Why Invest in Dominican Republic?
Why Invest in the Dominican Republic? Discover Top Reasons with Oceanus DR
The Dominican Republic stands out for its unique stability among island nations. Combining this stability with its beautiful beaches, stunning mountains, and welcoming people, the country offers an unbeatable investment environment. Here are six reasons why the Dominican Republic, especially the Puerto Plata area, represents the best of the Caribbean for investors.
- Economic, Social, and Political Stability
The Dominican Republic is known for its economic, social, and political stability, making it an attractive destination for foreign direct investment (FDI). The country has maintained an average annual GDP growth rate of over 5% for more than 25 years. In 2022, it received $4,010.4 million in FDI, reflecting investor confidence.
- Richness and Variety of Natural Resources
The country boasts a great diversity of natural resources, including beaches, turquoise waters, fertile soils, warm climate, and mineral deposits, making it ideal for investment in multiple sectors.
- Advanced Infrastructure and Connectivity
Strategically located in the center of the Caribbean, the Dominican Republic offers access to over 1,000 million consumers through free trade agreements. Its infrastructure includes 8 international airports, 12 commercial ports, and over 200,000 km of roads.
- Growth of Foreign Direct Investment (FDI)
Between 2010 and 2020, the country received $27,934 million in FDI, with an annual average of $2,539 million. The main FDI sectors are consumption and industry (23.87%), tourism (21.35%), real estate (14.88%), mining (13.80%), energy (8.30%), and free zones (7.78%).
Free Trade Agreements
The Dominican Republic has several free trade agreements that provide access to over 900 million people and consumers worldwide.
- DR-CAFTA: Free trade agreement between the Dominican Republic, Central America, and the United States of America.
- EPA: Economic Partnership Agreement between the European Union and CARIFORUM (Caribbean Community and Dominican Republic) countries.
- RD-CARICOM: Under this agreement, the Dominican Republic has tariff-free access to Caribbean Community (CARICOM) countries: Barbados, Guyana, Jamaica, Suriname, Trinidad and Tobago.
- DR-Central America: Since 1998, the Dominican Republic has a free trade agreement with Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.
- DR-Panama: In addition to being linked to a free trade agreement with Panama through DR-CAFTA and the DR-Central America agreement, the Dominican Republic has a special pact with Panama.
- GSP: The Generalized System of Preferences is a program through which Japan, New Zealand, Norway, Switzerland, and Turkey grant preferences to developing countries, such as the Dominican Republic, to trade with them under privileged conditions.
- Strong Legal Framework and Investment Incentives
The Dominican government promotes FDI through a robust legal framework and various tax incentives and exemptions. These incentives include tourism development, free zones, creative industries, textile chain, and renewable energy sources.
Export Incentives
- Law 8-90 on Free Trade Zone Promotion: Provides a 100% exemption on the payment of the Transfer Tax on Industrialized Goods and Services (ITBIS).
- Law 392-07 on Competitiveness and Industrial Innovation: Certain raw materials, industrial machinery, and capital goods specified in Article 24 of the Law are exempt from 50% ITBIS collection at Customs.
- Law 84-99 on Export Promotion and Activation: Exempts import taxes for those who purchase goods abroad for export.
- Law 56-07 Prioritizing the Textile Sector: Provides special tax incentives for companies in the textile, apparel, accessories, leather, and footwear manufacturing sectors. Additionally, it increases to 100% the proportion of goods these companies can sell in the country.
- Human Talent
The Dominican Republic is committed to competitive human talent, environmental sustainability, and technological innovation. Dominicans are known for their hospitality and service-oriented attitude, enhancing visitor experiences and strengthening the business environment.
Investment Grade
According to ICEX Spain, rating agencies assign the Dominican Republic the following grades: Standard & Poor's BB (-) stable and Moody's Ba3 positive. Although the country is two levels below "Investment Grade," it maintains a solid rating in the 4th risk group for short, medium, and long-term. Challenges include improving electricity supply, reducing bureaucracy, and increasing access to credit.
These reasons make the Dominican Republic an attractive and promising option for investors seeking a stable and prosperous environment for their businesses.