OVERALL ATTRACTIVENESS:

BENEFITS OF INVESTING IN DOMINICAN REPUBLIC:

The Dominican Republic, with a region of 18,712 square miles, it is the second largest country
(after Cuba) within the Caribbean. It got about 1,000 miles of shoreline, four mountain ranges
and fertile valleys. Because it is located between Cuba and Puerto Rico, the Dominican Republic
has convenient access to markets within the united states, Canada and Latin America, also as in
Europe. Concealed in the tropical Caribbean islands, the Dominican Republic is discreetly
becoming famous as one of the top destinations to invest in Central America and the Caribbean.
The nation's GDP development rate has been reliably positive since 2004, and expanded another
3.7% last quarter. With its central location in the Americas, a fast-developing infrastructure, and
a generous package of tax incentives, the Dominican Republic is one of the best places in the
Caribbean region to do business.

❏ COMPETITIVE COSTS FOR DOING BUSINESS: As per the report 'Caribbean and
Central American Countries of the Future 2015/2017' published by FDI Intelligence, the
Dominican Republic positions second for 'Best Connectivity in Central America and the
Caribbean'. Remarkable right now the port of Caucedo, which is positioned fourth best in
Latin America as far as quality and second for head appropriation in the locale.
Remarkably for Latin American Atlantic ports, Caucedo encourages direct access to and
from Asia. It additionally has the ability to get Post-Panamax (OVERSIZED) ships.
These traits make the Dominican Republic one of the best six nations in Latin America as
far as moderateness for the export and import of containers.

❏ INCENTIVES AND LAWS FOR FORIEGN DIRECT INVESTMENTS:

Legislation within the Dominican Republic offers incentives and exclusions within
different areas of production and services designed for the emergence and execution of
foreign investment in the nation. These sets of laws are secured by the existing
Constitution, which perceives admiration for agreements signed by the nation as well as
the international organizations of which it is a constituent.
● The Dominican Constitution concurs foreign and national investors equivalent treatment
under the law, expressing explicitly that foreigners in the Dominican Republic are
qualified for indistinguishable rights from Dominican nationals aside from with regards
to political action. Outside investors can openly hold value in nearby organizations and
joint endeavors, just as purchase land in their names. Enlistment of foreign investment is
discretionary, and no government approval is required for the repatriation of benefits.
● The Center for Exports and Investment of the Dominican Republic (CEI-RD), a
government agency made in 2013 with the precise reason of drawing in overseas
investment along with nurturing exports, helps overseas investors in their business
ventures within the Dominican Republic. A one-stop administrative centre inside the
Center helps overseas investors in streamlining government sanctions applications
connected to free zones, tourism, renewable energy, as well as the film industry, with
others.
● Under Free Trade Zones Law 8-90, companies working in free zones work in a
practically free trade setting also profit from substantial exclusions on income taxes,
duties for goods and services, export or re-export taxes, and import duties for raw
materials and office equipment for renewable 15-year periods. There are extra incentives
for companies functioning in free zones inside the border territory with Haiti, as well as
in support of companies offering financial and support services to clients outside the
Dominican Republic as of inside special International Financial Free Zones.
● Law 158-01 on Tourism Incentives awards wide-ranging tax exclusions, used for fifteen
years, in the direction of qualifying brand-new projects by home or international
investors in that sector. Amongst the projects as well as businesses that qualify for these
tax exclusions are hotels and resorts, facilities for conventions and festivals, amusement
parks, ecological and theme parks, restaurants, golf courses, and projects relating to
tourism framework. Existing hotels and resort-related investments five years or older are
excluded from 100% the taxes and duties connected to the attainment of equipment,
resources and furnishings essential to redesign those properties.
● Law 171-07 awards overseas nationals who invest a least of $200,000 in the Dominican
Republic or congregate certain criteria as retirees with exclusive benefits such as assisted
residency in the country, exclusion from duty for the importation of household goods,
 exclusion from transfer taxes for the first purchase of real estate, exclusion from taxes on
dividends and interest, as well as 50% cut-back on property and capital gains taxes.
● Growth of the renewable energy sector has been an additional priority of the government
and has pulled in considerable international investment in the past few years. There are
no taxes on earnings derived from the production and sale of electricity, hot water, steam
power, biofuels or synthetic fuels produced from renewable energy sources, nor are there
customs duties on import of any of the equipment necessary to create such businesses.
● The Dominican Film Commission has also been set up to encourage the production of
movies, TV shows and other parallel projects on the island. In certain circumstances,
producers might be suitable for a transferable tax credit equivalent to 25% of
expenditures in the Dominican Republic for such projects.

These incentives and laws encouraged enormous foreign investments which is reflected on the
FDI growth curve of The Dominican Republic.
❏ TRADE RELATIONS WITH THE U.S AND OTHER COUNTRIES:
The United States is the main foundation of the Dominican Republic’s international
trade and investment. This is fundamentally because of:

➔ The Dominican Republic’s geological proximity to the U.S.

➔ The special commercial treatment allowed to the nation under the Caribbean Basin
Initiative (CBI), which makes the United States a strong marketplace for Dominican
merchandise and,
➔ The great number of Dominican immigrants living in the United States, who are a
foundation of freely exchangeable currency.

Trade relations with other countries:

➔ The Dominican Republic also keeps up significant trading relations with all the nations in
Latin America. Of specific implication to the Dominican economy are Mexico and
Venezuela, which under the San José agreement, supply oil to the Dominican Republic
at preferential rates.
➔ Also, the country has extremely good trading relations inside the Caribbean Basin. The
Santo Domingo Chamber of Commerce has organized the “Congress of Entrepreneurs in
the Caribbean” to support the growth of commercial relationships inside the Caribbean
and to create common procedures and agreements with the nations of the Caribbean
Community (CARICOM).
➔ The Dominican Republic has reestablished its consular relations with Cuba and signed an
immigration agreement with the Cuban government. The two islands as well uphold
an outstanding cultural exchange.
➔ The Dominican Republic anticipates its connections and trade with Europe to remain to
develop extensively. France, Spain, Germany, Italy and Britain have embassies in Santo
Domingo, and eight European Chambers of Commerce work to support the growth of
trade and collaboration with the Dominican Republic.
➔ Amongst Asian nations, Japan, Taiwan and South Korea have embassies in the
Dominican Republic, which reflects their wish to endorse economic and trading
relationships with the Dominican Republic. Other countries, such as Israel, also uphold
 vastly active embassies in the country, and Russia has presently opened a consulate and
formed a Chamber of Commerce.

❏ COSTS OF INVESTING IN THE DOMINICAN REPUBLIC:

➔ Dependence on The-U.S. economy: The Dominican Republic depends on the U.S
economical-conditions vastly which can create a lot of problems such as - Dominican
Republic’s economic growth can be slowed down because of declining U.S economy.
➔ Huge Dependence on the tourism sectors: Because of current situation with the
COVID-19 pandemic the tourism sectors are taking huge hits because lots of flights are
cancelled and the whole world is on a standstill and because of the huge dependency on
tourism sector the Dominican Republic’s economic growth will be getting badly affected.
➔ Dependence on export activities: The Dominican Republic exports Gold, Tobacco,
Textiles, Electronics and Medical Supplies. These export activities earn a lot of foreign
currencies but because of current situation regarding COVID-19 the production of these
would be stopped and also the price of Gold is decreasing which will harm the economy
of the country.

❏ RISKS OF INVESTING IN THE DOMINICAN REPUBLIC:

➔ High levels of poverty and inequality: The difference between the incomes of rich and
poor in the Dominican Republic is very high. Which leads to social unrest and increase in
criminal activities.
➔ Drug trafficking related crimes: The Dominican Republic is one of the major points of
drug trafficking. A lot of drug cartels use the lenient import export and tax incentives to
cover their tracks.
➔ Increasing corruption: The corruption level in the Dominican Republic is a major
concern along with the other criminal activities.
➔ Faulty electrical supply: The electrical supply of the Dominican Republic is not stable
which is an alarming factor of investing and conducting business seamlessly because
stable electricity is one of the most important utilities of conducting a successful
business.