US Company Formation from the Dominican Republic (2026): US LLC or C-Corp, Territorial Tax, Foreign Financial Income, Free Zones and DR-CAFTA

The Dominican Republic's economy is tied to the USA in many ways. Free zone factories in Santiago, San Pedro de Macorís and Haina export medical devices, electrical components, apparel and most of the premium cigars Americans smoke. Tourism depends on American visitors. A diaspora of more than two million Dominicans in New York, New Jersey, Massachusetts, Pennsylvania and Florida keeps family and business links running both ways. Increasingly, Dominican professionals and agencies also sell services to US clients.

A US company fits each of these. It can be a US distribution arm for a free zone exporter, a US contracting entity for a Santo Domingo agency, or a company owned with family in the diaspora. It can be formed from the Dominican Republic entirely remotely. Two Dominican rules decide how it is taxed at home:

• Territorial system. Income from work and business carried on in the Dominican Republic is taxed, and other foreign-source income generally is not.
• The 2012 exception. Since Law 253-12, residents are taxed on financial income from abroad.

And there is no US–Dominican income tax treaty. This guide explains what follows from all three.

In short: Dominicans and residents of the Dominican Republic can own 100% of a US LLC or C-Corporation, formed remotely. The DR taxes Dominican-source income, so work performed in the DR is taxable there whatever entity invoices it. Since Law 253-12, residents are also taxed on foreign financial and investment income, with a credit for foreign tax. New residents and returning Dominicans generally get a three-year grace period. There is no US–DR income tax treaty, so US corporate dividends to the DR are withheld at 30%. Goods originating in the DR can enter the USA duty-free under DR-CAFTA. With UCB, a Wyoming LLC with EIN is $249, a Florida LLC with EIN is $299 and a Delaware corporation with EIN is $358, all-in.

Who can form a US company from the Dominican Republic

US states impose no nationality or residence condition. A Dominican citizen, a foreigner living in the DR, or a Dominican company (an S.R.L. or S.A.S.) can own a US company outright, and an individual owner can be its sole manager or director. No US visa, Social Security number or US address is needed, and no trip is required. The company needs a registered agent in its state, which is included for the first year in every UCB formation (see registered agent explained), and an EIN from the IRS, which needs no SSN or ITIN (see EIN for non-residents).

For identity, use a passport. The cédula alone is not accepted by US banks. For proof of address, a recent EDESUR, EDENORTE or EDEESTE electricity bill, an internet bill or a bank statement, with a translation. If a Dominican company will own the US company, have the following ready, with translations:

• its RNC (Registro Nacional de Contribuyentes) registration;
• its Mercantile Registry certificate;
• its list of shareholders.

How the Dominican Republic taxes income connected to a US company

Territorial, with a financial income exception

The Tax Code (Law 11-92) taxes Dominican-source income: income from work, business and assets in the country. Foreign-source income generally is not taxed. Law 253-12 of 2012 added an exception: residents are taxed on income from financial investments and financial gains from abroad. Tax already paid abroad on that income can be credited, up to the Dominican tax on it.

For a resident who owns a US company, that suggests:

• Your work in the DR is Dominican-source. Design, development, consulting or management performed from Santo Domingo or Santiago is taxable in the DR, whichever company invoices it. Individuals pay progressive rates up to 25%, and companies 27%.
• What a US company pays you as a return on your investment, such as dividends or distributions, is likely to be treated as foreign financial income, and taxed in the DR with credit for any US tax.
• Income the US company earns from genuinely US operations, with US staff, a US warehouse or US property, is foreign-source at the company level.

Your Dominican accountant should confirm how the DGII will view your specific setup. The tax authority publishes technical rulings (consultas) on dividends and foreign income.

Residence and the three-year grace period

You are a Dominican tax resident if you are in the country for more than 182 days in a year. Under Law 253-12, foreign financial income becomes taxable only from the third year of residence. That gives people who move to the DR, and Dominicans returning from abroad, a period during which their foreign investment income is not yet taxed. Holders of residence under the investment law (Law 171-07), such as pensionados, rentistas and investors, have their own exemptions, which their adviser should confirm.

US LLC formation from the Dominican Republic

The US side

A single-member LLC owned by a non-resident is disregarded for US federal income tax. With no US office, US employees or US agents who conclude contracts, its income is generally not effectively connected with a US trade or business, so no federal income tax is due (see effectively connected income explained). Distributions to the owner are not dividends for US purposes, so no 30% withholding applies. The LLC files Form 5472 with a pro forma Form 1120 every year, and missing it carries a $25,000 penalty (see Form 5472 explained).

A peso example

These are illustrative figures, not a client case, at RD$62 to the dollar.

Carolina runs a digital marketing agency in Piantini with four employees. Her clients are dental practices and law firms in Florida and New York. She forms a Wyoming LLC so that clients can pay by ACH to a US account and sign with a US company, and the LLC bills US$180,000 a year.

Her Dominican S.R.L. employs the team, and invoices the LLC a monthly service fee totalling US$150,000 a year, about RD$9.3 million. That covers salaries and costs plus a margin, and is taxed in the DR at 27% on the S.R.L.'s profit. The LLC's remaining US$30,000 pays for US advertising tools and a commission to a Miami sales representative paid as an independent contractor.

In the USA, the LLC has no office or employees. It files Form 5472 and a pro forma 1120 and owes no federal income tax. In the DR, the work is done and taxed where it happens, in the S.R.L. The structure gives Carolina's clients a US counterparty and fast payments without moving Dominican income out of the Dominican tax base. That keeps her accountant comfortable.

US C-Corp formation from the Dominican Republic

The US side

A C-Corporation pays 21% federal tax on its profits, plus state tax where it does business, and files Form 1120 and Form 5472 each year (see the 21% corporate tax explained and the C-Corp guide for non-residents). With no treaty, dividends, royalties and related-party interest paid to the DR are withheld at 30%. On top of 21% corporate tax, that makes paying profits out expensive. US dividends to a Dominican resident would also be foreign financial income in the DR, with a credit for the 30%.

Free zone exporters and DR-CAFTA

The C-Corporation is the natural structure for a Dominican exporter that wants its own US sales and distribution company. Under the Dominican Republic–Central America Free Trade Agreement (DR-CAFTA), goods that meet the agreement's rules of origin enter the USA free of most customs duty. That is a large advantage over Asian competitors, and it depends on the goods' origin, not on who imports them.

Take an illustrative case: a family cigar factory in a Santiago free zone forms a Florida corporation. The corporation imports the cigars, holds stock in a bonded warehouse in Miami, and sells to tobacconists and distributors across the USA. It is the importer of record. It registers with the US authorities that regulate tobacco importers and pays US federal excise tax on cigars. It buys from the Dominican factory at arm's-length prices and pays US tax on its own distribution margin: 21% federal plus Florida's 5.5% corporate income tax.

Profits are reinvested in US sales staff and inventory rather than paid to the DR at 30% withholding. The factory's own margin is earned and taxed under the Dominican free zone regime.

The same structure suits medical device, electrical, apparel and food exporters. For each, the US company is a real US business with a real US tax bill, and it should be a corporation rather than a disregarded LLC. Otherwise the Dominican company itself becomes the US taxpayer. See US subsidiary for a foreign company.

A corporation is also the right form for start-ups raising from US investors (see raising US investment as a foreign founder).

Owning a US company with family in the diaspora

Many US companies with Dominican owners have partners on both sides: a sibling in the Bronx and another in Santiago, or parents in Puerto Plata and a daughter in Boston. When some owners are US citizens or green card holders, the company's tax picture changes:

• US owners are US persons, taxed by the USA on their worldwide share of the profits.
• A multi-member LLC is a partnership for US tax. It files Form 1065, and income connected with a US business that is allocated to the Dominican partner is subject to US withholding (see single-member vs multi-member LLC).
• The state should be where the business actually operates. A grocery, construction or remittance-adjacent business in New York or New Jersey is formed or registered in that state, not in Wyoming. Those states have their own taxes and filings (see New York LLC for non-residents).

Which state

• Wyoming or New Mexico for a service business run from the DR, with no US premises.
• Florida for a business with a Miami office or warehouse. Miami is the DR's main US gateway (see Florida LLC for non-residents).
• New York, New Jersey or Massachusetts where the business operates in the diaspora heartland.
• Delaware for a corporation raising investment.

See best state for non-residents and the state selector.

What it costs

State fees and the first-year registered agent are included. A US business address with your own suite number is $60 a year. See what a US LLC costs every year.

Banking and payments

Residents of the Dominican Republic are generally accepted by US banks and fintechs for remote business accounts. What gets applications through:

• A specific business description.
• An English website showing real work.
• Clear ownership documents, including for any Dominican company in the chain.
• A US business address with your own suite number rather than the registered agent's address.

Money moves easily between US accounts and Dominican banks, many of which offer US dollar accounts. Keep invoices and the US company's records, because Dominican banks ask the origin of regular incoming transfers, and the DGII may too. See US business bank accounts for non-residents, why banks reject non-resident applications and Stripe for non-residents.

Common mistakes

• Treating income for work done in the DR as foreign income because a US LLC invoiced it.
• Forgetting Law 253-12. Investment income from abroad is taxable for residents after the grace period.
• Paying dividends from a US corporation to the DR, at 30% withholding with no treaty.
• Running a US distribution business through a disregarded LLC owned by the Dominican factory, which makes the factory a US taxpayer.
• Assuming DR-CAFTA applies to any goods shipped from the DR. Only goods meeting the rules of origin qualify.
• Skipping Form 5472 because the LLC owed no US tax.

Frequently asked questions

Can a Dominican citizen own 100% of a US company? Yes, living in the DR or abroad, without visiting the USA.

Does the DR tax income from my US LLC? Income for work you do in the DR is Dominican-source and taxable. Returns from a foreign company, such as dividends, are likely to be taxed as foreign financial income under Law 253-12, after the three-year grace period for new residents.

Is there a US–Dominican Republic tax treaty? No income tax treaty. US dividends, royalties and related-party interest paid to the DR are withheld at 30%.

Will my US LLC pay US tax? Usually not, with no US office, staff or agents. It files Form 5472 and a pro forma 1120 every year.

Should my free zone company use a US LLC or a corporation for US distribution? A corporation. A disregarded LLC would make the Dominican company itself the US taxpayer on the US business.

Do I need an ITIN? Not to form the company or obtain its EIN. See what is an ITIN and who needs one.

How UCB can help

We handle US company formation from the Dominican Republic remotely: the state filing, EIN, registered agent, US business address and bank application. Each year we file the federal return through our US tax filing service. Your Dominican accountant handles DGII filings, and we supply the US records they need. See our formation, EIN and bank account package ($348) and the Latin America guide.

Setting up a US company from the Dominican Republic? WhatsApp us at +1 315 961 2956 or email enquiries@ucbsolutions.com.