining, real estate and trade. The service sector accounts for almost 60% of GDP and includes the tourism, telecommunications and finance industries. This year, the country experienced continued dynamic growth within key economic sectors, including construction, agriculture, financial services, healthcare, hospitality, transportation and local manufacturing, with inflation holding relatively steady from previous years.

International trade has also been growing increasingly each year between the country and its most important trading partners: The United States, China, Haiti, Mexico, Colombia, Spain, Brazil, Netherlands, Belgium, United Kingdom, Jamaica and Cuba.

According to the International Monetary Fund, growth in the Dominican Republic in 2019 is projected to close at 5.0%, increasing to 5.2% in 2020.

A COUNTRY IN CONSTANT TRANSFORMATION

The country has taken important steps to ensure that education, business, and the legal environment continue to improve and rise up to meet global standards.

  • The recently amended securities market law and its regulations, approved by the National Stock Market Council this year, will have a great impact in the strengthening of corporate governance and operational transparency.
  • One of the most important laws recently enacted was the anti-illegal trade, smuggling and counterfeiting of regulated products law. This law reinforces the system and strengthens the mechanisms that prevent the smuggling of merchandise through customs and the consequent tax evasion that this generates. Its scope includes counterfeiting and smuggling of regulated products such as medicines, hydrocarbons, alcohol, tobacco and its derivatives.
  • Important bills currently under review by the National Congress include the Public-Private Partnerships law, which will serve as an important framework to boost relations between investors and the different government Ministries involved in infrastructure and utilities; also, a customs law; the law of reciprocal guarantees, and guarantees on moveable assets.
  • The government has established an advanced legal framework for disaster risk management and put in place an epidemiologic surveillance system and rapid response mechanism to speed up the detection and management of sanitary risks.
  • The Criminal Justice system leaders have set a key goal to accelerate judicial processes through the “100 Days Challenge,” making it possible for thousands of cases to get solved within the first 100 days.
  • The DR has passed an insolvency law to speed up and reduce the cost of commercial restructuring and has simplified its online business registration. The country, as well, is one of the world’s top 50 economies where trading across borders is easiest.
  • The Dominican Republic made enforcing contracts easier by establishing specialized commercial court divisions and by adopting a framework for mediation and conciliation, including in commercial cases. Starting a business was also made easier by reducing the minimum capital requirement.
  • The government has doubled education spending as a percentage of GDP since 2013 and implemented a series of reforms to improve learning outcomes. The Government has also joined the World Bank Group’s Human Capital Project, which provides a platform for countries to share experiences on improving human capital outcomes.
  • In 2019, The Travel and Tourism Competitiveness Report, an insight report from the World Economic Forum, ranked the Dominican Republic as the most improved country in the North and Central America’s subregion, thanks to above-average regional and global improvement on 11 pillars, including Environmental Sustainability and Cultural Resources and Business Travel.

FOREIGN INVESTMENT IN THE DOMINICAN REPUBLIC

During the last two decades, the Dominican Republic has sought to foster a highly receptive environment for international investors, adopting policies that minimize regulatory obstacles and provide incentives to foreign companies and individuals to bring in capital. As a result, the Dominican Republic has become the primary destination in the Caribbean for foreign investors.

The Dominican Constitution gives equal treatment under the law to foreign and local investors: foreign investors are bound by the same rules and regulations applicable to local investors and can freely hold equity in local businesses and joint ventures, and own real estate.

Legal Framework

The Foreign Investment Law eliminated all barriers formerly imposed on international investments in the Dominican Republic. Investors contributing capital to companies operating in the country are granted unlimited access to all sectors of the economy, except to those related to national security and certain sensitive industries. The government offers assistance to foreign investors through the Center for Exports

and Investment of the Dominican Republic (CEI-RD), and protection by vouching for loans provided by international agencies for significant infrastructure projects in the country.

In the past, the economic areas most benefited by foreign direct investment were free zones, tourism, mining, telecommunications, financial services, agriculture and livestock. At the present time, the country promotes FDI through important incentives in the tourism, renewable energy and the film industry; general incentives for industrial innovation and competitiveness; incentives to investors in free zones, as well as special incentives for border region free zones, international financial free zones, and special incentives for logistic operators.

There are no major restrictions on foreign investment and investors can repatriate their profits and capital.

INTERNATIONAL TRADE

The Dominican Republic is a member of the World Trade Organization and has received preferred treatment. The country has access to the United States through the Caribbean Basin Trade Partnership Act (CBTPA), which was an extension of the Caribbean Basin Initiative (CBI) and the Preferred Generalized System GSP. Along with the trade agreements the country has signed, it offers international investors and local producers unprecedented free-trade access to the two largest markets in the world: The European Union and the United States. Few other countries benefit from such a privileged situation.

  • The Cotonou Agreement with the European Community allows preferential access to Dominican goods without quantitative restrictions.
  • Dominican Republic and Central American Free Trade Agreement (DR-CAFTA) was implemented by the Dominican Republic on March 1, 2007.
  • Economic Partnership Agreement (EPA) is a free trade treaty with financing and investment aspects between the European Union (EU) and CARIFORUM, an organization of Caribbean nations. The Dominican Republic entered the EPA on October 15, 2008.
  • Free Trade Agreement with CARICOM, signed in 1998 and ratified by the Dominican Republic in February 2001, this agreement involves the Dominican Republic and 20 Caribbean nations (CARICOM), and establishes free trade zones in the region along WTO guidelines. The free trade agreement between the Dominican Republic and CARICOM coexists with free trade agreement between the Caribbean nations and the European Union (EPA).
  • Free Trade Agreement with Central America came into effect in 2001. This agreement coexists with DR-CAFTA, which incorporates several of the provisions of the former. Although a regional treaty, it is in fact, a bilateral agreement between each Central American country and the Dominican Republic. The agreement provides for free trade in all products originating in the region, except those registered in a “negative list.”
  • A Partial Free Trade Agreement with Panama was implemented in 2003.

BUSINESS ENTITIES

Foreign companies may conduct business in the Dominican Republic by setting up a branch office, incorporating a local subsidiary or acquiring the shares of an existing Dominican company.

Shareholders, partners, members, officers and directors of a Dominican company do not need to be Dominican citizens or residents, except in very special circumstances.

Business Entities in the Dominican Republic

Corporations are best suited for large businesses with many shareholders where protecting minority interests is important. They are the only entities that can raise capital through public stock offerings.

Simplified Corporations are best for medium to large-sized businesses that require special shareholder provisions for corporate governance purposes. Simple Corporations cannot raise capital through public stock offerings, but are able to issue debt instruments to the public.

Limited Liability Companies are ideal for small to medium-sized businesses, and are the most commonly-used legal entity in the Dominican Republic. LLC’s cannot raise capital through public offerings.

Common vs. Preferred Shares

All companies can issue common shares and preferred shares. Preferred shares may grant the shareholder the right to a fixed dividend or a fixed percentage of profits, or both at the same time, as well as priority rights over the company capital in case of liquidation.

Shares in Foreign Currency

The value of company shares as well as its capital can be stated in foreign currency.

Formation Process

Regardless of the type of business entity, the company formation process involves five basic steps: registration of the company name; preparation and signature of company documents, such as the company bylaws or articles of incorporation; payment of the incorporation tax; registration of the company documents at the business registry and company registration at the internal revenue agency.

Annual Meetings

All Dominican companies as well as foreign ones registered to do business in the country must hold an annual shareholders’ meeting to review the company’s operation during the previous year. Minutes of this meeting must be recorded at the Business Registry.

Mergers and Acquisitions

Dominican company law contemplates different business combinations allowing companies to gain control over one another. Mergers and acquisitions are freely negotiated and carried out by the companies involved, except in case of public corporations or companies in certain regulated industries, such as electricity, telecommunications, banking, and insurance, in which it is mandatory to have the merger or acquisition approved by the pertinent regulatory agency.

Joint Ventures

Joint ventures in the Dominican Republic generally consist of a contractual arrangement between two or more existing business entities for the purpose of carrying out a particular project or task. The joint venture itself is not a legal person nor enjoys limited liability unless a new business entity is formed according to Dominican company law.

TAXATION

The main taxes affecting businesses in the Dominican Republic are income tax; capital gains tax; goods and services tax; excise tax; real estate tax and tax on company assets.

Withholdings at the source

The following disbursements made by companies are subject to withholdings: payment to employees; payments abroad; dividends; rentals; fees for services and commissions.

Anti-Avoidance Rule

Based on the substance over form doctrine, the Dominican Tax Code has a general anti avoidance provision through which the Dominican Internal Revenue Service (DGII) may ignore the existence of legal entities or certain transactions if used to secure an unwarranted tax advantage.

Transfer Pricing Rules

The Dominican Republic has established transfer pricing rules modeled on guidelines issued by the Organization of Economic Cooperation and Development (OECD).

These rules will apply when a resident company or individual enters into a commercial or financial operation with a related company, or companies or individuals that are domiciled in States or Territories with preferential tax systems (low or zero taxation) or blacklisted jurisdictions, regardless of whether they are related or not. Companies must file with the DGII an annual information return on transactions subject to transfer pricing

Foreign Accounts Tax Compliance Act (FATCA)

The Internal Revenue Service (IRS) of the United States and Dominican Republic’s DGII have an agreement to exchange bilateral financial and tax information as part of the Foreign Accounts Tax Compliance Act (FATCA) of 2010. The Dominican Republic and the United States have reached a reciprocal intergovernmental agreement (IGA) by which Dominican financial institutions report all FATCA-related information to DGII, which then report it to the IRS and vice versa.

Double Taxation Treaties

The Dominican Republic has signed and ratified two double taxation treaties: with Canada and Spain. The treaty with Canada only covers income taxes. The treaty with Spain deals with income and capital gains taxes only.

LABOR AND EMPLOYMENT

Legislation

Labor relationships in the Dominican Republic are governed by the Dominican Labor Code (Law 16-92), which is characterized by its strong protection of the rights of employees.

Dominican labor laws are territorial in nature. Any work carried out on Dominican soil is subject to the provisions of the Dominican Labor Code irrespective of the nationality or residence of the parties involved.

Dominican labor laws are mandatory to the parties in an employment contract and employees cannot waive any rights that would lessen their benefits under the Labor Code. Any such waiver is automatically considered null and void.

Employee Nationality

At least 80% of a company’s work force must be Dominican. Likewise, no less than 80% of the payroll, with the exception of salaries for technical or executive positions, must correspond to wages earned by Dominicans. These rules do not apply to employees carrying out executive or managerial duties, or occupying technical positions for which there is no available Dominican substitute.

Wages

Wages are freely negotiated between the employer and the employee but cannot be less than the minimum salary established by the National Salary Committee, a dependency of the Ministry of Labor, and vary according to business size or industry type. Gratuities or tips are not considered part of the salary.

Christmas Salary

In addition to a regular salary, every employee in the Dominican Republic receives, on or before December 20, a “Christmas salary,” equal to one-twelfth (1/12) of the total regular salary earned during the year excluding tips, overtime and benefits received from profit sharing. The Christmas salary is exempt from income tax.

Profit Sharing

Employers must share 10% of their annual pretax profits, if any, with their employees. If the company is profitable, payment to the employees must be made within a 90 to 120-day period after the end of the company’s fiscal year. Businesses in free trade zones, and agricultural, industrial, forestry and mining companies during the first three years of operation, do not have to share profits with their employees.

Termination

Termination implies a permanent break in the employment contract. Several types of termination are contemplated under the Dominican Labor Code. The most common being at will termination (desahucio); for cause termination by the employer (despido); for cause termination by the employee (dimisión); and termination due to incapacity or death of the employee.

Maternity protection

The Labor Code provides special protection for employees who are pregnant or have recently given birth. At will termination by the employer is strictly forbidden during the pregnancy of the employee and up to three months after the birth of her child. For-cause termination during a pregnancy nor within the six months following childbirth is allowed without the prior authorization of the labor authorities. Noncompliance is penalized with the equivalent of five months’ salary, in addition to the standard severance payment.

Withholdings by the Employer

Employers must deduct Income tax and Social Security from the wages of their employees and disburse them to the government within the first three days of the month following that in which wages were paid. The Dominican Social Security system contemplates three types of assistance: health insurance, occupational risk insurance and incapacity or retirement fund. The system is funded by a percentage of employees’ salaries made by both employee and employer contributions in established proportions.

Relocation of Foreign Workers

Depending on the time period an employee will be working in the Dominican Republic, companies wishing to relocate them to the country are required to obtain a temporary residency for work purposes which is renewable and issued for a one-year period, or a short-stay permit, granted for periods ranging from two to eleven months.

 

 

Sources: