Due diligence requirements

What due diligence is necessary for buyers?

The scope of due diligence will depend on the sector of the M&A transaction. Nonetheless, a standard due diligence for buyers will involve:

  • corporate structuring;
  • tax;
  • securities exchange (if a public company);
  • intellectual property;
  • labour and social security;
  • litigation;
  • finance; and
  • regulated sector compliances.


What information is available to buyers?

The buyer has free access to the following documents:

  • at the Mercantile Registry (local Chamber of Commerce), the seller’s bylaws, registered assembly meeting and mercantile registry;
  • at the Dominican Tax Authority, the seller’s tax identification, tax outlook and registered assets;
  • at the Dominican Securities Exchange Commission (SEC) (if a public company or bond issuer), the seller’s financial statements;
  • at the Dominican Intellectual Property Office, trade name and trademark certificates;
  • at the domicile of the seller, non-litigation or pending litigation certificates and active pledges;
  • at the Ministry of Labour, payroll sheets;
  • at the Social Security, employee tax compliance; and
  • for regulated companies, at the respective regulatory body, the required operating licences or permits and published balances when mandatory by law.

All required documents are regularly provided by the buyer, considering that there are no hostile M&A transactions in the Dominican Republic.

What information can and cannot be disclosed when dealing with a public company?

Within 30 days of signing an M&A agreement, the parties must publish an extract or summary of the agreement in a national newspaper. If the companies are public companies, the agreement must also be filed at the SEC, along with an affidavit signed by the representatives of the companies expressing that the content of the agreement abides by the law. Once the SEC has reviewed and approved the agreement, it will publish its resolution in a national newspaper.


How is stakebuilding regulated?

Stakebuilding is regulated by Laws 479-08 and 19-00, which are audited and approved by the SEC.

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