The Dominican Republic is one of the countries with the highest growth in recent years and the favorite destination of the Caribbean. This growth responds mainly to the country’s foreign investment policy and we want to show you the reasons why you should invest here.
Free Trade zones
Our industrial parks are located in circumscribed areas where companies can manufacture goods and provide services in a free trade environment and under a special tax regime.
The free trade zone system in the Dominican Republic is an important pillar of the economy and an attractive investment opportunity for any investor, as it is one of the most advanced in the world, which encompasses financial, logistic, and other services. For example, during the last decade, American companies have relocated their customer service and call center operations to Dominican free trade zones, and more than 70 software development companies have set up their call centers there.
Tourism
With about 1300 km of beaches among mountains and landscapes, the Dominican Republic is the most visited tourist destination in the Caribbean. In 2015 the hotel capacity grew to 70.000 rooms, due to the 5.6 million foreign tourists who visited the country. One of the most attractive things about the island is the 32 world-class golf courses in operation.
Investment in the industry is diversified across hotels, spas, vacation homes, ecotourism, and health sectors. The latest World Bank report indicates that «the Dominican Republic has experienced strong economic growth in recent years, with an average of 5.1% per year between 2008 and 2018, the second-highest in Latin America.» In addition, they state that this rate “accelerated to an average of 6.6% per year between 2014 and 2018,” which made the Dominican Republic the fastest growing economy in the region in that period.
Banks
The law grants foreign banks equal treatment as local financial institutions. A foreign bank wishing to operate or establish representative offices in the DR will need authorization from the Monetary Board under the same conditions established for Dominican banks.
Incentives to investments
The Dominican Republic has one of the most wide-ranging systems of incentives for investors. For better reference:
- Incentives for investors in the Tourism Industry
Law 158-01 on Tourism Incentives, as amended by Law 195-13, and its regulations, grants wide-ranging tax exemptions, for 15 years, to qualifying new projects by local or international investors. The projects that qualify for these incentives are:
Hotel and resorts
Ecological parks
Golf courses
Recreational ports and seaports
Facilities for conventions, shows, concerts, and cultural activities
The existing hotels and resort-related investments that are five years or older are granted 100% exemptions from taxes and duties related to the acquisition of the equipment, materials, and furnishings needed to renovate their premises. On the other hand, hotels and resort-related investments that are fifteen years older will receive the same benefits as a new project if the renovation involves 50% or more of the promises. Finally, individuals and companies get an income tax deduction for investing up to 20% of their annual profits in an approved tourist project.
- Incentives to Investors in Free Trade Zones
Under Free Trade Zones Law 8-90, its amendments and regulations, companies operating in free trade zones function in a nearly free trade environment and benefit from considerable tax exemptions for renewable 15 years periods, such as no income, goods and services, municipal, export or reexport taxes, no import duties nor related charges on raw materials, equipment, construction materials, vehicles and other goods necessary for the operation of the business.
- Special incentives for Border Region Trade Free Zones
Under Law 28-01, companies operating in the free trade zones within the border region with Haiti are entitled to additional benefits, such as an extension of the exemption period from 15 to 20 years. Also, the government encourages this by giving preferential loans with lower interest rates to these companies.
- Incentives for Investors in the Film Industry Film Industry
Law 108-10 created a legal framework to promote the development, production, distribution, and preservation of movies, TV shows, music videos, and other audiovisual productions, as well as the construction of film-making studios and movie theaters. The most important incentives contemplated in the legislation are exemptions from the payment of the goods and services tax, income tax exemption for the construction of movie theaters and film or recording studios, and a transferable tax credit of 25% of expenditures in the Dominican Republic, subject to certain requirements.
If you want more information, please feel free to get in touch with us.
