Member Article

1. What types of collateral are available?

Real estate, operating and other licence rights or concessions, leaseholds, buildings, moveable property, contractual  lights, receivables, shares, securities, onshore and offshore bank accounts, entire enterprises, after-acquired property, proceeds from investments and the sale of collateral are all available. Subject to limited restrictions, security may be granted on real estate property (the land and/or improvements), moveable property (motor vehicles, boats, aircraft) – including proceeds from their sale – contractual rights, credits, receivables, shares, bank accounts and intangible goods.

2. How is a security interest in each type of collateral perfected and how is its priority established? Are any fees or taxes payable to perfect a security interest and, if so, are there lawful techniques to minimize such fees or taxes?

3. How can a creditor assure itself as to the absence of liens with priority to the creditor’s lien?
In general terms, you may request a certification of liens and encumbrances from the authority in charge or the registration of such lien. For instance, for real estate assets, such certification may be issued by the Land Registrar’s Office of the jurisdiction where the property is located; for moveable assets, the certification may be issued by the Peace Court of the jurisdiction where the assets are located (except with respect to aircraft and boats).

4.  What are the restrictions, controls, fees and taxes on foreign currency exchange?
None

5. What are the restrictions, controls, fees and taxes on remittances of investment returns or loan payments to parties in other jurisdictions?
No restrictions, controls or fees apply on the remittance of investment returns or loans payments abroad. As for taxes, the general principle is that Dominican source income (that is, income derived from investments or interests located in the Dominican Republic) is subject to taxation. In that regard, interest payable to financial institutions abroad is subject to a 10 per cent withholding; interest payable to non-financial institutions is subject to a 25 per cent withholding, which is also the applicable general income tax rate.

6. Must project companies repatriate foreign earnings? If so, must they be converted to local currency and what further restrictions exist over their use?
There are no restrictions in terms of repatriation of earnings.

7. May project companies establish and maintain foreign currency accounts in other jurisdictions and locally?
Yes.

8. What restrictions, fees and taxes exist on foreign investment in or ownership of a project and related companies? Do the restrictions also apply to foreign investors or creditors in the event of foreclosure on the project and related companies? Are there any bilateralinvestment treaties with key nation states or other international treaties that may afford relief from such restrictions? Would such activities require registration with any government authority?
There are no restrictions as to ownership of project companies. As for registration, the applicable requirements vary depending on the industry. For instance, registration of the company (including its shareholders and directors) is required in sectors such as financial services, telecommunications, energy and mining.

9. What government approvals are required for typical project finance transactions? What fees and other charges apply?
In general terms, no governmental approvals are required. However, in most cases notice of the transaction shall be provided to the regulator of the sector or industry involved in the transaction.

 

 

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