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For several years now, on the global technology market, there has been a desire to take advantage of the emergence of revolutionary technological innovations and stimulate the introduction of innovative solutions in various industries. These trends include, in particular, IoT, the unprecedented spread of social networks and technologies for very large data sets processing, as well as accelerated adaptation. Technology sector companies have begun to adapt more quickly to the needs of other sectors of the economy, while companies in other industries are adapting faster to new technological opportunities. All this contributes to the fact that the sector of mergers and acquisitions continues to grow and growth rates will only accelerate. 

In this article, we will provide an overview of various factors affecting M&A technology transactions in the Dominican Republic. The article also reviews due diligence procedures in mergers and acquisitions of Dominican companies.

Why Dominicana?

Why do technology companies often choose the Dominican Republic for mergers and acquisitions? Firstly, it is profitable, secondly, it is safe, thirdly, it is not very time-consuming. There are a number of additional factors on which the preferences of technology businesses are based, including:

  • Availability of free industrial zones. In these areas, special management regimes apply.
  • Well-developed telecommunication systems. Dominica attracts investors not only in the tourism industry, but also with its telecommunications.
  • Excellent infrastructure.
  • No taxes in the first 20 years of work. Also, there are no taxes on value added and capital gains.

Please note, that if you intend to register a technology or a financial company in the Dominican Republic, IQ Decision UK specialists will provide the necessary legal support.

Basic M&A Rules

M&A technology transactions in the Dominican Republic do not require specific government approvals unless the target company operates in a regulated sector, for example, telecommunications, banking, energy etc, In such cases, more attention will be paid to the M&A transactions. 

Mergers and acquisitions of Dominican companies are governed by the General Law on Companies and Individual Enterprises with Limited Liability, as amended. The amendments contribute to the modernization and updating of existing corporate law. 

Patents and PRP

The legal basis for the registration of patents and industrial property rights in the Dominican Republic is provided by two laws - “On Industrial Property” and “On Copyright”. These are documents of paramount importance during technological M&A transactions in the Dominican Republic. Patents are granted and industrial property rights are registered by the National Industrial Property Office (ONAPI).

It should be borne in mind that the industrial property registration in the Dominican Republic is an integral part of the rights, and the patent rights transfer must be confirmed in writing and registered with ONAPI.

It is important to understand not only the prospects, but also the risks of such transactions. Transfer of a company is a complex process and includes the complete transfer of its commercial name.

Due diligence

Due diligence procedure in M&A technology deals is similar to this kind of deals in other sectors. Particular attention is paid to intellectual property, technology and copyright protection, as well as aspects related to data protection. In the case of a transaction to acquire shares in a Dominican company, a drag and drop mechanism is in place. All rights that have been registered in the name of the company are the property of the buyer (new owner) as a result of the sale of shares under a contract of sale.

Please note: our company lawyers provide consultations on the company due diligence in the Dominican Republic.
 

Pledges

You can obtain a patent for an invention in the Dominican Republic, register an industrial design in the Dominican Republic, or a trademark as a guarantee of the obligation assumed by the registered owner. Such rights may be subject to the accession or other restrictions on control. Security and security interests must be registered in favor of the lender with ONAPI.

We recommend ordering legal advice on the protection of intellectual property rights in the Dominican Republic by contacting our company specialists.

Warranty

While preparing an M&A contract, it is always important to include a guarantee that the rights to IP and technology on which the object of the transaction is based are 100% original. It means that the seller did not violate the rights to trademarks, patents, copyright rights, franchises, or concessions owned by other persons or legal entities.

It is important to note that copyright registration in the Dominican Republic is optional since rights are automatically acquired at the time the work is created.

Legal assistance

If you decide to start an M&A technological transaction in the Dominican Republic, IQ Decision UK specialists are ready to provide legal support in conducting due diligence in M&A deals and provide related services.

You can sign up for a legal consultation by contacting us directly at the contacts below.