Dominica Company Formation

The Commonwealth of Dominica (not to be confused with the Dominican Republic) is located in the Eastern Caribbean offers attractive offshore formation opportunities for potential foreign individuals and companies. Dominica currently offers a broad range of offshore services, the most popular product being the International Business Company (IBC), also known as an offshore company or a non-resident company.

The International Business Companies (IBC) Act passed in 1996 offers progressive legislation with a flexible structure and formation process. Since then, Dominica has experienced rapid growth in the offshore sector due to its liberal legislation, quick incorporation procedures and low government formation fees. The Dominica IBC offered individuals fully tax exempt status, with zero obligations on financial reporting and low fixed annual fees for licensing. However, from January 2019, all IBCs incorporated in Dominica became taxable by the Dominican government (a whole 30% corporate tax on worldwide income)
As an offshore jurisdiction, Dominica is quickly becoming one of the world leaders in offshore business services as well as Dominica's second passport opportunities. It’s unfortunate that Dominica being a tax haven is one for the history books.

For more information on the Advantages of Dominica as an Offshore Financial Center, click here.

For tailored assistance in establishing your Dominica IBC and navigating the incorporation process, Offshore Protection offers expert services to help you take advantage of Dominica's offshore opportunities while ensuring full compliance.

Advantages Dominica Offshore Company

There are a number of advantages given to individuals and companies who choose to incorporate in Dominica, including:

• Flexible requirements - With respect to capitalization, shareholders, directors and shares of the company
• Efficient business regulations - Fast incorporation, straightforward registration procedures, no limitations to the share capital value and currency, no requirements of minimum paid-up capital
• No financial reporting requirements -  Financial statements are not made available to the public
• Flexible legislation - Allows for multiple uses of a Dominican offshore company
• High Confidentiality and Privacy - Names of directors and shareholders are not made public. Additionally, nominee shareholders and directors are also available in Dominica, providing yet another layer of privacy
• Asset security and protection - Maintained via provisions that restrict seizure, expropriation or confiscation of assets by foreign authorities or creditors

Dominica’s offshore jurisdiction enables companies and individuals to take advantage of numerous other benefits including:

• Political and economic stability
• Absence of exchange, currency and capital controls
• Modern and simple incorporation laws and procedures
• Excellent communications and transportation systems
• Superior banking and professional services
• An English Common Law System
• English speaking country
• Minimum disclosure requirements
• Currency diversification
• Limiting personal liability
• Reduction in transaction costs

Top Uses

Due to Dominica’s progressive IBC legislation, incorporation procedures are both easy and flexible, making an IBC a useful tool for many different business activities.

The formation of an IBC can be made for any legal purpose and for any legal activity, except for the banking and insurance sectors. An IBC can be used for any commercial enterprise, including but not limited to:

• Offshore savings and investments
• Manufacturing
• Transportation
• Trade and distribution
• Forex and stock trading
• E-commerce
• Professional service company

In order to carry out certain activities, proper licensing is required for:

• Online casino and other online gaming
• Ship management and other maritime operations
• Owning and lease of yacht and vessels

Note that an IBC cannot conduct business with individuals residing in Dominica, own real estate in Dominica, accept banking deposits, or accept insurance contracts.

Understanding Dominica's Business Environment

Dominica offers a supportive environment for establishing a business, characterized by a legal framework aligned with the Commonwealth of Dominica's pro-investment policies. The nation's economic landscape is equally important, providing a stable backdrop conducive to business growth.

Legal Framework

The Commonwealth of Dominica's Companies Act underpins the legal structure for business operations within the country. This key piece of legislation outlines the procedures for the formation, registration, and management of companies. Foreign entrepreneurs can establish businesses as limited liability companies, corporations, or partnerships. Additionally, the International Business Companies (IBC) Act facilitates the quick formation of offshore companies, promoting financial privacy and offering tax incentives, like zero taxes on income derived outside of Dominica.

Economic Landscape

Dominica's economic landscape is shaped by its strategy to attract foreign investment and encourage local entrepreneurship. The government's investment in sectors such as tourism and agriculture contributes to a dynamically evolving economy. The country's Invest Dominica Authority serves as a resource for investors, offering guidance on the regulatory requirements for conducting business. They also ensure a streamlined process for setting up operations, enhancing Dominica’s appeal as a viable location for both local and international investors.

Types of Business Entities in Dominica

In Dominica, entrepreneurs have several options when it comes to the type of business entity they can set up. The choice of the legal structure is dictated by factors including the nature of the business, the number of owners, tax considerations, and liability preferences.

International Business Company (IBC)

An International Business Company (IBC) is a corporate structure that is designed for engaging in international business activities. They offer flexibility in that they are exempt from local corporate taxation provided their income is generated outside of Dominica. This makes an IBC a favorable option for those looking to maximize tax efficiencies.

Limited Liability Company (LLC)

A Limited Liability Company (LLC) in Dominica combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. LLCs are suitable for small to medium-sized businesses as they provide a level of protection to owners' personal assets from the company's liabilities, debts, and obligations.

Sole Proprietorship

A sole proprietorship is a business owned and operated by a single individual. This form of business entity is the simplest and requires relatively less paperwork and cost to establish. The owner is entitled to all profits, but is also personally liable for all business debts, liabilities, and legal actions.

Partnership

In Dominica, a partnership is a business structure in which two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor, or skill. In return, each partner shares in the profits and losses of the business. There are general partnerships and limited partnerships, the latter allowing for partners to have limited liability.

Company Registration Procedures

Setting up a company in Dominica involves a structured registration process at the Companies Registry. A Certificate of Incorporation is key for legitimizing the business entity.

Preparing Incorporation Documents

Entities must prepare a set of required documents before they can formally register. These incorporation documents typically include:

• Application for incorporation
• Articles of Association
• Memorandum of Association
• Details of directors and shareholders
• Registered office address in Dominica

They should ensure that the company name is unique and adheres to Dominica's regulations.

Filing with the Companies Registry

Once all incorporation documents are ready, the entity must file them with the Companies Registry. This step formally registers the company under the applicable laws of Dominica. The required documents must be filed either in person or through postal mail, along with the prescribed fees.

Obtaining a Certificate of Incorporation

After the Companies Registry reviews and approves the documents, the entity is issued a Certificate of Incorporation. This certificate serves as legal proof that the company exists and is registered in Dominica. The time frame for obtaining this certificate can vary, and expediting options may be available for an additional fee.

Creating a Corporate Structure

In setting up a company in Dominica, it's essential to carefully establish the corporate structure. This includes designating shareholders and directors, determining share values, and drafting the necessary constitutional documents.

Determining Shareholders and Directors

The foundation of a corporate structure involves determining who the shareholders and directors will be. In Dominica, a company must have at least one director and one shareholder, which can be the same person. There is a flexibility in ownership, allowing both local and foreign shareholders. The directors are responsible for the company’s governance and adherence to the law.

Setting Par Value of Shares

The par value of shares is the minimum stated value and should be specified during the incorporation process. In Dominica, the par value is important because it determines the lowest price shares can be issued. Setting a par value is a strategic decision as it can affect initial capital and how shares are marketed to potential investors.

Drafting Constitutional Documents

Constitutional documents, such as the Articles of Association, outline the company’s governance structure and regulations. These documents are a legal necessity and specify the roles and responsibilities of directors and the rights of shareholders. They also include the company’s objectives and the distribution of profits. A company in Dominica must also appoint a company secretary, who is responsible for ensuring that the company complies with legal and regulatory requirements.

Compliance and Legal Obligations

When setting up a company in Dominica, it is crucial to understand and adhere to the necessary compliance and legal obligations. This includes appointing a registered agent, maintaining proper accounting records, and ensuring timely filing of annual returns. Each of these elements plays a vital role in the legal operation of a company in Dominica.

Appointing a Registered Agent

In Dominica, companies must appoint a registered agent who is responsible for receiving and managing legal paperwork on behalf of the company. The agent must be:

• Located in Dominica.
• Listed in the company's registration documents.

Maintaining Accounting Records

Companies are required to keep accurate and up-to-date accounting records. These records should reflect all financial transactions and must be:

• Kept for at least seven years.
• Available for inspection by the Inland Revenue Division.

Filing Annual Returns

Filing annual returns is a statutory requirement for companies in Dominica. Compliance includes:

• Submitting returns to the Inland Revenue Division yearly.
• Ensuring payments to the Dominica Social Security are up-to-date, as applicable.

Financial Considerations

When setting up a company in Dominica, it is important for an entrepreneur to consider the various financial implications, such as understanding the local tax system, establishing a corporate bank account, and maintaining accurate financial statements.

Understanding the Tax System

Dominica offers significant tax advantages for businesses, especially with the establishment of International Business Companies (IBCs). IBCs benefit from zero taxes on income, profits, inheritance, and capital gains. However, non-IBC entities must navigate a different tax landscape. They must account for corporate income tax, which is assessed on worldwide income. Additionally, there is no value-added tax (VAT) for IBCs, but other business types should factor in VAT obligations in their financial planning.

Setting Up a Corporate Bank Account

A corporate bank account is essential for operations and is typically set up after the company incorporation is complete. Potential fees associated with opening a bank account should be inquired about beforehand, as banks in Dominica may vary in their fee structures. It is advisable to compare services and fees across multiple banks to make an informed decision tailored to the company's specific financial needs.

Managing Financial Statements

Companies in Dominica are required to maintain proper financial statements. The level of detail and complexity will depend on the company's size and the applicable laws governing their operation. Accurate financial statements are crucial for comprehensive financial analysis and for adhering to regulatory requirements. Regular audits, though not mandated for all business types, can be a valuable tool for companies looking to ensure financial compliance and transparency.

Protecting Privacy and Confidentiality

When setting up a company in Dominica, particularly a Dominican International Business Company (IBC), protecting privacy and confidentiality is a foundational pillar. Dominica offers robust legal frameworks to ensure that the identity of business owners and the details of their enterprises remain shielded from public scrutiny.

Confidentiality Laws

Dominica's corporate structure laws are designed to ensure that the confidentiality of IBC owners is rigorously maintained. The names of shareholders and directors are not required to be filed on any public record. The information filed with the Dominica Companies Registry is restricted to the company’s registered agent, the company's name, and its registered office. This practice provides a level of anonymity for individuals and corporate entities involved in a Dominican IBC.

• Key aspects of confidentiality in Dominica include:
  • No public disclosure of shareholders and directors
  • Registered agent holds all the confidential records
  • Transactions and business activities conducted by IBCs enjoy strong privacy protection

Data Protection Regulations

Dominica is also committed to data protection, although its regulatory environment may not be as expansive as some jurisdictions. It ensures that the collection and use of personal and corporate information must adhere to certain standards, where applicable. As with many offshore financial centers, the emphasis remains highly on privacy, which extends to the safeguarding of information against unauthorized access.

• Considerations under data protection:
  • Application of data protection laws if they align with the business operation
  • Procedures to prevent unauthorized data disclosure
  • Mechanisms for secure data handling, catered towards maintaining the IBC’s confidentiality

It's essential for companies to be aware of the confidentiality and data protection provisions in place and leverage them appropriately while conducting business through a Dominican IBC.

How to Setup a Company?

There are very few requirements in order to set up a Dominica IBC:

• A single individual can set up an Dominica IBC with just one director and one shareholder to set up an offshore company (the director can be the same person as the shareholder)
• Certified copy of identification pages of passport
• Police clearance certificate

Document Requirements to Incorporate

In order to set up a Dominica company, a few documents will be needed:

1. Register and secure the name of the proposed company
2. Memorandum and Articles of Association
3. Certificate of Incorporation
4. Appointment of a company director(s)
5. Registry of members and directors
6. Share Certificate(s)

The Companies and Intellectual Property Office (CIPO) is Dominica's national registry for companies and intellectual property. It registers and maintains records related to intellectual property, companies, business names, and IBCs in Dominica.

Corporate Taxation

Individuals and companies interested in establishing a Dominica offshore IBC benefit from a number of tax incentives including:

• There are no exchange controls on the movement of funds by IBC's and there is unrestricted operation of bank accounts

From December 31, 2021, IBCs are subject to a 30% income tax on their global income.

Corporate Details

Privacy

The IBC Act makes it an offense for anyone to reveal any information regarding a Dominica corporation, except under criminal investigations through a court order. The affairs of any offshore IBC can only be looked into when its principal is found guilty of a crime in his/her country of residence and only if that offense is deemed criminal in the offshore jurisdiction had the same act been committed there.

Unauthorized disclosure of information about a Dominica IBC is a crime punishable by a $25,000 fine and up to 2 years in prison, according to the IBC Act of 1996.

Tax Treaties and exchange of information

Double Taxation Treaties have been signed with:

Switzerland, Antigua and Barbuda, Barbados, Belize, Grenada, Guyana, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago, Australia, Belgium, Canada, Denmark, Faroe Islands, Finland, Greenland, Iceland, Netherlands, New Zealand, Norway, Portugal, Sweden, UK, and USA.

Exchange controls

There are no foreign exchange controls and the US dollar is allowed to circulate freely throughout the economy.

Type of Law

Dominica’s legal system is based upon British Common Law.

Principal Corporate Legislation

• International Business Companies (IBC) Act 1996

• Companies Act 1994

Other Offshore Legislation

• International Exempt Trust Act 1997

• Offshore Banking Act 1996

Restrictions to Business Activities

An IBC is restricted from conducting business in Dominica as well as any activities that include real estate banking, trust, or in insurance sector unless the appropriate license is granted.

Corporate Business Relations Allowances

• Make and maintain deposits in Dominica

• Engage professional services in Dominica

• Hold shares, debt obligations or other securities in a company owned by a resident, locally registered company or one incorporated through the Local Companies Act.

Powers of Company

An IBC is given all rights, powers and privileges of an individual.

Name Restrictions

Restricted names are any that suggest the patronage of the Royal Family, the government, political party, university, professional association, or any names that may considered to be objectionable or that have already been taken.

When choosing a company name in Dominica, it must not:

• Match an existing registered name
• Imply government association without approval
• Relate to any political party or leader
• Mislead about the company's workforce
• Mislead about product/service origin

Language of Name

Any language or alphabet, but if not in English a translation is required.

Suffixes to Denote Limited Liability

An IBC name must indicate Limited Liability, ex. Ltd, Corp.

Documentation Requirements

Copies of Articles of Association, Memorandum of Association, and Certificate of Incorporation, must be kept at the Registers office, though the register is not available to the public.

Shares

Shares may be issued: with or without par value, can be issued as registered or in a bearer form, can be issued for consideration other than money and without par value.

Incorporation time frame

1-2 working days

FAQ

Why do businesses register a company in Dominica?

Businesses register a company in Dominica because international corporate structures provide asset protection and tax reduction possibilities that are found only in non-resident legal structures. Dominica offers both a safe and stable jurisdiction for non-resident companies giving companies a business-friendly corporate environment. 

The government and regulatory bodies seek to attract regional and international businesses by providing business-friendly policies to attract investors and entrepreneurs into the country.

How much does it cost to start a company?

Dominica company registration costs vary, which is why we do not include them on our website. Prices depend on the legal and corporate services required, as well as secretary, auditing and signatory services which are often needed (though not always) if you are incorporating a non-resident company.

Registration and incorporation fees for 1st-year companies vary anywhere from 1000-5000 USD with 2nd-year fees ranging anywhere from 500-2000 USD. However, even these figures are not always the case, as all of this depends on the services required, so beware of any service provider that states their fees exactly, as you will be disappointed in seeing that number change. Get in touch for a price quote.

Can I open a business bank account for my company?

Opening a business bank account is definitely possible and is one of the main reasons why businesses open a foreign corporation in the first place. However, it often can be the most challenging part of any offshore incorporation process because of the requirements and documents needed in order to satisfy Anti Money Laundering (AML) and Know Your Customer (KYC) laws.

That being said, some jurisdictions are harder than others and we will assist you through the entire process.

Can Offshore Protection create a company for me?

Yes, we can! Offshore Protection has been establishing companies around the world for nearly three decades. We have engaged in client legal and corporate services, including opening companies, offshore trusts, getting financial licenses, and accounts in dozens of countries around the world. Get in touch to find out more.

Offshore Protection

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Start the Dominica Incorporation process with Offshore-Protection today. Order a Dominica IBC with or without a bank account.