Can Foregien Corporation enter in to contract for real estate w/o RNC #

[donluis99]

In order to Purchase Real Estate, I have seen on another post that a U.S. Corp. must have a R.N.C., which I would assume is relevant to any foreign corp.

"Is it or would it be legal for a foreign Corporation to enter into a contract and purchase a property?"

With the foreign corporation meanwhile registering as a “sucursal” in the DR whereas at that time receive their R.N.C.following which title etc would be registered

For any reason would there / could there be any problem with this scenario

[gringosabroso]

What is an "R N C"? Thank you.

[mido]

Originally Posted by gringosabroso

What is an "R N C"? Thank you.

"Registro Nacional de Contribuyentes" or your tax payers number.

[Fabio J. Guzman]

You can enter into a real estate contract without a tax number (RNC). However, you won’t be able to record the purchase or pay the required transfer taxes until you obtain it.

[donluis99]

Thank You Mr. Guzman

Now,

Ley 16-95 Articulo 4

Within 90 days of making the investment all forgien investers / businesses must register with the Central Bank with the following documents:

a. Solicitud de Registro
b. Recipts of Investments
c. Corporate consitution and authorization to operate as a "sucursal"

For one reason or another it is taking a lot of time for the "sucursal" to receive its RNC, all relavent documents have been presented and we were told that it would take between 15 - 30 days to receive the RNC.

I suppose as may be typical 15-30 days can easily be up to 60 days, but it has been more than three months. One excuse given is the re-organization and change of personel in the department.

Now property has been purchased and paid for in full by the "Corporacion Extranjera" Titles are in hands of the company, but certianly we have not able to comply with the 90 days as above, nor have been able to as of yet record the title or pay the transfer taxes.

Will there be any penalties or any further complictions or will it all just go in stride as do many things which have time requirments.

Has anybody else had such delays registering for a S. A.

[Fabio J. Guzman]

We have also encountered delays in obtaining RNC numbers.

Did your form a local company or are you trying to domiciliate a foreign entity?

Art. 4 of Law #16-95 requires the filing of incorporation documents, in case of a local company, OR (not AND) the filing of the authorization to operate a subsidiary ("sucursal"), in case of a foreign entity. This authorization is granted by Presidential decree.

[donluis99]

Originally Posted by Fabio J. Guzman

We have also encountered delays in obtaining RNC numbers.

Did your form a local company or are you trying to domiciliate a foreign entity?

Art. 4 of Law #16-95 requires the filing of incorporation documents, in case of a local company, OR (not AND) the filing of the authorization to operate a subsidiary ("sucursal"), in case of a foreign entity. This authorization is granted by Presidential decree.

The foreign corporation is being registered with the "Camara de Comercio y Produccion de Santo Domingo (Registro Mercantil)"

I understand that it is to be registered as a "sucursal", but maybe it is that the foreign entity is forming the local corporation.

What really is the difference?

If the presedential decree is required what really would the proccess be? Would there be any advantage?

I understand that all relevent documents have been deposited in thier relevent departments and the only thing pending is the issuance of the R.N.C.

So I return to the original question, in this situation the foreign entity has purchased property which will serve as its registered local office, is there anything that can go wrong, what if the RNC is not issued what would be the recourse available.

What if prior to the issuance of the RNC the company decides to sell the property, can they?

Does the foreign corp. have any protection, can the contract for any reason be nullified by a court?

[Fabio J. Guzman]

A foreign corporation may buy real estate directly in its name or it may incorporate a Dominican subsidiary under its control to purchase the property.

To have the same rights as a Dominican corporation, a foreign corporation that has not incorporated a Dominican subsidiary, should obtain from the Executive the authorization to establish a domicile in the Dominican Republic (Article 13 of the Civil Code). A foreign entity not authorized to establish a domicile in the DR: (a) will have to post a bond it decides to sue in court and (b) will be subject to withholding restrictions established in the Tax Code.

As for the RNC (tax number), you need it to record your real estate purchase and, of course, to record any sale. You may find a buyer who will sign a Deed of Sale without you having a tax number. In any case, there is really no danger of not obtaining the RNC, it’s just a question of time.

[Tordok]

Presidential decree???!!! wow, I'm involved in a similar situation as the one discussed in this old thread and would like some advice, if possible.

3 amigos in the US get together and form an LLC with the main purpose of making real estate investments. Our very 1st investment happens to be the purchase of a small condo in Punta Cana.

The legal counsel for the sellers informed us that our LLC must first obtain an RNC. The other option is for our company to buy a DR based company and then purchase the property through it (we have not ruled this out yet) or buy the property as 3 individuals with equal interests, which then of course would be fraught with its own set of legal fragility in the event of anyone's incapacitation, divorce, bankruptcy, death, etc thus not as safe as an LLC.

The assumption by the DR authorities seems to be that simply because the investor is a company that we are somehow planning to have permanent "business operations" there with a sucursal. On the other hand, if we decided to buy the property as 3 individuals, then we don't have to go through all these steps (the Dominican consular charges of US$75 fee for each document it legalizes alone seems exaggerated.

So here are a couple of questions for Mr. Guzmán:

- once we get RNC, we complete the transaction, transfer the property, etc.... if we rent the property, must the LLC then report this as income to either Dominican and/or US tax collectors. Are there any advantages to obtain it with a legally established DR company instead?

Any advice will be greatly appreciated.

- Tordok

[isny pierre]

Hey how are you guys doing im moving to the dr and moving my import,export company there, my resident card will expire in a few month.I'm will to become a dominican republic resident i would like to have some advice.