The Dominican Fideicomiso: How Trusts Law 189-11 Changed Estate and Investment Planning

For most of its history, the Dominican Republic, a civil-law jurisdiction, simply had no trusts. That changed on July 16, 2011, when Law 189-11 imported the figure of the fideicomiso, and with it a planning tool that families and investors in common-law countries had used for centuries.

The structure will feel familiar to anyone who knows an Anglo-American trust, with local characteristics. One or several settlors transfer property or rights to one or several trustees, who hold them as a separate, ring-fenced patrimony managed for the benefit of designated beneficiaries, and returned or delivered as the trust deed instructs when it expires. That separateness is the engine of the whole figure: trust assets are, as a rule, beyond the reach of the settlor’s and the trustee’s creditors, though the law carves out specific exceptions under which trust assets may still be pursued, a nuance that makes drafting and timing critical.

The law created several trust types for distinct purposes: estate planning; cultural, philanthropic and educational; investment; real estate investment and development; public securities offerings; construction and housing project administration; and guarantee trusts securing obligations. Each must be registered with the Chamber of Commerce of the trustee’s domicile. Trusteeship, meanwhile, is a regulated business: entities incorporated for the sole purpose of acting as trustees must register with the Dominican tax authorities, which supervise them, and certain regulated financial players, fund managers, securities intermediaries, multi-purpose banks, savings and loan associations, may also serve as trustees with the Monetary Board’s authorization.

Taxes shadow the trust through its entire life: the transfer of assets into and out of the trust, and the income its assets generate, each carry rules, and, in specific cases, exemptions, that should be modeled before signing, not after. Implementing regulations further shape how the law operates in practice.

For foreign investors and families weighing asset protection in the Dominican Republic, the working question is rarely “is a trust possible?” but “is a fideicomiso the right vehicle compared to a company, a Bien de Familia or direct ownership?” Arthur & Castillo’s trust and estates team evaluates that question case by case and structures fideicomisos end to end.

Do you want more information about our Trusts Law services in Dominican Republic? Contact Us.

ABOUT THE AUTHOR: Maria Arthur Rodger is a Partner leading the Private Client, Successions and Tax areas at Arthur & Castillo Advisers and Consultants in the Dominican Republic. She specializes in private client, successions, tax, real estate valuation and advisory (Master in Tax and Finance Studies from Georgetown University in Washington, D.C. & Universitat Pompeu Fabra in Barcelona) with more than 20 years of experience. She is also a Certified Public Accountant (CPA), Certified Valuator, Business Bankruptcy Expert and English and Spanish Interpreter.

Email: marthur@aclaw.com

Disclaimer: This publication is not intended to provide advice or suggest a guaranteed outcome as individual situations will differ and the situation may have changed since publication. For specific advice on the information provided and related topics, please contact the author.

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