Business entities in Dominica in 2023
Healy Consultants will assist our Clients with incorporating the optimal corporate structure in the Commonwealth of Dominica. There are several ways of doing business in Dominica, and the preferred corporate vehicle for most local entrepreneurs is the private limited liability company. However, due to the small market size, many investors are attracted to the island in order to set up an offshore company (Dominican IBC). Other corporate vehicles in Dominica include i) the public limited company (PLC) and ii) branches of foreign companies (external companies).
Offshore company (Dominica IBC)
- The Dominica International Business Company is the most preferred corporate structure used by investors looking to conduct offshore businesses in or through Dominica. An IBC must appoint at least 1 director and 1 shareholder of any nationality to complete incorporation. The director and shareholder can be an individual or a body corporate and can be domiciled in any country. Additionally, a US$100 authorized share capital is also required when incorporating an IBC;
- A company secretary is not mandatory when incorporating an IBC. This entity is exempt from all taxes in Dominica for a period of 20 years from the day of its incorporation. Therefore, Dominican IBCs receive a free benefit in the form of a guarantee similar to that given by the Cayman Islands tax exemption certificate, which costs US$1,830.
The Dominica private limited liability company
- The Dominican private limited company is commonly used by entrepreneurs seeking to establish a local SME in the Commonwealth of Dominica. An SRL must have at least 1 shareholder and 1 director, who can be of any nationality. The shareholders can be individual persons or corporate bodies, but corporate directors are prohibited for this company type.
- Unlike the IBC, private limited companies in Dominica can issue shares with no par value. Therefore, a company may be incorporated with a single share and no capital if the company is not in a regulated industry;
- A Dominican private company must produce consolidated financial statements, but does not require an auditor;
- All companies must appoint a company secretary, who may either be an individual or a corporation. The company secretary need not be resident within the Commonwealth of Dominica, and if the company has a single director then the director is disqualified from holding the position of secretary.
The Dominica public limited company (PLC)
- The Dominica PLC requires at least 3 directors of any nationality;
- As with the private limited company, there is no par value for shares, with no minimum issued capital;
- Public companies have the same requirement for a company secretary as private companies;
- A PLC must also appoint a statutory auditor with the mandate to check the company’s accounts for a period of one year from the day of its formation. In addition, Dominican public companies must have an audit committee to oversee this process, although the government will grant an exemption to this rule on application.
Branch of foreign company (external company)
The Dominica’s Companies Act allows foreign entrepreneurs to set up branches of their foreign companies in Dominica. A branch can be 100% foreign owned. When setting up the branch, an investor must file with the companies registrar the scope of operations for this entity and the business the company will carry on in Dominica. A branch must appoint at least 1 local representative with full power of attorney to manage the local business.
Dominica representative office
Representative offices are not recognised in Dominica. Instead, a private limited company or external company structure should be used to carry out the activities planned by the representative office, such as i) conducting market research ii) promoting the parent company’s activities in Dominica iii) conducting feasibility studies.
Table of comparison between Dominica entities
LLC PLC Offshore Branch Rep office Also known as: SRL PLC IBC External company Rep. office How long to set the company up? 2 weeks 4 weeks 2 weeks 3 weeks 2 weeks How long to open company bank account? 4 weeks 4 weeks 4 weeks 4 weeks 4 weeks Legal Liability? Limited Limited Limited Limited Unlimited Wholly foreign owned? Yes Yes Yes Yes Yes Minimum share capital? US$1 US$1 US$100 US$1 US$1 File annual tax return? Yes Yes No Yes No Tax registration certificate required? Yes Yes Yes Yes No Recommended corporate bank account? National Bank of Dominica RBC Royal Bank First Caribbean International Bank Scotia Bank BFC Bank Does our Client need to travel? No No No No No Resident director required? No No No No No Resident shareholder required? No No No No No Minimum directors allowed? 1 3 1 1 1 Minimum shareholders? 1 1 1 1 1 Tax Identification code needed? Yes Yes Yes Yes No Dominica resident company secretary required? Yes Yes No Yes No Corporate shareholders allowed? Yes Yes Yes Yes Yes Corporate director(s) allowed? No No Yes Yes No Dominica corporate tax rate? 28% 28% 0% 28% 0% Annual financial statements required? Yes Yes No Yes No Statutory audit required? Yes Yes No No No Regulated by? CIPO CIPO CIPO CIPO CIPO Allowed to issue sales invoices? Yes Yes No Yes No Allowed to sign contracts? Yes Yes No Yes No Allowed to import and export goods? Yes Yes No Yes No Can rent an office space in Dominica? Yes Yes Yes Yes Yes Can buy Dominica property? Yes Yes Yes Yes No Can own equity in other Dominica companies? Yes Yes No Yes No