Testimonial
Manuel Ramos
TERAO ASIA
Managing Director
We think INS Global is a good solution about starting in a market like China. Understanding the market doesn’t mean you need to set up a company immediately.
5/5
Are you planning a company expansion into the Dominican Republic? An Employer of Record in the Dominican Republic can help. Expansions generally require capital and skillful labor, alongside an in-depth understanding of the local market. Still, the more traditional method for foreign market entry can be capital-intensive and inefficient.
For example, some companies spend many months creating and registering an entity or subsidiary in a new country. Later, these companies have to contend with hiring compliantly, documenting employment contracts, ensuring tax compliance, and administering workers’ benefits. Everyday administrative tasks like these can slow down core business activities and stifle growth.
As a result, many companies now prefer an Employer of Record (EOR) service like INS Global when expanding into the Dominican Republic. EOR services allow you to compliantly hire or dispatch workers in the Dominican Republic and onboard them in days—instead of months. After that, you can assign tasks to your new employees, like other team members.
In addition, your EOR partner can handle the following responsibilities on your behalf:
Dealing with complex foreign labor laws can be challenging. An EOR service minimizes your company’s legal burden by adhering to local tax and labor regulations.
Outsourcing employment-related functions such as payroll administration, benefits management, and HR administration saves time and money.
For companies that may not have the budget or staffing to operate entire HR departments that can manage HR operations for overseas workers, PEOs provide all the services required to function efficiently.
You can safely transfer employment-related risks to an EOR partner and decrease the threats posed by costly legal disputes and reputational damage.
Access a wide range of countries and regions through an EOR partner with a global presence. Integrate your payroll and HR into one single and easy-to-use platform
Company incorporation is a known expansion route, but it may not be the best way to grow for you or your needs. Incorporation is helpful when you must have complete operational control and ownership. Otherwise, the process can be time-consuming, and you are liable for all legal and regulatory compliance, tax obligations, and administrative overheads.
Alternatively, an EOR allows you to expand your operations and start hiring safely and quickly. Your EOR partner becomes responsible for issuing contracts, onboarding hires, managing payroll, and fulfilling legal and tax obligations.
As a result, a reputable EOR like INS Global is helpful for:
Manuel Ramos
TERAO ASIA
Managing Director
We think INS Global is a good solution about starting in a market like China. Understanding the market doesn’t mean you need to set up a company immediately.
Our EOR manages your employee recruitment or assignment needs in the Dominican Republic in 4 steps:
A Professional Employer Organization (PEO) and an Employer of Record provide many similar services but the two services remain distinct in some key ways.
PEOs in the Dominican Republic provide HR services, including payroll, benefits administration, and employee recruiting as a co-employer. Engaging a PEO means outsourcing your HR duties and sharing employment-related risks and liabilities with a co-employer.
In contrast, an EOR becomes the legal employer and hires on behalf of the client company in the Dominican Republic. EOR service providers then become responsible for employment-related risk and compliance with labor laws and payroll taxes.
Employment contracts in the Dominican Republic may be verbal or written. Written agreements are recommended since they foster a clear and sound work relationship.
At least 80% of a company’s workforce must be Dominican nationals. Similarly, at least 80% of a company’s payroll (with the exception of salaries for technical or executive positions) must correspond to wages earned by Dominicans.
Employers are required to keep the following records on a permanent basis:
These records are admissible evidence that may be presented in court against claims by employees.
Any party of the employment contract in the Dominican Republic can terminate it unilaterally without specifying a cause. However, both employer and employee are required to provide a prior-termination notice period depending on the length of the employment as follows:
Length of Employment | Minimum Advance Notice |
From 3 to 6 months | 7 days |
From 6 months to 12 months | 14 days |
More than 12 months | 28 days |
Employers are required to make a severance payment for terminating employment contracts without cause, as detailed below:
Length of Employment | Severance Pay |
3 to 6 months | 6 days’ salary |
From 6 months to 1 year | 13 days’ salary |
From 1 year to 5 years | 21 days’ salary per year of employment |
More than 5 years | 23 days’ salary per year of employment |
An employee required to work during his weekly rest period is entitled to a 100% premium on his salary for his or given compensatory time off the following week.
Work exceeding 44 hours a week is considered overtime and is paid with a 35% premium over regular hours. Work hours over 68 hours a week are paid at a 100% premium. Overtime pay does not apply to managers.
Employer and employee are free to negotiate salary, but the agreed figure cannot be less than the legally-established minimum salary.
The National Salary Committee establishes minimum salaries in the Dominican Republic, and the figure varies according to business size or industry type. The current private sector minimum salaries in Dominican pesos (DOP) are:
Business Size or Industry | Monthly Minimum Salary in DOP |
Large business | 12,872 |
Medium-sized business | 8,849 |
Small business | 7,843 |
Free trade zones | 8,310 |
Tourism industry | 9,005 |
Farm workers | 267 per day |
Businesses with installations and inventory exceeding 4 million DOP are categorized as large. Meanwhile, those with installations and inventory between 2 – 4 million DOP are medium-sized. Businesses with less than 2 million DOP are small.
Employees in the Dominican Republic are eligible for paid leave on the country’s 10 nationally recognized public holidays:
Every employee in the country receives a “Christmas salary” on or before December 20th, in addition to their regular salary. However, the Labor Code establishes a maximum Christmas Salary as 5 times the minimum wage.
Still, many employers waive this limitation and pay employees who have worked the whole year a full extra month’s salary. This extra salary is tax-exempt.
An employee is eligible for annual paid vacation leave as follows:
The employer is required to pay the vacation salary a day before vacation begins.
In addition, the Labor Code allows employees paid time off or leave of absence in the following scenarios:
Employees in the Dominican Republic can obtain sick leave with proof of illness, but there is no mandatory paid sick leave.
Pregnant employees are entitled to 12 weeks of paid maternity leave with 6 weeks leading up to the expected birth date and 6 weeks after.
After childbirth, the employee is entitled to 3 rest periods of 20 minutes each per workday for breastfeeding the infant, and to half a workday every month to allow for visits to the pediatrician.
Male employees are allowed 2 days off after the birth of their child.
Employers are obligated to share 10% of their annual pretax profits (if any) with their employees. However, the Labor Code allows employers to cap profit sharing as follows:
Profitable companies must pay employees within a 90 to 120-day period after the end of the company’s fiscal year.
However, specific industries, such as agricultural, industrial, forestry, mining companies, and free trade zone businesses, are exempt from profit sharing during the first three years of operation.
The country’s social security system considers 3 types of assistance, namely:
Employers and employees fund the system by paying a percentage of employee’s salaries as described below:
Benefit | Employee Contribution | Employer Contribution |
Health Insurance | 7.09% | 3.04% |
Risk Insurance | 0% | 1.2% + 0.6 (variable) |
Incapacity/Retirement Fund | 7.10% | 2.87% |
Income tax in the Dominican Republic is progressive, with workers paying a tax percentage in proportion to their income level, ranging from 0% to 25%.
The country imposes a value-added tax (VAT) on some goods and services. The standard VAT tax rate is 18%.
The corporate tax rate in the Dominican Republic is 27%.
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No, it is necessary to use a local entity abroad to comply with each country labor law.
Foreign companies can either set up a local entity in each country or use the services a local PEO (Professional Employment Organization) to hire the staff on-site directly.
The employer of record is the legal entity liable for the staff employed in a specific country. In practice, a foreign company can either open a subsidiary to become the employer of record of its abroad employees or use a PEO to act as the employer of record.
In general, 1-month is necessary to have an employee based out abroad using an existing PEO as the employe of record. When incorporating a new subsidiary to be the employer of record, the delay varies from 4-12 months.
Incorporating a new subsidiary in the Dominican Republic can take from 4-12 months. But you can have your team abroad using an existing PEO as the employer of record in just 1 month.
The price of professional EOR services in the Dominican Republic is a percentage of the worker’s monthly compensation. This price includes all HR-related tasks required to ensure compliance with the local employment laws.
A Dominican Republic EOR is a safe, legitimate, and efficient way to handle employer responsibilities there without establishing a specific corporate structure. EOR services accomplish this by hiring local legal professionals and offering top-notch HR assistance
Expect your team members to be paid accurately and on time each month. Also, employees will have access to all of Dominican Republic’s employee benefits. In addition, your business will be protected by the law.
Independent contractors who interact with their clients within a Dominican Republic EOR framework will retain full control of their work and may be eligible for many of the same benefits as regular employees. This is like working via an umbrella organization.
Our team of expert recruitment consultants can find the best local talent in the Dominican Republic for your needs by utilizing their wide professional networks, in-depth knowledge of regional business resources and benchmarks, and commitment to ethical hiring practices.
Yes. An Employer of Record can help you find new workers in various cities or regions within the Dominican Republic. An EOR handles headhunting, interviews, and candidate selection in specific cities or regions in the Dominican Republic, depending on your needs or preference
With INS Global, you can employ however many or few employees you need to achieve your goals.
The option for your employees to work in a shared workspace whenever convenient is a good idea. But using a PEO service in the Dominican Republic eliminates the need for a local address.
Yes. We can manage the necessary visa and work permit processes, where local employment laws, tax laws, or employee benefits differ for Dominicans and foreigners.
EOR and PEO solutions are great for enterprises of all sizes, from SMEs to multinational corporations. These solutions ensure secure and efficient employment of foreign or local workers. Also, our services are scalable, allowing you meet your employment demands as needed.
The legal expertise of PEO and EOR services is helpful for businesses seeking to avoid cost-scaling difficulties or those without their own structures. Such businesses can instead focus on expansion in the target country.
Staffing firms and umbrella corporations are third party options that can be used to hire independent freelancers in the Dominican Republic directly or indirectly.
In the Dominican Republic, most independent contractors are self-employed or run small enterprises. These contractors must be hired in accordance with a work agreement rather than an employment contract, according to the country’s law.
Hence, independent contractor can provide a CV, portfolio, verified references, and possibly a signed NDA.
The hiring cost in tthe Dominican Republic should factor costs like salary, recruiting service fees, signing bonuses, taxes and social security contributions, and other direct and indirect expenses, including payment processing and foreign employee tax management fees.
Employers in the Dominican Republic manage payroll for all workers typically at the end of every month, with employers being responsible for withholding amounts and organizing payment of employees’ individual income tax and social security fund contributions.
The National Salary Committee establishes minimum salaries in the Dominican Republic, and the figure varies according to business size or industry type as described below (salaries are in Dominican pesos):
There are many types of visas available to applicants when traveling to the Dominican Republic. The most commonly applicable visa for work purposes are:
In the Dominican Republic, employers are responsible for organizing and withholding employees’ income tax payments and social security fund contributions every month. Employers in the Dominican Republic contribute 3.04%, 1.2%, and 2.87% an of an employee’s salary to health insurance, risk insurance, and incapacity/retirement fund respectively.
ployees in the Dominican Republic are entitled to a 13th-month bonus, public holidays, paid leave (sick leave, annual leave, and parental leave), as well as health insurance.
Unilateral changes to an employee’s contract are not permitted in the Dominican Republic. Changes to an employee’s working conditions must be agreed upon by both parties. So working contracts should be in writing, with all amendments signed by employer and employee together.
In addition to public and private healthcare, the Seguro Nacional de Salud (SeNaSa) is the national health insurance system in the Dominican Republic that provides health insurance coverage to various segments of the population, including formal sector employees, public servants, individuals with low incomes, and vulnerable groups.
Employers are required to make a severance payment for terminating employment contracts without cause depending on the employees’ duration of service as detailed below:
The Ministry of Labor (Ministerio de Trabajo) regulates and oversee labor regulations in the Dominican Republic.
Employees in the Dominican Republic are eligible for paid leave on the country’s 10 nationally recognized public holidays. These may also include local or regional holidays.
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