Do I Need a Local Entity to Hire in Dominican Republic?

In the Dominican Republic, a "local entity" typically refers to a recognized business presence such as a subsidiary or branch office. This setup allows your company to be recognized as an employer and fulfill local payroll and employment obligations.

Without establishing a local entity, you generally cannot manage payroll, register as an employer, or comply with local labor laws. However, you can consider using an Employer of Record (EOR) to simplify the hiring process while ensuring compliance.

What is Required to Employ Someone in Dominican Republic?

• Local employing entity required to directly employ? Yes (unless using an EOR)
• Payroll registration required? Yes (employer registration with the General Directorate of Internal Taxes)
• Withholding/tax remittance required? Yes (mandatory withholding for income tax applies)
• Social contributions required? Yes (employer must contribute to Social Security)
• Local employment agreement required? Yes (written contracts are mandatory)
• Mandatory benefits to budget? Yes (includes 13th month salary and vacation pay)
• Works council/collective agreements considerations? Usually (sector-specific agreements may apply)

Best Options If You're Hiring in Dominican Republic

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but you should proceed with caution. Hiring contractors can be a viable option, but misclassification risks exist if the relationship resembles employment.

In the Dominican Republic, the law is protective of workers, and authorities may scrutinize contractor relationships. Here are some points to consider:

• Ensure contractors have independence in their work.
• Avoid controlling their hours, tools, or methods.
• Be cautious if the contractor is core to your operations.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in the Dominican Republic, depending on the necessary registrations.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated DOP 15,000–30,000 per month ($270–$540)
• Payroll provider: Estimated DOP 1,500–3,000 per employee per month ($27–$54)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated DOP 50,000–100,000 per year ($900–$1,800)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 per month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Dominican Republic

Hiring in the Dominican Republic can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in the Dominican Republic quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.