At only a two-hour flight south of Miami, the Dominican Republic is a Caribbean paradise for luxurious beach vacations. The country has so much more to offer, especially for foreign investors looking to find new business opportunities in the Caribbean region. Here are 3 reasons why you should invest in the Dominican Republic:
1. Political and economic social stability
The Dominican Republic has seen substantial GDP growth and significant reduction of poverty over the past two decades. The country’s solid legal framework and various incentives for business, as well as other forms of support from Government entities, provide a political and economically stable business environment. The Dominican Republic has trade agreements with almost 50 countries. Since the 1990s, the Government of the Dominican Republic has been carrying out important reforms in trade policy with the task of increasing the competitiveness of the economy and achieving greater participation in international markets. The main functions of the agreements are trade liberalization, and the elimination of a wide variety of tariff and para‐tariff restrictions that contribute to expanding and strengthening the country’s export capacity. While the domestic language is Spanish, English and French are commonly spoken business languages. The country’s geographical location and strong infrastructure to North and Latin America and the rest of the Caribbean, make for a strategic location to establish foreign investment.
2. Real estate investment opportunities
Across many industries, various advantages are put in place to level the playing field for foreign businesses, such as fair treatment for local and foreign investors, repatriation of 100 percent of profits, free conversion of funds, free access to international currency in local commercial banks and the Central Bank with a fast and easy registration process.
Furthermore, according with Law 171-07 on incentives foreign real estate investors, they can obtain a resident permission in 45 days.
3. Attractive tax incentives explained in detail.
Over the past 2 decades, the Dominican Republic has opened its borders to international business as part of its strategy for economic growth. For example, tax incentives exist where the Dominican State recognize that a foreign investment and technology transfer contributes to domestic economic growth and social development. This has been reflected in the current legal framework as well as in the international agreements that have recently been signed. Some of these tax incentives include Law No. 16-95: On Foreign Investment, where the Dominican State recognizes that foreign investment and technology transfer contribute to the economic growth and social development of the country.
Law 158-01 (CONFOTUR)
a) 100% exemption from the payment of national and municipal taxes charged on the incorporation and capital increase of companies, use and issuing of construction permits, tax on real estate property (IPI) and 3% tax savings on the transfer of real estate property rights.
b) 100% exemption from the payment of all import taxes and other taxes such as tariffs, rights, recharges, including the Value added Tax (VAT or “ITBIS”) applicable to the equipment, materials, and movables necessary for the first equipment and putting into operation of the corresponding tourism facility; and,
c) 100% exemption from the payment of taxes or withholdings that may arise from any local and international financing and from the accruing interests, granted to companies that are object of these incentives”
d) 100% exemption for 15 years from Annual Property Tax which represents 1% of the exceeding value of RD$ 7,438,197 or about US$148,000 of the property (Updated in June 2019). This means that a property worth US$200,000 will be taxed its surplus amount of US$52,000 at 1%, so US$520 annually.
e) 100% exemption from the tax in case of capital increase, sale (for example in case of resale of the property), or contributions in kind.
f) 100% exemption on the tax declared for rental revenues which represents 27%.
In short, the Dominican Republic offers numerous opportunities for foreign investors and international businesses looking for new opportunities. We believe the domestic business environment is dynamic and ever-evolving for the better.