Joint Ventures in the Dominican Republic: A Partnership Without Legal Personality and Why That Matters

The most consequential fact about a Dominican joint venture is what it is not: a company. Foreign investors accustomed to incorporating a JV vehicle discover that Dominican law recognizes joint ventures as purely contractual arrangements — ‘joint participation’ entities — with no separate legal personality, no corporate name, no independent assets and no registered domicile of their own.

The legal architecture is straightforward. Two or more persons with merchant status take an interest in one or several defined, transitory business operations. One participant executes the business in its own name and on its own credit, then accounts to the others and divides profits and losses in the agreed proportion. The Dominican Supreme Court of Justice confirmed the framework in 2020 (SCJ Sent. 0744/2020, 1st Chamber, July 24, 2020), describing the joint venture as an agreement between autonomous parties pursuing a common goal through pooled resources and shared administration — while each retains its own legal identity.

The practical consequence follows directly: because the venture is invisible to third parties, the executing partner contracts personally, bears personal exposure, and holds the venture’s assets in its own name. Everything that would normally be handled by corporate law — management powers, accountability, exit, deadlock — must be built by contract, or it does not exist. A common and costly error is treating the JV agreement as a light memorandum of understanding; when the relationship sours, the non-executing partner discovers it holds contractual rights against its partner, not ownership rights over the business.

Where the contract is silent, the law fills gaps with the rules for general partnerships, applied to the extent compatible with the participation-entity provisions — a default regime most sophisticated parties would not choose deliberately.

For cross-border projects, the contractual JV remains attractive precisely because of its flexibility and fiscal transparency: it can be assembled and dissolved around a single development, tender or investment without the cost of a corporate wind-down. But that flexibility is only as good as the drafting. The alternative — incorporating a Dominican SRL or corporation as the JV vehicle — trades flexibility for limited liability, and the right choice depends on the project’s risk profile.

Our corporate team structures and drafts international joint venture agreements for Dominican projects, balancing partner representation, management control and exit mechanics. Before you commit capital to a Dominican partner, let us review the structure.

Do you want more information about our advisory services for executing Joint Ventures in Dominican Republic? Contact Us.

ABOUT THE AUTHOR: Felipe Castillo is a Partner leading the Foreign Investment, Real Estate & Tourism areas at Arthur & Castillo Advisers and Consultants in the Dominican Republic. He specializes in foreign investment, real estate and international business (Master in International Business, Entrepreneurship and Finance Studies from Georgetown University in Washington, D.C. & Masters in International E- Business in Universitat Pompeu Fabra in Barcelona) with more than 20 years of experience in Foreign Investment, Free Trade Zones, International Business and Cross Border Real Estate practice. He is a Certified Business Bankruptcy Expert and English and Spanish Interpreter.

Email: fcastillo@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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