Doing Business in the Dominican Republic | Global Law Group

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[co-authors: Luis Pellerano, Urania Paulino, Gustavo Mena]*

1. What is the current business climate in your jurisdiction, including the main political, economic and / or legal activities on the horizon in your country that could have a significant impact on business?

The Dominican Republic has been one of the fastest growing economies in Latin America and the largest in the Caribbean for several years. GDP is expected to grow 5.5% in 2021 despite the COVID-19 pandemic, mainly thanks to tourism, remittances, foreign direct investment, mining revenues, free trade zones and telecommunications. The country offers tax incentives for investments in tourism, renewable energy, film production, the development of the Haiti-Dominican Republic border and the industrial sector.

In January 2020, the government announced a special incentive plan to promote high-quality investments in tourism and infrastructure in the southwestern region of the country. In addition, the Special Zones for Border Development Law extends incentives for direct investment in manufacturing projects on the Haiti-Dominican Republic border for 30 years. These incentives include exemption from income tax on the net taxable income of projects, exemption from sales tax, exemption from import duties and tariffs and other related charges on equipment and machinery. imports, as well as on imports of lubricants and fuels (except gasoline) used in the processes.

In February 2020, the Dominican government promulgated the Law on Public-Private Partnerships (PPP) to establish a regulatory framework for the initiation, selection, award, procurement, execution, monitoring and termination PPP. This law was created to promote the development of infrastructure and other projects in the country and provides for:

  • Forty-year concession contracts.
  • Five-year exemptions from the tax on transfers of goods and services (ITBIS).
  • Accelerated depreciation regimes.

The Dominican Republic is also a signatory of the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), which promotes trade between the United States, Central America and the Dominican Republic.

2. From which countries do you see the most inward investment? What about outgoing?

(i) Most inbound investments – United States, Canada, Spain, Mexico, Brazil, France, Italy, Netherlands.

(ii) Most foreign investment – Haiti, United States, Puerto Rico and Panama

3. In which sectors / industries do you see the most foreign investment opportunities?

During the last decade, foreign investments have been mainly directed towards the commercial, tourist, real estate and mining sectors. However, in the past two years, foreign investment has increased mainly due to investment in the communications and power sectors.

We continue to see opportunities in the mining and power sectors, particularly renewables and natural gas. Tourism still seems promising, in particular specialized tourism such as health or golf. There is also an opportunity in the logistics / hub sector, given the geographic area of ​​the country.

4. What advantages and pitfalls should others know about doing business in your country?

ADVANTAGES :

Bilateral agreements to promote and protect FDI

Laws that encourage a variety of sectors

Various free trade agreements

Strategic location

First place in competitiveness in the region by the World Economic Forum

Encourage and promote PPP

Economic, social and political stability

CHESS:

Taxes

Government bureaucracy for certain regulated sectors

Electricity deficits of the country

Labor regulations

5. What is a cultural fact or custom about your country that others should be aware of when doing business there?

The Dominican Republic is known for its hospitality and hospitality.

*Pellerano Nadal


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