Employer Of Record in Dominican Republic
We make it easy and painless to expand your business into Dominican Republic. Forget about dealing with local regulations, confusing tax laws and international payroll management. We take care of all that so you don't have to.
Accelerate your growth into Dominican Republic Compliantly and hassle-free
How we can help you expand in Dominican Republic
As your EOR in Dominican Republic we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.
Your candidate is hired by a PEO in Dominican Republic provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.
Expand to Dominican Republic with Serviap Global
Through our PEO and EOR services, you can hire qualified talent in your industry without the trouble of opening your own legal entity.
In just a few days, you can easily and safely build a presence in Dominican Republic, being sure that your staff will be hired in compliance with labor and tax regulations
Table of Contents
Dominican Peso (DOP)
The economyDominican Republic has the largest economy in the Central American and Caribbean regions. It’s been the fastest-growing economy in the Americas over the last 25 years, with an average GDP growth rate of 5.53%. From 2014 to 2015, its GDP growth was the highest in the entire Western Hemisphere. The economy here has become diversified in the last 30 years, expanding from a reliance on exports to include trade, mining, agriculture, manufacturing and services. Services actually account for nearly 60% of the country’s total GDP. This is thanks to advanced and robust transportation infrastructure and telecommunication system.
The importance of small and medium-sized companiesSmall and medium-sized companies (SMEs) play a vital role in the economy of Dominican Republic. In all, there are almost 20,000 SMEs in the country employing employ more than 500,000 workers, or 13% of the workforce. Combined with micro enterprises, they employ 54.4% of the country’s workforce, accounting for 27% of its total GDP.
Population CharacteristicsThere are roughly 10.8 million people who live in Dominican Republican, ranking it 13th in population size in Latin America and third in the Caribbean, behind only Haiti and Cuba. A little more than 30% of the country’s population lives in the metro area of Santo Domingo, which is the capital city. The country has a relatively young population, with 31.2% being under the age of 15 and only 6% over the age of 65 as of 2010. Spanish makes up the majority of the language spoken in the country, with 98% of the population speaking Spanish. Other minor languages spoken are French, English, Arabic and Italian. While Spanish is the main language in the country, English is spoken at an increasing rate, because of strong tourism from English-speaking countries.
Workforce costSome of them are:
- Dominican Republic is an attractive destination for commercial industry thanks to the cheap cost of labor compared to the United States. The average Java software developer in Dominican Republic earns the equivalent of $9,470 per In the United States, a Java developer earns on average nearly 10 times that amount—$95,513 per year.
- The overall workforce in Dominican Republican has grown almost 4% since 2000—almost four times more than the average for the OECD nations.
- Focus on education in advanced degrees such as tech are part of the reason for
Technological ecosystemOverall, the start-up ecosystem is growing in Dominican Republic. It ranks 78th out of 105 countries that are ranked globally. That said, it’s starting to grow thanks to angel investors and serial entrepreneurs. New investment in the start-up ecosystem has resulted in the launch of co-working spaces and incubators such as Labocaproject (located in Cabarete) and Coworking.do (in Santo Domingo). Digital Republic is a program launched by the government recently to create a stronger digital ecosystem in Dominican Republic as well.
Facilities for foreign investmentThe Dominican Republic government tries to make it easy for people to start a business in the country. The average amount of time it takes to open a business in the country (14.5 days) is nearly half the average for all of Latin America (30 days). Still, the country is ranked 109th out of 190 countries for the ease of doing business.
Santo Domingo, the Silicon Valley of the CaribbeanSanto Domingo, the capital and largest city in Dominican Republic, is becoming known as the Silicon Valley of the Caribbean, and for good reason. Investment in building the city as a tech hub started almost 20 years ago and is exploding now. At the center of this explosion is the Santo Domingo Cyber Park. It hosts more than 20 companies in the tech sector, many of which are start-up companies. This is leading to new ideas and innovation that the country hasn’t seen in its past. In total, the companies located within the Cyber Park employ more than 2,000 people. The center also hosts smart homes and research labs. Right across the street is the Technological Institute of the Americas, a hub for innovation for companies that focus on biotech, blockchain, drones, 3D printing and virtual reality. The growth of the tech sector in Dominican Republic can be attributed to the dedicated partnership between the government and the private sector.
Facilities for Foreign InvestmentThe Dominican Republic government tries to make it easy for people to start a business in the country. The average amount of time it takes to open a business in the country (14.5 days) is nearly half the average for all of Latin America (30 days). Still, the country is ranked 109th out of 190 countries for the ease of doing business.
Business culture in Dominican RepublicPeople work a lot. It’s not uncommon for people in the Dominican Republic to work up to 12 hours a day. They sometimes even work seven days a week. Appearance is important. Dominicans are very hip on fashion, and they like to dress well. As such, it’s important that you maintain appropriate attire for all business discussions. Business is formal. Business etiquette in the Dominican Republic is very formal. This doesn’t just go for how you dress, either. Dominicans expect you to be well-prepared for business meetings. Be prepared to negotiate. It’s customary to negotiate all business deals in the country. Dominican people like to negotiate so that there’s a fair outcome for all sides in the business deal. Conversations get loud Dominicans are often very direct and express themselves loudly. They are not being disrespectful, even if it comes off that way.
Dominican Gastronomy: regional and traditional cuisinesLunch is the main meal in the Dominican Republic. A common dish is a large plate of beans and rice accompanied with chicken or another meat, avocado on top of a salad, and fried plantains. Food in the Dominican Republic is very regional, with each region having its own local specialty that’s influenced by what’s available there. In the Samana region, seafood is cooked along with coconut, as is traditional in the Afro-American influence of the region. Goat meat is one of the staples of the northwest region of the country. The central mountain region is known for roadside restaurants that specialize in grilled meats. Fish is ultimately the primary staple of all Dominican cuisine, as it is throughout the Caribbean. Red snapper is a local delicacy, and it’s often served whole and fried along with avocado and tostones.
|Num. States / Province||31 Provinces|
|Principal Cities||Santo Domingo, San Felipe de Puerto Plata Concepcion de la Vega|
|Local Currency||Dominican peso (DOP)|
|Thousands Separator Format||999,999,999,99|
|Country Dial Code||+1-809, +1-829, +1-849|
|Time Zone||Atlantic Standard Time (UTC -4)|
|Border Countries||West: Haiti|
|Continental surface||48,670 km2 (131rd)|
|Tax Year||January 1st to December 31st|
|Minimum Wage||• 8,310 DOP per month in Free Trade Zones • 7,843-12,873 DOP per month outside (depending on size of company) • 5,884 DOP per month for public sector • 234 DOP per day for farm workers (10-hour worday) • 146 DOP per day for sugar can workers (8-hour work- day)|
|Tax Payer Identification Number Name in the country||Cédula or Cédula de Identidad y Electoral|
|Current President||Luis Abinader|
Laws that regulate labor relationships
|Constitution of Dominican Republican||The supreme law that governs economic, social and political life in Dominican Republic. It was last revised in 2015.|
|Labor Code (Law No. 16-92)||Administered by the Ministry of Labor, this code verifies compliance to the provisions. Labor courts have jurisdiction over disputes and/or conflicts. Very protectionist to workers.|
|Tax Code (Law No. 11-92) Codigo Tributario and its Reglamentos||Tax law is territorial in the country. It taxes all income from business activities or work in the country, whether the person is a resident of the country or not. Corporations pay a flat income tax of 25% on their net taxable income.|
|Social Security||Social Security is a pay-as-you go system for insurance that covers workers in the private sector. It is, however, being phased out in the country and has been closed to new entrants.|
Key Tax and Labor Authorities
|DGII (Dominican Internal Revenue Agency)||The institution responsible for administering and collecting internal fees and taxes within the Dominican Republican. It was formed by a 1997 law that merged the General Directorates of Internal Revenue and Income Tax.|
|SDSS (Dominican System of Social Security)||Regulates and develops duties and rights of citizens and the state that concern money to protect residents against risks of disability, old age, unemployment and occupational hazards.|
|Contracts||Labor law doesn’t require a written employment agreement for permanent employment. Employers only must list employees in their workbooks with the local tax authorities, report all wages paid, and pay Social Security. If written contracts are signed, all changes must be done via changes in writing. It also must be in Spanish.|
|Fixed-term||Employment contracts are indefinite unless the nature of services requires only a fixed term or specific services. A written employment is required for fixed-term work.|
|Trial Period||There’s no trial period in the Dominican Republic. However, during a person’s initial three months of employment, the contract is allowed to be terminated without any additional obligations to the employer.|
Basic RequirementsEstablished by Law No. 16-92, the Labor Code dictates contracts must contain:
- Marital status
- Address of the worker
- Address of the employer
PayrollPayroll laws dictate what employers can and can’t do in relation to paying their employee wages. It also provides employees with various protections in terms of wages and rights
Law Benefits in Dominican RepublicThese benefits are laid out to dictate the relationship between the employee and employer. These benefits are independent of the salary and may be of a medical, cultural, or economic nature. Some of these benefits are mandatory by law of the land, while others are optional at the discretion of the employer.
|Minimum Wage National Salary Committee of the Ministry of Labor||Minimum wage is established so that all employees can cover all fundamental expenses to live a decent life.|
|Wages Articles 192, 193, 192 and 211||• Wages can’t be below the minimum wage established in the country. • They must be paid out in cash. • Intervals between payments of salary can’t exceed one month.|
|Overtime Article 203 and 204||• Overtime has to be paid for every hour worked above the weekly limit of 44 hours. It’s paid at 135% of an employee’s normal hourly wage. • Hours in excess of 68 per week are paid at 200% normal hourly wage • Night hours are paid at 15% additional rate.|
|Christmas Salary Articles 220 and 222||• Every employee in the country receives a “Christmas salary” equal to 1/12 of their total salary earned during the year. • The maximum paid out is five times minimum wage, but many employers waive the limitation on maximum. • It is exempt from income tax.|
|Profit Sharing Article 223||Employers have to share 10% of net profits with the employees. This can be capped at various levels, depending on how long the employee has worked at the company.|
|Vacations Articles 177, 181 and 182||• Employees must get at least 14 working days of paid vacation every year. Employees gain this benefit after being on the job for one year. • After five years at a company, that must increase to 18 working days a year. • Vacations can’t be split up into periods of less than a week, and can’t be replaced by other form of compensation.|
|Leaves of Absence Article 54||Employees have the right of paid absences for the following things: • Marriage: 5 days • Death of parent, grandparent, spouse or offspring: 3 days • Wife or companion giving birth: 2 days • Maternity leave: six weeks before and after birth of child|
Employers Contribution or Labor CostEmployers are subject to taxes and other costs for having employees. Employers cannot recover these costs.
|Income Tax Article 307||Employers have to withhold income taxes from the salaries of their employees, to be paid to taxing authorities. Only salaries higher than 20,000 Dominican pesos/month must be withheld.|
|Social Security Law No. 87-01||• This is insurance for labor and health risks, as well as a retirement/incapacity fund that’s funded by both the employee and employer. • Health Insurance: 3% employer contribution • Labor Risk Insurance: 1.25% employer contribution • Incapacity/Retirement Fund: 2.88% employer contribution|
Types of DisabilitiesThe Dominican Republic has various laws that protect people with temporary and permanent disabilities. It protects workers who are disabled from being treated unfairly by employers. It also provides disabled people with the right to obtain a permanent or fixed occupation that’s similar to that of all other workers. The country’s Labor Code says disabled people can qualify for work based on their specific ability to perform the duties of the specific job, regardless of what their disability is. Disabled people aren’t, however, given special privileges because of their condition. Employers must provide reasonable access for disabled people. Discrimination is prohibited based on a number of factors, including disability and religion.
Maternity LeaveUnder the Labor Code (Articles 231, 232, 236, 240 and 243), employers must provide special protection to any employee who is pregnant or who has given birth recently. Employers cannot terminate such employees during their pregnancy and for up to three months after they give birth. If they do so without giving a just cause, they must pay the employee five months’ salary in addition to the country’s standard severance. Paid maternity leave is given for six weeks preceding the projected birth date, plus six weeks following that date. Employees also have the right to a rest period of 20 minutes for each workday so they may breast feed their child.
Public HolidaysThe Labor Code provides for public holidays that are observed in Dominican Republic:
|January 1st||New Year’s Day|
|January 6th||Three King’s Day|
|January 21st||Day of the Virgin of Altagracia|
|January 26th||Birthdate of Juan Pablo Duarte|
|February 27th||Independence Day|
|Variable in March or April||Good Friday|
|Variable in May or June||Corpus Christi|
|May 1st||Labor Day|
|August 16th||Restoration Day|
|September 24th||Day of the Virgin of Mercedes|
|November 6th||Constitution Day|
Employee TerminationThe Labor Code outlines rules for termination of an employment contract:
|Type of Termination||Minimum Days of notice|
|At Will Articles 75, 76, 79 and 80||• Any party to the contract can terminate it without needing to specify a cause. • Terminating party has to give 7, 14 or 28 days of notice of the decision (depending on whether the agreement has been in place for 3, 6 or 12 months).|
|For Cause Articles 87, 88, 90, 91, 93 and 94||• Employers can terminate employees who engage in spe-cific causes. • Employers must provide evidence of the grounds for the termination. • Employers must provide written notice of this to the Department of Labor within 48 hours of dismissing the employee. • Employees can resign for cause, but must provide evi- dence for the grounds.|
|Length of Employment||Severance Amount|
|3-6 months||6 days salary|
|6-12 months||13 days salary|
|1-5 years||21 days for every year employed|
|More than 5 years||23 days for every year employed|
Your one-stop global hiring solution. Secure, reliable, compliant
No matter how big or small, we are ready to answer all your questions- anytime, anywhere.
Our team of in-country experts help you navigate new markets and cultural nuances
Top-tier Benefits Packages
Great talent deserves great benefits. We offer a competitive range of benefits so that you only attract top-tier talent worldwide.
You remain 0% liable
Shift the worry from your shoulders to ours! We stay on top of regulations so you’re always 100% complaint with local laws