Non compete clause: valid in Dominican Republic?

non compete A non compete clause (also called “covenant not to compete”) is a clause under which one party agrees not to enter into any activity that could be considered as competition against another party. This is usually required by the employer to the employee, by a business to a consultor or among partners. The use of such clauses is premised on the possibility that upon their termination or resignation, an employee or business partner might begin working for or with … Continued

Dividends distribution by DR free zone companies

There are recent news on dividends distribution by Dominican free zone companies. But first, let us review the background on the recent announcement made by the government. Dominican Law No. 253-12, enacted at the end of 2012, (hereinafter called “the Tax Reform”) modified the Dominican Republic’s Tax Code as well as other laws of a fiscal nature. The only significant change to the tax situation of free zone companies with regard to withholdings on dividend distribution is the amendment of Article 308 of the Tax Code by establishing a tax rate of 10% to be withheld and paid to the Tax … Continued

Employment in DR: Liquidation and Law 187-07

  Liquidation is a term used to indicate the payment an employee receives from its employer as compensation when the employer has used its right to put an end to the labor contract for no reason (no fault by employee), that is, a payment upon dismissal. Such payment is calculated depending on the seniority of the employee. The longest the employee has been working for the employer, the larger the liquidation amount is. For many years an important group of … Continued

Signatures by counterparts in Dominican Republic

What are signatures by counterparts?   Typically contracts will be made in writing, on the basis that this provides a written record of the terms of the contract agreed between the parties. A Counterparts clause states that parties need not sign the same copy of an agreement and any of the copies can be treated as an original for evidentiary purposes. Sometimes it includes a statement that signatures delivered by fax or email/pdf are valid. This clause permits the agreement to be executed … Continued

Law on the Protection of Dominican Importers

In the Dominican Republic, the contractual relations between the parties intervening in any distribution agreement between a foreign licensor and a local distributor/importer are under the scope of Law 173, enacted in 1966 and subsequently amended, which establishes extraordinary protection for the local distributor/importer of foreign services and products The object of this law is to prevent the foreign licensor from terminating a distribution contract without liability after the local distributor has created a market for the products and/or services … Continued

Free Trade Zones in the Dominican Republic

With the purpose of attracting foreign investment to increase levels of employment and foreign currency in the country, in 1970 the Dominican Republic established a legal regime of extra-territoriality by means of which companies that are set up in a specific geographic territory declared as an “industrial free zone” and surrounded by insurmountable walls, are exempt from the payment of taxes on the profits they generate. They also benefit from a series of  additional fiscal and labor incentives specifically established … Continued