Guidance for Business Setup in Dominica
- oicinvestdominica
- Oct 18, 2025
- 5 min read
Updated: Nov 14, 2025
A Practical Guide to Setting Up a Business in Dominica
Starting a business is a significant undertaking, and for those considering the Commonwealth of Dominica, a small island developing state, it presents both unique natural advantages and distinct operational challenges. This guide offers essential information and practical steps to navigate the setup process, drawing on information from the Companies and Intellectual Properties Office (CIPO) and the Invest Dominica Authority (IDA).
Understanding the Business Landscape and Key Challenges
Dominica's economy is primarily built on tourism (especially eco-tourism), agriculture (with a focus on diversification toward organic agri-business and aquaculture), and a growing service sector. The government, through the Invest Dominica Authority (IDA), actively promotes foreign direct investment, particularly in sectors that create jobs and earn foreign currency.
However, potential investors must adopt a pragmatic view of the operational context and inherent structural challenges:
Vulnerability to External Shocks: As a small island state, Dominica is highly susceptible to the impacts of climate change and hurricane risk, which can devastate infrastructure and economic sectors, as demonstrated by the extensive damage from Hurricane Maria in 2017.
Operational Costs: The economy is heavily reliant on imports, and tariffs at the port can contribute to exorbitant operational costs for businesses. Dominica maintains a high import economy with low export markets, which can make global competitiveness a challenge.
Banking and Finance: While the financial sector is generally sound, access to finance can be a major obstacle. Local banks may exhibit a low-risk appetite, which can limit lending to new or small businesses.
Administrative Systems and Bureaucracy: The process for setting up a business for citizens and foreign nationals is straightforward on paper but can be hindered by bureaucratic processes and reliance on outdated systems. Navigating certain administrative steps, particularly setting up a bank account and tax registration, often requires face-to-face processing and may be slow. Foreign nationals, in particular, may require an on-island middleman, such as an attorney, to efficiently facilitate these necessary steps.
Legal Requirements and Business Registration
The foundation of setting up your business involves selecting the appropriate legal structure and registering with the relevant government agencies, primarily the Companies and Intellectual Properties Office (CIPO).
1. Choose a Business Structure
You must select a legal entity type based on your business goals, liability tolerance, and financial resources.
Structure | Key Feature | Liability | Governing Act(s) |
Sole Trader / Business Name | Registered by an individual. Simplest to set up. | Unlimited (Proprietor is personally liable for all debts). | Registration of Business Names Act |
Partnership | Two or more individuals or corporations. | Unlimited (shared liability, unless a Limited Partnership). | Registration of Business Names Act |
Local Company | A distinct local legal entity (e.g., Limited). | Limited (Protects personal assets of shareholders). | Companies Act (Act 21 of 1994) |
International Business Company (IBC) | Suitable for international investors focused on global trade and offshore activities. | Limited. Generally, enjoys exemptions from local taxes. | International Business Companies Act (Act 10 of 1996) |
2. Register Your Business Name
The first mandatory step is to check with the CIPO to ensure your desired business name is unique and available. Once confirmed, you must submit the registration documents to the CIPO.
Note: For formal structures like a Local Company, it is standard practice to engage a local attorney to prepare the statutory declaration and other corporate documents on deed paper for submission to the CIPO.
3. Obtain Necessary Licenses and Permits
Depending on your industry and activities, you will need specific licenses. The Invest Dominica Authority (IDA) and the Inland Revenue Division (IRD) can provide guidance.
Foreign Investment Requirements: Foreign nationals establishing a domestic business that holds land must apply for an Alien Land Holding License if purchasing or leasing property.
Work Permits: If you plan to employ expatriate staff, you must secure the necessary Work Permits.
Financial and Tax Compliance
All businesses operating in Dominica must comply with tax regulations and financial reporting requirements.
1. Tax Registration
Register with the Inland Revenue Division (IRD) to obtain a Taxpayer Identification Number (TIN).
Value Added Tax (VAT): Businesses must register for VAT if their turnover exceeds the established annual threshold. As of 2025 this annual threshold is approximately USD $118,000. Investors are advised to confirm this amount with the relevant government tax authority directly, as online resources may not have been updated on official websites.
Income Tax: Local companies are subject to a Corporate Tax rate (currently 25%), while sole traders pay progressive Personal Income Tax on business profits.
2. Banking Setup
Establishing a corporate bank account is a necessary step that often proves challenging, particularly for foreign nationals. Local commercial banks are mandated to adhere to rigorous international anti-money laundering (AML) and know-your-customer (KYC) standards, leading to:
Extensive Documentation: A lengthy requirement list for proof of origin of funds, business plans, and due diligence documents.
Low Risk-Taking: Banks generally maintain conservative policies, which can make account opening and securing business credit difficult.
In-Person Processing: While some processes are online, opening a bank account usually requires a face-to-face meeting.
Employment and Location Considerations
1. Employment Regulations
If you hire staff, you must:
Familiarize yourself with Dominica's labor laws, including minimum wage and working hours.
Register as an employer with the Dominica Social Security (DSS) and make the required contributions for both the employer and the employee.
2. Setting Up Your Business Location
Choosing a location requires a realistic assessment of the island's infrastructure:
Infrastructure: Consistent and reliable electricity and internet service are critical but can be limited, especially outside of the main urban areas. Investors should confirm the quality of utilities based on their operational needs.
Logistics: The cost of renting or purchasing property must be weighed against its proximity to the port and main roads, as logistics costs are high due to the import-based economy.
Summary Statement
Establishing a business in the Commonwealth of Dominica offers unique access to a growing, nature-based economy but requires careful navigation of the local regulatory environment, infrastructure limitations, and banking protocols. Success hinges on pragmatic planning, engaging with local expertise, and direct consultation with key governmental bodies to ensure compliance and leverage available investment incentives.
Disclaimer Statement
The information provided in this guide is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive to ensure the information is accurate, laws, regulations, fees, and government policies in Dominica are subject to change without notice. We strongly advise all potential investors and entrepreneurs to independently verify all requirements, thresholds (e.g., VAT turnover), and procedures by consulting directly with the relevant government entities: the Companies and Intellectual Properties Office (CIPO), the Invest Dominica Authority (IDA), the Inland Revenue Division (IRD), and a local legal professional prior to making any investment decisions.
Government Contact Information for Business Setup and Compliance in Dominica
Government Entity | Primary Role | Contact Information | Official Website |
Companies & Intellectual Properties Office (CIPO) | Business Registration & Intellectual Property: Oversees the incorporation and registration of local companies, business names, and administers intellectual property (patents, trademarks, copyrights). | Phone: +1 (767) 266-3358 / 3359 Email: cipoclerk@dominica.gov.dm Address: Corner of Turkey Lane & Independence Street, Roseau | |
Invest Dominica Authority (IDA) | Investment Promotion & Facilitation: Acts as the "One Stop Shop" for investors. Provides guidance on investment opportunities, and facilitates the process of obtaining fiscal incentives, licenses, and permits. | Phone: +1 (767) 448-2045 Email: info@investdominica.dm Address: 1st Floor, Marpin House, 5-7 Great Marlborough Street, Roseau | |
Inland Revenue Division (IRD) | Tax Administration & Compliance: Responsible for the assessment and collection of various taxes (Corporate Tax, Personal Income Tax, VAT). Issues Taxpayer Identification Numbers (TINs). | ||
Dominica Social Security (DSS) | Employer & Employee Contributions: Manages the national insurance program. Businesses must register as employers, remit mandatory contributions for all staff, and ensure compliance with the Social Security Act. | Phone: +1 (767) 255-8311/2 Email: dss@dss.dm Address: Corner of Hanover & Hillsborough Street, Roseau |
