Although there is still no precedent on crowdfunding on a business perspective, there is a crowdfunding for social causes that we know of operating in the market.
Nevertheless, there still exist reservations on using any type of FinTechs by a large portion of the population in the country, mainly due to prior cases of internet hoax that have attracted investments of the public and massive losses.
There is still no specific regulation on crowdfunding platforms by authorities in the Dominican Republic.
The only crowdfunding platform in the Dominican Republic is dedicated to social causes, so there is still no precedent of crowdfunding for a business in order to generate revenues, investors, etc.
Although no particular regulation refers to crowdfunding pursuant to Law 126-02 on E Commerce, Electronic Documents and Digital Signature, electronic trade of goods and services in general is valid in the Dominican Republic, subject to any special regulation that may be established for a specific sector.
With regards to the operations describes as crowdinvesting and crowdlending, the operation by which a public offer to invest money with the prospect of perceiving a benefit at a fixed rate, or dividends, as per the provisions of Law 249-17 on Securities Market and Decree 644-12 on Regulations of the Securities Market, said operations could be consider as an initial public offer of securities and therefore it could only be performed by brokerage entities duly authorized to operate in the Dominican Republic, and subject to approval, registration and supervision of the Superintendency of Securities.
As per the other type of crowdfunding services, since there is no offer of a possible revenue based on the investment performed, the services could be provided taking into consideration the provisions of the Civil Code on donations, and the application of the provisions of Law 126-02 on E Commerce, Electronic Documents and Digital Signature.
José Cruz Campillo
Santo Domingo, Dominican Republic