Investment opportunities in the Dominican Republic.

  • By:Vianela Morillo

In previous articles, we have commented on how simple it is to conduct business in the Dominican Republic. The number of entrepreneurs and investors that consider the possibility of investing in this country is growing steadily.

The Doing Business 2016 report by the World Bank, highlights the significant progress the country has made in creating a favorable business climate, increasing confidence in entrepreneurship and the guarantee of security for investors.

Why is it beneficial to invest in the Dominican Republic?

The Dominican Republic has become one of the most attractive places for foreign investment in the Caribbean, due to the features of the country.

Among the benefits of investing in the Dominican Republic, we can mention:

  1. Excellent geographic location and a broad range of natural resources: It is an island with wonderful weather located in the center of the Caribbean, with resources that promote the tourism industry, such as beaches and mountains, as well as promoting many other industries. It is a country rich in natural resources, with minerals, agricultural products, among others. As a result, the cost of raw materials for the production of all kinds of items is cheaper.

2. Abundant highly qualified workforce at a lower cost than in most developed countries: The manpower available in the Dominican Republic has a lower cost than in most developed countries. In addition to that, this is young and skilled labor, which makes production costs minimal.

3. Security and Legal Protection for Investors: In recent years, the Dominican Government has seen the need to attract long-term capital investments from around the world. To protect this foreign investment, it guarantees the rule of law and the application of the law, resulting in a stable environment favorable for business.

4. Tourism infrastructure: Thousands of foreign nationals visit the Dominican Republic every year from different parts of the world, due to how easily accessible this country is by air through its many international airports.

5. Competitiveness in the Export Market: The Dominican Republic is a signatory of Treaties such as: the Dominican Republic – Central America Free Trade Agreement (DR-CAFTA), CARIFORO Economic Association Agreement – European Union, Free Trade Agreement between the Dominican Republic and the Caribbean Community (CARICOM). As a result, foreign companies that decide to invest in this country can have privileged access to the markets of the region and Europe, through of the different free trade agreements mentioned above.

6. Other Benefits: Great political and macroeconomic stability, excellent telecommunications infrastructure, highly developed banking and insurance system, safe free zone work environments and attractive tax and financial incentives.

Investment options in the Dominican Republic

Due to the reasons mentioned above along with many others, an extensive list of business opportunities is made available in the Dominican Republic.

Free zones

Free zones are governed by Law No. 4315, of October 22, 1955 and by Decree number 997-02. The supervision and control of the special regime operation, is overseen by the General Directorate of Customs. Commercial free zones in the Dominican Republic promote tourism trade, along with providing the opportunity to purchase goods free of tariffs and customs import taxes.

This sector has been one of the most important sectors for foreign investment, due to the array of benefits it offers.

Tourism

When you think of the Dominican Republic, the first thing that comes to mind is its lovely beaches, cheerful people and wonderful hotels.

Tourism in this country is one of the most attractive sectors for investment in recent history, as there are no restrictions for foreign capital, given that this industry has attractive tax incentives in the purchase of land for purposes related to tourism, construction, hotel provisioning and the taxes charged on the profits generated.

The management and policies of this industry are determined by the Ministry of Tourism, which in addition to its facilities in the country, has offices in various parts of the world.

Telecommunications

One of the sectors that has undergone the most significant transformation, growth and progress in the country is telecommunications.

With the application of the General Telecommunications Law (Law No. 153-98), which aims to promote the development of telecommunications, promote fair, effective and sustainable competition; defend and preserve consumers rights, promote universal service and manage the radio spectrum efficiently, it was possible to modernize the sector and achieve its compliance with the parameters established in the area by international organizations, such as the World Trade Organization (WTO) and the International Telecommunication Union(ITU).

The telecommunications industry is one of the main recipients of direct foreign investment, because although licensing companies are required to be incorporated in the Dominican Republic, there are no major restrictions regarding the nationality of capital, except for public broadcasting in which capital controlled in the country is required.

Banking

Dominican laws provide equal treatment to foreign financial intermediation entities, establishing the parameters to regulate their admission through Monetary and Financial Law, along with its regulations.

According to official statistics, the credit portfolio grew by 79,163.7 billion in 2016. These figures were published by the Superintendency of Banks of the Dominican Republic, and this data confirms that the Dominican financial system has had a significant increase in loans and financial services in 2016.

The Dominican State provides relevant assistance and constantly encourages farmers in the country by investing and modernizing this sector, issuing tax incentive policies, zero percent rates for the import of machinery, among other benefits. This has created an environment that has allowed the Dominican Republic to become the largest source of agricultural exports in the region

The main agricultural export products are sugar, fruits, tubers, coffee, cocoa and tobacco.

Mining

The Ministry of Energy and Mining, created in 2014, is the supervising entity of this industry. It is necessary to comply with environmental standards to exercise it.

The country has large mineral deposits, and is a large exporter of gold, nickel, marble, limestone, granite and semiprecious stones.

Construction 

The building industry in the Dominican Republic is one of the most dynamic within our economy and it changes constantly, building projects for the development of infrastructure in the country.

Building permits in the Dominican Republic are granted by The Ministry of Public Works and Communications (known in Spanish as MOPC) and by each municipality in which the project might be built. Currently, construction in the Dominican Republic is focused on two sectors: urban and tourism.

The tourism sector, in turn, is focused on Juan Dolio, Punta Cana (Bávaro), La Romana, Samaná, Puerto Plata (Sosúa), the urban area in houses and apartments.

Food and Fast Food Businesses

Food outlets are profitable in the Dominican economy.

Having a restaurant in which you can provide typical Dominican food or international dishes can be a good alternative. In addition, a fast-food franchise is guaranteed to succeed in the Dominican Republic. By product of the busy world we live in, fast food has become extremely popular in the world and this country is no exception.

Food and agriculture sector

With the establishment of the DR-Cafta accord, the food and agriculture sector has received a series of benefits. In general, these benefits are aimed to provide better access to the international market, reduction of the cost of supplies and machinery, improve communication with the authorities of the United States and Central America and speed up customs procedures.

There are many other options that can be considered depending on the investment or budget you have available, your idea, location in the country, among other things.

Personalized service

Please note that if you want an analysis of a specific type of commercial and economic activity in the Dominican Republic, where you will have:

  1. Demand
  2. Profitability
  3. Viability
  4. Laws and regulations that manage the specific activity.

You can approach our law firm and a specialist in the field will advise and answer all your questions and concerns. Most importantly, our specialists will provide you with the necessary guidelines so that you do not put your capital or money at risk.

We are available

STAY IN CONTACT

 

Posted in: Companies and Corporations, Dominicans abroad, Foreigners in the Dominican Republic