Dominica
International Business Company (Company limited by shares)
Legal
Country code – DM
Legal Basis – Common law
Legal framework – International Business Companies Act 1996
Company form – International Business Company (Company limited by shares)
Liability - The liability of a shareholder to the company is limited to any amount unpaid on a share held by the shareholder.
Business restrictions – An International Business company incorporated in Dominica shall not trade within Dominica, own properties in Dominica, nor undertake any activity which may suggest an association with the banking and insurance industries, unless the appropriate license is granted.
Licensing is required for conducting certain activities such as online casino and other online gaming, ship management and other maritime operations, owning and lease of yacht and vessels
Share capital – Share capital can be nominated in any recognizable currency, in any amount (not less than US$ 100). There are no paid-up requirements. Bearer shares are available. Shares may be issued with or without par value. Bearer shares are permitted, although they must be kept in safe custody at the company’s registered office.
Shareholders – The company may be formed by 1 or more shareholders, who can be either individuals or corporations and may be non-resident. Details of the shareholders are not publicly disclosed.
Directors – At least one director is required, who may be a natural or a legal person, and can be non-resident. Details of the directors are not disclosed on a public file.
Secretary – The appointment of secretary is optional, and may be a natural person or legal person, and non-resident.
Registered Address – IBCs must maintain a registered office in Dominica and must appoint a Dominican resident as the registered agent.
General Meeting – Annual general meetings are not mandatory and can be held anywhere. Meetings can be held by telephone or other electronic means; alternatively, directors, as well as shareholders, may vote by proxy.
Electronic Signature – Permitted.
Re-domiciliation – A foreign entity can continue as Dominica IBC, and vice versa.
Compliance –A company is required to keep accounting records, which can be kept both in Dominica and in any other country of the world, and can be managed by electronic files or programs.
Companies incorporated in 2019 may be required to file accounts, tax and annual return with the authorities.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Common law Legal basis
- 1 Minimum shareholders
- 1 Minimum directors
- USD 1 Minimum issued capital
- - Minimum paid up capital
- USDAny Capital currency
- Anywhere Location of annual general meeting
- 2017 AEOI
Taxes
Corporate income tax – Last January 2019, Dominica gazetted the International Business Companies (Amendment) Act, 2019. Under this amendment, Dominica repealed tax exemption for International Business Companies. However, IBCs incorporated on or before December 31, 2018, will be grandfathered and exempt from taxes for three years, until December 31, 2021.
IBCs incorporated on or after January 1, 2019, will not enjoy tax exemption and will be subject to the local tax regime which is currently 25% income tax on worldwide income. Amendments to the Income Tax Act are expected during this year.
Personal income tax – Dominica levies personal income tax on a residence and remittance basis:
- Individuals residents or ordinarily residents in Dominica are subject to personal income tax on a worldwide basis.
- Individuals residents but no ordinarily residents are subject to personal income tax on their Dominica source income and foreign-source income remitted to the country.
- Individuals non-residents are taxed on their income from Dominica sources and income from foreign-sources remitted to the country.
Personal Income tax rates are progressive up to a top marginal tax rate of 35% on annual income exceeding XCD 50,000. Capital Gains are not taxable. Dominica bank interests are tax-exempt. Dividends received are included in taxable income but a tax credit up to 25% of the net dividend received is usually available.
Other taxes - Municipalities levy a property tax up to 1.25% of the property value, depending on the type, location and use of the property. There is a 6.5% stamp tax on contracts for the transfer of assets. There are no net wealth and inheritance taxes in Dominica.
The Value-added tax rate is 15%. Reduced rates and exemptions apply for certain good and services.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- 25% Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- 5 Losses carryforward (years)
- 5.25% Social Security Employee
- 7% Social Security Employer
- 35% Personal Income Tax Rate
- 15% VAT Rate
- 31 Tax Treaties
Country details
Dominica officially the Commonwealth of Dominica, is a sovereign island, member of CARICOM and the Commonwealth. It is part of Windward islands in the Lesser Antilles, Caribbean Sea. Located between the French overseas territories of Guadeloupe to the north and Martinique to the south. It has an extension of 750 sq. km. and a population of over 72,000 inhabitants.
Its capital is Roseau. Its official language is English, although it is widely spoken the Dominican Creole French, a French-based sub-variety of Antillean Creole. Its official currency is the East Caribbean Dollar (XCD), pegged to the US$ at a 2.71:1 ratio.
Dominica is a republic with a parliamentary democracy within the Commonwealth of Nations and, since 1979, a member of the International Organization of La Francophonie. The President is the head of state, while the executive power rests in the Cabinet, headed by the Prime Minister.
Dominica’s economy is basically divided into offshore financial services, tourism, and agriculture. Its main export is bananas and to a lesser extent, soap, baby oil, vegetables, grapefruit, tamarind, and oranges.
Its second source of income is tourism, with about 70,000-80,000 visitors per year. Other industries present in Dominica include furniture, cement blocks, and shoes. The issuance of postage stamps, mainly intended for philatelic collecting, is also an important source of income for its economy.
Its primary sector is the provision of offshore financial services as trusts, international company formation, payment processing companies, commercial and investment banking, structured financing, among others.
In Dominica are present some of the world’s leading financial service providers and its incorporated offshore companies benefit from a full tax exemption, easy accounting, and maximum privacy.
Dominica has also one of the most attractive citizenship by investment programs worldwide. Where through a donation of $100,000 to the government or a $200,000 investment in real estate, a foreign individual can get Dominica’s passport and travel visa-free to Europe, the Caribbean and part of South America and Southeast Asia.