Key takeaways
- Confirm title and file early; a licence may cover a pending application or registered mark.
- ONAPI licence recordal is optional public notice, not a prerequisite to assert licensed rights.
- Quality control provisions protect the mark, not just the brand image.
- Royalties paid abroad carry withholding and transfer pricing attention.
- Franchise relationships can attract the Law 173 protection that constrains termination.
Licensing is how most international brands actually enter the Dominican market — a local partner operates, invests and sells under your name, and you take a royalty. It is capital-efficient and fast, and it puts your most valuable asset in someone else’s hands. Three things make the difference between a licence that protects you and one that does not.
First: confirm title and file early
Dominican trademark rights are territorial and filing priority matters, but first-to-file is not absolute. A licence may concern a pending application or registered mark, and Law 20-00 also recognises specified earlier-use, better-right, trade-name, well-known-sign and bad-faith grounds. Clear the register, document title and file early rather than assume either party acquires clean title merely by filing.
The prudent sequence is usually to clear and file the mark before launch or licensing — see our guide to trademark registration — not because a licence is impossible earlier, but because unresolved title puts the transaction at risk. Where a relationship already exists on the wrong footing, correct the chain of title before expanding the licence.
Second: decide whether to record the licence
A licence concerning a pending or registered mark may be recorded at ONAPI to give public notice. Amended Article 90 states that recordal is not a prerequisite to assert rights under the licence and that no service fee is charged. Recordal may still help register transparency and diligence; assess it separately from an assignment, whose recordal governs third-party effect.
Third: control quality, in writing and in practice
A trademark indicates origin and consistency. A licence that lets a partner use your name without standards is not merely a commercial risk to reputation; it undermines the function the mark performs. Serious licences specify the products or services covered, the standards to be met, inspection and audit rights, approval of marketing and packaging, and the consequences of failing to meet the standard.
The provisions have to be exercised as well as drafted. A quality clause never enforced is difficult to rely on later when it becomes the basis for termination.
Franchising adds layers
A franchise is a licence plus an operating system: the mark, the know-how, the manuals, the training, the supply arrangements and the fee structure. Each element needs its own treatment. The manuals and training materials are protected under copyright rather than trademark, and any assignment or licence of them should be explicit. Territory, exclusivity and performance targets should be defined precisely, since these are what disputes are usually about.
The termination question — and Law 173
This is the point international franchisors most often miss. Depending on how the relationship is structured and registered, an exclusive local partner may fall within the protective regime of Law 173, which constrains unilateral termination and can require just cause or compensation — the framework set out in our guide to distribution agreements and Law 173, including how DR-CAFTA changed the position for qualifying agreements with US parties.
A franchisor who assumes a thirty-day termination clause governed by foreign law will simply work has assumed the thing most likely to be untrue. The question belongs at the drafting stage, when the structure can still be chosen.
The money
Royalties paid to a foreign licensor are a cross-border payment with tax consequences: withholding applies to payments abroad, and where licensor and licensee are related parties the pricing falls squarely within transfer pricing scrutiny, because a royalty reduces Dominican taxable profit. Documentation of the rate’s commercial basis should exist from the start rather than be assembled when queried.
Our IP desk clears and files the mark, drafts the licence, handles optional recordal where useful, and coordinates the tax treatment with our fiscal desk.
Frequently asked questions
Can I licence a brand I have not registered in the Dominican Republic?
A licence may concern a pending application or a registered mark. Filing early remains prudent because registry priority matters, but Law 20-00 also recognises specified earlier-use, better-right and well-known-sign claims.
Does a trademark licence need to be recorded at ONAPI?
A licence concerning a pending or registered mark may be recorded at ONAPI to give public notice. Under amended Article 90, recordal is not required to assert rights under the licence and carries no service fee.
Can I terminate a Dominican franchisee under my contract’s notice clause?
Not necessarily. Depending on how the relationship is structured and registered, it may fall within the Law 173 protective regime, which constrains unilateral termination and can require just cause or compensation.
What tax applies to royalties paid abroad?
Royalties to a foreign licensor are subject to withholding, and where the parties are related the rate falls within transfer pricing scrutiny because a royalty reduces Dominican taxable profit.