When forming a company in the Dominican Republic, one of the most common questions arises: which is better, an SRL or an SA?
Choosing the right legal structure is not just a formality. It directly affects administration, taxation, access to financing, and even the ability to attract investors. In this practical guide, we explain the differences between an SRL and an SAincluding their advantages, disadvantages, and when each structure is most appropriate.
What Is an SRL?
The Limited Liability Company (SRL) is the most common type of business entity in the Dominican Republic.
- Number of partners: minimum 2, maximum 50
- Share capital: divided into ownership quotas, not shares
- Liability: limited to each partner’s capital contribution
- Management: fewer administrative formalities than an SA
👉 This structure is ideal for SMEs, family businesses, and growing ventures..
What Is an SA?
The Corporation (SA – Sociedad Anónima) is designed for larger-scale projects.
- Number of partners: minimum 2, no maximum limit
- Share capital: divided into shares
- Liability: limited to the value of subscribed shares
- Management: requires formal governing bodies such as shareholders’ meetings, a board of directors, and a statutory auditor
👉 This is the preferred structure for large companies, investment groups, and corporations with international expansion plans..
Comparison: Capital, Partners, and Taxation
| Feature | SRL | SA |
| Allowed partners/shareholders | 2 to 50 | 2 or more (no limit) |
| Minimum share capital: | Low (from approx. RD$100,000) | High (from approx. RD$3,000,000) |
| Capital division | Ownership quotas | Shares |
| Tax regime | Same income tax and VAT regime | Same regime, but higher tax scrutiny |
| Level of formality | Less formal | High legal and accounting formality |
| Access to investment | Limited | Facilitates capital raising and share issuance |
Advantages and Disadvantages
SRL – Advantages
- Lower incorporation and operating costs
- Ideal for SMEs and family businesses
- Administrative flexibility.
SRL – Disadvantages
- Limited to a maximum of 50 partners
- Less attractive to external investors
SA – Advantages
- Unlimited number of shareholders
- Facilitates national and international investment
- Greater credibility and formality with banks and strategic partners
SA – Disadvantages
- Requires higher initial capital
- Higher legal and accounting costs
- More complex administrative procedures
Practical Scenarios
- Entrepreneur opening a restaurant in Punta Cana:An SRL is sufficient, as it does not require high capital or more than 50 partners.
- International group developing a tourist complex:an SAis more appropriate, as it allows for investors, share issuance, and a robust corporate structure.
- Startup seeking venture capital:it may start as an SRL and later convert into an SA once investment is secured.
Frequently asked questions
Which structure is best for an SME?
The SRL is the most recommended structure for SMEs due to its flexibility and lower operating costs.
What if I want more than 50 partners?
In that case, an SA is the only option, since an SRL is legally limited to a maximum of 50 partners.
SRL or SA? Don’t Make This Decision Alone. At Gadax Asesores Fiscales y Contadores, we analyze your project and help you choose the most appropriate legal structure for your business.
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