Located in the center of the Caribbean Sea, the Dominican Republic is the second-largest territory in the Caribbean, with an area of 18,172 square miles in the eastern two-thirds of the island of Hispaniola.
The Dominican Republic is a representative democracy that has 3 branches of government that function independently; the executive, legislative, and judicial branches. The president appoints the cabinet, enforces the laws enacted by the legislative branch, and is the commander-in-chief of the armed forces.
Thanks to its privileged geographic position, the Dominican Republic currently serves as a bridge between Europe, Asia, and the Americas, interconnecting international markets by sea and air through 12 modern ports with high-level security certifications and 5 international airports; this makes the country an ideal place to invest, thanks to its logistical platforms.
According to the World Bank, the Dominican Republic has experienced strong economic growth in recent years, averaging 6.9% during 2018, indicating that the country has one of the fastest growth rates throughout Latin America and the Caribbean region. A growth rate of 5.5% is expected for 2019, according to the Central Bank of the Dominican Republic.
The Dominican Republic has initiated a substantial reform process aimed at modernizing the legal and economic system that regulates business activity in the country. The goal is to adapt to the standards of new competitive strategies to facilitate its integration with economic groups at a global and regional level and to promote the flow of foreign capital.
Undoubtedly, the Dominican Republic has positioned itself as an attractive destination for foreign capital businesses looking to establish or expand their operations outside their home country. A politically and economically stable nation, the Dominican Republic is the most democratic country in the Caribbean. The country’s legal system is based on civil law with codified legislation.
Nationals and foreigners can use any of the corporate structures recognized by the Dominican Republic without any restrictions. Our legal system recognizes the existence or legal personality of any foreign entity or corporation, provided that the corporate existence of the entity is demonstrated by the competent authorities in its country. Additionally, it must obtain a commercial registration in the Dominican territory. This registration makes it subject to the same rights and obligations as a local corporation or company.
The Dominican tax system is mainly based on the following principles:
The Dominican Republic has several sectoral regulations that include tax exemptions. Some of the sectors with incentives and tax exemptions are as follows:
The United States is the main trading partner of the Dominican Republic (approximately 40% of total trade). Other important trading partners include China, Haiti, Mexico, India, Spain, Brazil, Germany, the United Kingdom, and Japan. The country exports manufactured products from free trade zones such as gold, nickel, protective equipment, bananas, liquor, cocoa beans, silver, and sauces and condiments. The country imports oil, industrial raw materials, capital goods, and food products. On September 5, 2005, the Dominican Republic Congress ratified a Free Trade Agreement with the United States and 5 Central American countries—CAFTA-DR (Dominican Republic-Central America Free Trade Agreement). This agreement came into effect in the Dominican Republic on March 1, 2007. The total stock of U.S. direct foreign investment in the Dominican Republic as of 2006 was US $3.3 billion, a large part of which was directed to the energy and tourism sectors, free trade zones, and the telecommunications sector. Money remittances were approximately $2.7 billion in 2006, according to the World Economic Outlook Database, October 2019. IMF.org International Monetary Fund.
