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Hiring in Dominica

Dominica, officially known as the Commonwealth of Dominica, is an Island Country in the Caribbean. Roseau is the capital and the largest city of Dominica. Dominica’s main sectors are agriculture and financial services. Its main trading partners are Trinidad and Tobago, France, the United States, China and the United Kingdom. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Dominica’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. The Labor Code stipulates that employees are entitled to 2 weeks of annual leave. Resident individuals are taxed on their worldwide income. Nonresident individuals are taxed on income derived or sourced in Dominica. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Dominica’s Labor Code and tax laws.

statutory labor requirements

Probation Period

  • The new employee may be required to serve a probationary period of not more than six months following the period of training

Annual Leave

  • The employee shall be eligible to qualify for annual vacation leave with pay after each complete calendar year of service. 
  • Minimum leave entitlement in accordance with the Labor Standards Act shall be as follows: 
    • under five years’ service - two (2) weeks; 
    • five years and over - three (3) weeks.

Public Holidays

  1. New Year's Day (1st January)
  2. Carnival Monday & Tuesday (24th to 25th February)
  3. Good Friday (10th April)
  4. Easter Monday (13th April)
  5. Labor Day (4th May)
  6. Whit Monday (1st June)
  7. Emancipation Day (August Monday) (3rd August)
  8. Independence Day (3rd November)
  9. National Day of Community Service (4th November)
  10. Christmas Day (25th December)
  11. Boxing Day (26th December)

Maternity Leave

  • Female employees who have completed one-year continuous service with the employer shall be granted maternity leave subject to the following conditions: 
    • the employee who is desirous of proceeding on maternity leave must apply at least six weeks before the expected date of commencement of maternity leave; 
    • applications for maternity leave must be supported by a medical certificate from a qualified medical practitioner stating the anticipated date of confinement; 
    • maternity leave shall cover a maximum of twelve weeks and shall be divided in not more than six weeks’ pre-natal period and not less than six weeks’ post-natal period;
    • the employee applying for maternity leave must absorb the current year's vacation leave with pay; and 
    • the employee will be granted four weeks at half pay during maternity leave.

Paternity Leave

  • There is no paternity leave

Work Hours

  • The employee will not be required to work more than forty normal hours per week.
  • The employee shall not be required to work more than eight normal hours per day and shall be entitled to not less than half an hour off for lunch.

Overtime

  • Overtime at the rate of time and one half will be paid for work done in excess of the normal hours on a normal working day, and double time for work performed on public holidays.

Notice Period

  • Where the employee intends to terminate his employment with the employer he may do so by giving the employer notice of the intended termination not later than 
    • one month before the date on which the termination is to have effect, where he is paid on a monthly basis or a basis of more than a month; and 
    • one week before the date on which the termination is to have effect, where he is paid on a basis less than a month.

Severance

  • The employer shall contribute to the redundancy fund (if any), in respect of the employee and shall make redundancy payments to the employee if entitled on dismissal on redundancy grounds.

13th / 14th Month Pay

  • No
  • There is no statutory requirement to pay the 13th or 14th month salary.
  • Employees are entitled to standard holiday pay after one year of service.

income tax

  • Resident individuals are taxed on their worldwide income
  • Nonresident individuals are taxed on income derived or sourced in Dominica
  • Taxable income includes income from business, employment, rent, royalties, interest discounts, premiums, commissions, fees etc. less deductible expenses

Taxable Income

Rate

1 to 20,000 XCD

15%

20,001 to 50,000 XCD

25%

50,001 XCD and above

35%

deductible expenses

  • The nontaxable personal allowance is XCD 30,000
  • Other allowances are granted for mortgage interest and approved donations

Deductible Expenses

Personal Allowance

XCD 30,000

Other Deductions

Mortgage Interest;

Approved Donations

immigration

  • Visitors to Dominica normally do not require a visa unless they are nationals of the Dominican Republic or Haiti.
  • Citizens of the following countries do not require a Dominica Visa
    • Antigua and Barbuda
    • Grenada
    • Saint Kitts and Nevis
    • Saint Lucia
    • Saint Vincent and the Grenadians
  • Citizens of most of the other countries such as EU countries, Argentina, Australia, Bahamas, Bangladesh, Maldives, Pakistan etc. do not require a visa for 6 months.
  • Non Nationals wishing to engage in work in Dominica must first obtain a work permit from the Labor Division. 
  • A work permit automatically confers residency status if the term of employment lasts for more than six months. 
  • All work permits are valid for one-year duration and can be renewed.
  • Residency does not however, exempt expatriates from the stipulations of the Alien Landholders Act, which restricts land purchase for non-Dominican citizens.

Type of Visa/Permit

Documentation

Validity

Eligibility

Work Permit

  • Completed application form
  • Valid Passport
  • Employment Contract
  • A medical certificate
  • Letter from employer
  • A statement from the Commissioner of Police of the applicant’s HOME STATE setting out the applicant’s police record
  • Proof that the applicant has a return ticket
  • Two (2) passport-size photographs
  • Photocopy of Treasury receipt as proof of payment of application fee
  • Marriage Certificate
  • Two testimonials one of which shall be from the last employer
  • Three copies of newspaper clippings of advertised vacant position
  • Photo copy of passport bio-data page.

1 year

  • Non Nationals wishing to engage in work in Dominica must first obtain a work permit from the Labor Division.

Residence permit

  • Application Forms
  • Medical certificate stating that the applicant is in good health and has not in the past three years suffered from any communicable disease.
  • Two testimonials, one of which should be from the applicant's last employer.
  • Statement of financial position from a reputable banker from the applicant or person accepting responsibility for the applicant.
  • Recent Police Record.
  • Proof that the applicant has a return ticket to his place of residence or has made a deposit to cover the cost of such ticket.
  • Two passport sized photos.
  • Valid passport (must be valid up to six months).
  • Photocopy of Treasury receipt as proof of payment of application fee.
  • Letter from applicant's friend/family accepting responsibility for applicant while in Dominica.
  • Marriage certificate.
  • Cover letter from applicant requesting permit.
  • Extension of Stay from Immigration Department is required during the period that application is being processed.

1 year (can be renewed)

  • Foreigners must obtain a residence permit to reside ad work in Dominica for longer than 6  months

value added tax

  • VAT applies on the sale of goods or the supply of services within Dominica, and on the import of goods into Dominica
  • The standard rate is 15% and a reduced rate of 10% applies to hotel accommodations and dive activities
  • Certain goods and services may be zero rate or exempt

VAT

Standard Rate

15%

Reduced Rate

10%

Zero Rate

0%

withholding tax

Dividends

  • Dividends paid to a nonresident are subject to a 15% withholding tax

Interest

  • Interest paid to a nonresident is subject to a 15% withholding tax

Royalties

  • Royalties paid to a nonresident are subject to a 15% withholding tax

Fees for Technical Services

  • Technical service fees paid to a nonresident are subject to a 15% withholding tax

WHT

Dividends

15%

Interest

15%

Royalties

15%

Fees for Technical Services

15%

termination

  • The employer may terminate the employment of the employee without notice or payment of any severance payment or other terminal benefits where the employee has been guilty of serious misconduct affecting his employment.
  • Where the employee is guilty of an offence in breach of his condition of employment or any misconduct that is not serious or a breach of any work rule governing his behavior or any misconduct such that the employer cannot reasonably be expected to continue to employ him if it is repeated, the employer may give the employee a written warning. 
  • If the employee after being warned is guilty of the same or similar offence or misconduct in the following six months, the employer may terminate his employment.
  • The employer may terminate the employment of the employee because the employee was redundant in accordance with the provisions of the Protection of Employment Act
  • Where the employee intends to terminate his employment with the employer he may do so by giving the employer notice of the intended termination

statutory benefits

  • These are mandatory benefits as postulated by law
  • These include probationary period, annual leave, public holidays, sick leave, maternity leave, overtime pay, notice period, and severance pay
  • Statutory benefits also include social security benefits

Statutory Benefits

Probationary Period

Annual Leave

Public Holidays

Maternity Leave

Sick Leave

Overtime Pay

Notice Period

Severance Pay

Social Security Benefits

 payments and invoicing

  • The tax year is the calendar year
  • Individuals are required to file separately
  • Joint filing is not permissible
  • Tax returns must be filed by 31st March following the tax year and the balance of tax is due upon the filing of the return
  • A pay-as-you-earn (PAYE) system is used to deduct tax from the salaries of employees
  • A late filing penalty of 5% of the tax due may apply
  • The penalty for late filing is 10% of the outstanding tax
  • Interest accrues at 1% thereof

ease of doing business

  • The ease of doing business index is an index created by Simeon Djankov, an economist at the Central and Eastern Europe sector of the World Bank Group.
  • Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
  • According to the World Bank Dominica ranked 111th in the World in 2019 in terms of ease of doing business.

employee accruals

   
Christmas Bonus%

0%

Christmas Bonus Over Vacations %

0%

Severance per Year %

Not applicable - paid in lieu of notice

Vacations % Employees with under 5 years of service are entitled to 2 weeks of annual leave (2.74% of annual salary). Employees with more than 5 years of service are entitled to 3 weeks of annual leave (4.109% of annual salary)
Notice %

Employees are entitled to 30 days of notice period for one year of service or more (8.24%)

Christmas Bonus Over Notifications% 0%
Vacations Plus% 0%
Total percentage of Salary (yearly) The total employment accruals as a percentage of salary per anum are equal to 11.07%

employer accruals

Additional information (Country Accruals)

   
Social Security 7.00%
with redundancy 0.25%
Maternity 12 weeks
Christmas Bonus  
Vacations 9.59%
Descritption: 

Screenshot_1 (1)

 

 

Employer Accruals Additional information

    Employment Accruals
Annual Leave Minimum leave entitlement in accordance with the Labor Standards Act shall be as follows:
• under five years’ service - two (2) weeks;
• five years and over - three (3) weeks.
This equals 3.8% (2/52 weeks) of annual income
Maternity Leave Maternity leave shall cover a maximum of twelve weeks and shall be divided in not more than six weeks’ pre-natal period and not less than six weeks’ post-natal period. The employee will be granted four weeks at half pay during maternity leave. This equals 23% (12/52 weeks) of annual income
Overtime Overtime at the rate of time and one half will be paid for work done in excess of the normal hours on a normal working day, and double time for work performed on public holidays. Depends on the number of overtime hours worked
Severance The employer shall contribute to the redundancy fund (if any), in respect of the employee and shall make redundancy payments to the employee if entitled on dismissal on redundancy grounds. Subjective
Social Security The employer must contribute to social security at a rate of 7% of an employee’s earnings, up to a ceiling of XCD 6,000 per month This equals 7% of annual income

 

 

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