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Benefits of Making Business in Dominican Republic | Buy & Sell Business

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Benefits of Making Business in Dominican Republic | Buy & Sell Business

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  1. BENEFITS OF MAKING BUSINESS IN THE DOMINICAN REPUBLIC WWW.MERGERSCORP.COM

  2. At MergersCorp M&A International we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction. It is our goal to make the process of either buying a new business or selling your current business as smooth and efficient as possible. We know how important confidentiality is to our sellers and we treat it with the utmost importance. WWW.MERGERSCORP.COM

  3. BENEFITS OF MAKING BUSINESS IN THE DOMINICAN REPUBLIC WWW.MERGERSCORP.COM

  4. Country Overview Destination Dominican Republic on the island of Hispaniola. The country is bordering the Atlantic Ocean to the north and the Caribbean Sea in south. Hispaniola is home to the independent nations of Haiti in west and the Dominican Republic, which occupies the eastern part. The nation covers an area of 48,310 km² making the Dominican Republic slightly smaller than Slovakia or about the size of the U.S. states of Vermont and New Hampshire combined. The country has a population of 9.9 million people (in 2015). Capital and largest city is Santo Domingo. Official language is Spanish. Main religion is Christianity with the majority of Roman Catholicism (78% of the population). Nearby to Hispaniola island are the Caribbean Turks and Caicos Islands to the north, Puerto Rico to the east, Cuba and Jamaica in the west. The Dominican Republic forms the eastern two-thirds, and Haiti the remainder of the Hispaniola island, formerly known as Santo Domingo.In pre-columbian times the island was inhabited by Tainos, an Arawak-speaking people. In 1492 C. Columbus discovered the island and claimed it immediately for the Spanish Crown. It was then occupied by the usual ruling forces of that time, the Spanish and the French.

  5. Executive Summary The Dominican Republic still has a large rural population, accounting for nearly half of the total, but growing numbers have moved to cities and towns since the mid-20th century. In rural areas some settlements exist as well-defined villages, but most take the form of scattered neighborhoods, typically clustered around a small store or church or stretched along a roadside, with cultivated patches behind the houses. In addition, there are still many households so isolated from roadways that they can be reached only on foot or horseback. Once ruled by Spain, the Dominican Republic shares the island of Hispaniola with Haiti, a former French colony. The Caribbean nation is a major tourist destination. This, coupled with free-trade zones, has become the country's major employer and key sources of revenue, replacing dependence on sugar, coffee and other exports. The Dominican Republic is inhabited mostly by people of mixed European and African origins. Western influence is seen in the colonial buildings of the capital, Santo Domingo, as well as in art and literature. African heritage is reflected in music.

  6. Introduction – Doing business in The Dominican Republic The Dominican Republic is the second largest country in the Caribbean region by area. Tourism, agriculture, mining and textiles are among the key sectors of the economy making it an attractive location to start your business. But, there can be challenges if you don't know the specifics of the local processes. In the Dominican Republic, there are four types of entities that you may choose for your business, a Limited Liability company, Individual Enterprise of Limited Liability company, a Joint Stock company or a Simplified Joint Stock company. In the Dominican Republic, there are four types of entities that you may choose for your business, a Limited Liability company, Individual Enterprise of Limited Liability company, a Joint Stock company or a Simplified Joint Stock company. The most common type of entity is a limited liability company. A SRL must have at least two members and at most 50 members. The liability of the members is limited to their capital contribution. A minimum capital of DOP 100,000 at least 1% of which must be paid-in at the time of incorporation.

  7. Conducting business in The Dominican Republic The Dominican Republic offers multiple business and investment opportunities as a result of a variety of factors, including its unique geographical location, current legal framework, economic stability, and infrastructure. Having recognized that the Dominican market depends on international economic integration, the Dominican government has opted to create a solid legal foundation that allows for sustained economic stability and growth as well as assures freedom and security to the economy’s different participants when commercializing goods and services. There are two ways to enter and do business in the Dominican Republic: By establishing a separate Dominican business entity (“subsidiary”) or by registering a branch of a foreign company (“branch”). In addition, business relationships may be set up under a commercial contract in form of a joint venture, agency, distribution or similar agreements that comply with Dominican Republic legal and regulatory requirements, for the recognition and validity of business entities and commercial agreements.

  8. Taxation in The Dominican Republic The Dominican Constitution states that the National Congress is empowered to levy taxes. Taxes will be collected and administered by the Dominican Government through the General Directory of Internal Taxes. Capital gains derived from the disposal of capital assets located in the Dominican Republic, whether the sale is of an occasional nature or otherwise, are subject to a 27% tax. Rates – Progressive rates ranging from 15% to 25% apply, depending on the amount of net taxable income.. Dominican-source income is subject to tax, while foreign-source income is generally not. However, residents are subject to taxation on foreign investments and financial gains. In the case of individuals who become residents, this foreign-source income is taxed only after the third year. Personal Income Tax Rate in Dominican Republic averaged 25.60 percent from 2004 until 2018, reaching an all time high of 30 percent in 2006 and a record low of 25 percent in 2005.

  9. Trade The Dominican Republic is the 88th largest export economy in the world and the 74th most complex economy according to the Economic Complexity Index (ECI). In 2017, the Dominican Republic exported $8.73B and imported $16.7B, resulting in a negative trade balance of $7.99B. In 2017 the GDP of the Dominican Republic was $75.9B and its GDP per capita was $16k. The top exports of the Dominican Republic are Gold ($1.5B), Rolled Tobacco ($758M), Low-voltage Protection Equipment ($510M), Knit T-shirts ($472M) and Medical Instruments ($434M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($1.67B), Cars ($815M), Petroleum Gas($786M), Crude Petroleum ($381M) and Broadcasting Equipment ($337M). The top export destinations of the Dominican Republic are the United States ($3.64B), Canada($863M), Haiti ($830M), India ($594M) and Germany ($197M). The top import origins are the United States ($7.02B), China ($2.26B) , Mexico ($806M), Brazil ($616M) and Spain ($561M).

  10. Banking in Dominican Republic BanReservas In terms of assets, BanReservas is the largest of the banks in the Dominican Republic. Founded in 1941, the bank provides personal and business banking solutions. In 2016, finance magazines Latin Finance, World Finance, and The Banker named BanReservas as Dominican Bank of the Year. In 2017, finance magazine Euro money recognized BanReservas as the Best Bank of the Dominican Republic. Banco Popular Dominican Established in 1963, Banco Popular Dominicano (BPD) provides a range of financial solutions, including savings, checking, loans, insurance, and investments to over two million customers. It offers personal accident and life insurance through its banc assurance services. Headquartered in Santo Domingo, it operates the largest network of the banks in the Dominican Republic, with more than 200 branches. Banco BHD Leon One of the largest banks in the Dominican Republic is Banco BHD Leon, which was established in 1972. The bank holds a 19% market share and provides a range of banking products through more than 133 branches and over 545 ATMs across the country.

  11. Our M&A Process NEGOTIATION & CLOSE POST MERGER INTEGRATION (PMI) INTEGRATION (PMI) POST MERGER TARGET APPRAISAL APPROACH DUE DILIGENCE Key Areas  Target & market analysis;  Initial assessment of synergies & value drivers;  Indicative valuation;  Go or No-Go decision;  Preparation of transaction documents (NDA – Non- disclosure Agreement/LOI- Letter of Intent);  Select Transaction team;  Appoint advisors;  Consider funding ability.  Initial approach letter;  Signing of NDA;  Prepare & share initial information requests;  Formulation of LOI (Letter of Intent) & possible negotiations;  Initial meeting and Q&A;  Circulate information on the Target to the Transaction team.  Set scope of due diligence;  Set up VDR (virtual data room);  Coordinating of due diligence, further meetings and Q&A sessions;  Consider points relevant to the Post-Merger (PMI) phase;  Revisit indicative valuation & prepare detailed valuation based on due diligence findings;  SPA negotiations with the seller;  Development of final structure (share/asset deal) and final valuation;  Approvals;  Signing of SPA & Close.  Consider the extent of integration;  Development of 100 Day PMI Plan;  Consider short & long term objectives;  Estimate requirements to capture synergies;  Determine resource needs & optimal allocation. Parties Involved  CFO;  Head of M&A;  Accountants;  Corporate finance advisors;  Consultants.  Senior management;  CEO, CFO, CTO;  Strategy director;  Head of M&A;  Head of Business Development;  Consultants.  Company general counsel;  Lawyers;  Senior management.  Company general counsel;  Lawyers;  Senior management/HR. 11 © Midaxo 2018 www.midaxo.com

  12. Looking to Buy or Sell a Business? CONTACT US NOW FOR A FREE BUSINESS VALUATION WWW.MERGERSCORP.COM

  13. MergersCorp.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Member firms of the MergersCorp network of independent firms are affiliated with MergersCorp International. MergersCorp International provides no client services. No member firm has any authority to obligate or bind MergersCorp International or any other member firm vis-à-vis third parties, nor does MergersCorp International have any such authority to obligate or bind any member firm. Copyright © 2020 MergersCorp International. All rights reserved. 13 © Midaxo 2018 www.midaxo.com

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