Global PEO in Dominican Republic
What comes to mind when you think of the Dominican Republic? Swaying palm trees? Beautiful beaches? Lush rainforest?
This Caribbean nation, occupying half of the island of Hispaniola, has all of these things in abundance. But did you know that it’s also a great place to do business?
According to the World Bank, the Dominican Republic has the second-fastest growing economy in the LAC. It has a growing middle class and a network of 75 free trade zones. And it’s on track to reach its goal of high-income status by 2030.
Want to expand into the Dominican Republic? With a PEO like Skuad, you can hire Dominican employees and reach a new market. Check out our services here.
What is a PEO?
A PEO is a professional employer organization.
A PEO service can take on HR responsibilities — like onboarding, benefits, and payroll — for other companies.
This type of service can also help companies to hire international employees.
For example, if you wanted to hire talent in the Dominican Republic but you don’t have an owned entity in the country, a PEO could legally hire Dominican employees on your behalf.
They could also take care of all HR tasks associated with your international employees, managing tax and labor law compliance too.
For companies who want to offload the burden of HR, and for those who want to build a global team, partnering with a PEO is the perfect solution.
Want to start hiring and doing business in the Dominican Republic? Find out if a PEO in the Dominican Republic is right for your business by chatting to one of the Skuad team today.
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What are the benefits of using a PEO provider in the Dominican Republic?
Hire the best Dominican (and international) talent
Are you still hiring from only within your local area? You’re missing a trick. In an age of remote working, you don’t have to place such strict limits on your talent pool.
When you hire internationally, you open up a whole world of talent, making it much easier to find the right people and skills for your company.
Using a PEO is the most straightforward way to hire employees beyond your borders because they take care of all HR, tax, and employment law compliance for you. It’s global hiring without the headache.
Become a globally competitive employer
An appealing salary and benefits package can help to win over top talent.
But how do you know what to offer employees in a new country – like the Dominican Republic – when you have little knowledge about employee needs and expectations?
This is another thing a PEO can help with. A PEO, with their years of local knowledge, understands your legal obligations, as well as the little extras you can offer to get talented new employees on board.
They’ll help you to offer the right salaries and benefits for each new location you choose to hire in, ensuring that your business is seen as a globally competitive employer.
Avoid setting up your own legal entity in the Dominican Republic
If you decide not to use a PEO in the Dominican Republic, you have to set up your own legal entity in order to legally hire Dominican employees.
This means registering as an international business and setting up a Dominican subsidiary. It means recruiting a legal team and retraining your HR team. It also means spending a lot of time and money getting everything established.
So what can you do if your budget and schedule won’t stretch to a satellite office?
A professional employer organization in the Dominican Republic already has a legal entity in the country. This means they can act as an employer of record in the Dominican Republic, legally employing Dominican employees on your behalf.
They’ll also offer continued support with HR, payroll, and compliance management, so you can focus on getting the most out of your new talent.
Want to know more about how an EOR in the Dominican Republic works? Check out our handy EOR guide.
Gain insight into new markets
Doing business in the Dominican Republic is so much easier when you have Dominican talent on your team.
Their local knowledge helps you to understand cultural quirks, business norms, and the Dominican market a whole lot quicker.
This valuable insight – only accessible to you when you hire Dominican employees – can make all the difference to your expansion efforts in the region.
The major worry for many businesses looking to go global is compliance.
How do you make sure you abide by tax requirements and employment laws in the Dominican Republic, when understanding the legislation in your home country is hassle enough?
Adding to this stress is the fact that businesses that fail to comply with local regulations can face serious fines and penalties.
This is another great reason to work with a PEO in the Dominican Republic.
Your PEO can advise on all of your obligations – and help you stick to them too. They’ll take full responsibility for keeping your business and employment practices 100% compliant, by taking into account the following laws.
Payroll in the Dominican Republic
- The local currency in the Dominican Republic is the Dominican Peso (DOP).
- Employees in the Dominican Republic are paid on either a monthly or bi-weekly basis.
- A 13 month salary isn’t a legal requirement in the Dominican Republic but most companies give employees a Christmas bonus, equivalent to one month’s salary, on or around 20 December.
- Full-time employees work up to 44 hours per week. Part-time employees work up to 29hours per week.
- Overtime is paid at a rate of 135% of the usual salary up to 68 hours per week. Overtime above 68 hours per week is payable at the rate of 170% of the usual salary. Overtime on weekends and public holidays is payable at 200% of the usual salary.
Dominican Republic tax rates and contributions
Employee tax contributions
In the Dominican Republic, income tax is charged according to four tax bands:
- Up to 416,220 DOP: 0%
- 416,220 DOP - 624,329 DOP: 15%
- 624,329 DOP - 867,123 DOP: 20%
- 867,123 DOP and over: 25%
Employee payroll contributions
Employees in the Dominican Republic make the following payroll contributions:
- 2.87% - Pension and disability
- 3.04% - Health insurance
- 0.5% - Technical education
This totals 6.41% in employee payroll contributions.
Employer payroll contributions
Employers of Dominican employees make the following payroll contributions:
- 7.1% - Pension and disability (maximum contribution 269,640 DOP)
- 7.09% - Health insurance (maximum contribution 134,820 DOP)
- 1.2% - Labor risk (Maximum contribution 53,928 DOP)
- 1% - Technical education
Total employer contributions equal 16.39% of an employee’s salary.
Dominican Republic corporate tax rate
In the Dominican Republic, the corporate tax rate is 27%.
Paid leave in the Dominican Republic
There are 12 paid public holidays in the Dominican Republic.
Annual leave: Full-time employees are entitled to 14 days of paid annual leave after a year in service. After five years, this leave rises to 18 days per year.
Sick leave: There is no statutory sick leave entitlement in the Dominican Republic.
Maternity leave: Women are entitled to 14 weeks paid maternity leave, with seven weeks usually taken before the due date and seven weeks taken after. The employer and social security split maternity leave payments.
Paternity leave: Men are entitled to two days paid paternity leave following the birth of a child.
Other leave: Dominican employees get three days paid leave for the death of a family member and five days paid leave when they get married.
Skuad can take care of all employment law and tax compliance – so you don’t have to. Book a platform demo to find out more.
What does it cost to build a team in the Dominican Republic?
The budget you’ll need to build a team in the Dominican Republic varies depending upon the method you choose. Take a look at the primary options below.
Company incorporation in the Dominican Republic
If you’re looking to make a long-term investment in the Dominican Republic, the costs involved in company incorporation may be worth it for your business.
Just remember that setting up a business in the Dominican Republic and creating your own legal entity takes a lot of time and money.
You have to factor in:
- Legal fees
- Travel costs
- Office space costs
- Banking costs
- HR training costs
These costs are often prohibitively high for SMEs.
Partnering with a PEO in the Dominican Republic
A PEO in the Dominican Republic can help you to build a Dominican team for a fraction of the cost involved in setting up a legal entity.
Here at Skuad, our flat fee prices start from $199 per employee, per month, and our clients can count on:
- Employer of record services in the Dominican Republic
- Payroll, benefits, and onboarding
- Dominican employment law compliance
- Free global payments
- A first hire for free
It’s also easy to get started with our platform, meaning you can be finding and hire international employees within a few days of signing up.
Ready to start onboarding and paying employees in The Dominican Republic? Schedule a Skuad demo to see our platform in action.