There are two special laws in effect that fundamentally represent the legal situation for cooperatives: Organic Law No. 31-63 of October 25, 1963 and Law No. 127-64 of January 27, 1964.
a) Organic Law No. 31-63 was created by the Institute for Cooperative Development and Credit (IDECOOP, for its acronym in Spanish) as an autonomous corporation of the Dominican State with legal personality, with its own and independent assets and unlimited duration, conceived with the purpose of encouraging and promoting the development of the cooperative system.
b) Law No. 127-64 of January 27, 1964, is a general norm of national enforcement that regulates Cooperative Associations. Savings and Credit Cooperatives are subject under the spectrum of the same Law and are not regulated or supervised by the Monetary or Financial Authority, at the moment there is no order of priority between the different kinds of cooperatives.
There is a general coincidence of recognition of the growth of cooperatives, despite their antiquated legislation. However, despite applicable laws, regulations and norms, there are nuances that seek to provide cooperatives with a modern legal framework that contributes to the comprehensive strengthening of cooperative societies.
Key recommendations for improvement
- The adoption of a new legal framework designated as the Cooperative Code of the Dominican Republic that seeks to strengthen Cooperative Values and Principles and the Cooperative Identity
- Recognition of the cooperative act as the axis for the treatment of cooperatives in fiscal matters.
- Ensure a tax regime that preserves the legal nature of cooperatives as private entities of social interest for the State; with a change in the paradigmatic model that involves the practice of political will with a vision of sustained development and oriented towards the full appreciation of human beings.
Prioritizing the development of strong institutional policies of cooperatives is of vital importance to strengthen governance which is only achieved with a joint effort from the entities that interact with cooperatives to standardize an updated and sustainable cooperative legal framework in its applicability.