The Dominican Republic has the largest economy in the Caribbean and Central American region. It has a Gross Domestic Product (GDP) of USD 61.3 billion. It’s a developing country primarily dependent on trade, tourism, agriculture and services. The country has seen the highest economic growth in Latina America within the recent years, in the year 2016 the Dominican Republic Economy has even seen a spectacular growth of 6.7%, right now is the time for doing business in the Dominican Republic.
Doing business in the Dominican Republic – Exporting
The country’s strategic geographic position, ports and airports allow easy access to the United States, Latin America and the Caribbean. If you are interested in exporting to the Dominican Republic it is recommendable to contact a Department for International Trade (DIT).
Benefits for businesses exporting to the Dominican Republic include:
- English widely spoken as a business language
- Low wage costs
- Strong legal framework
- The country is very well connected worldwide. Direct flights from all over Europe, Latin America and North America
- Stable political environment
- Free trade agreement with the European Union
- Modern transportation infrastructure
- There are no exchange controls
- Open economy with strong appetite for imported goods and technology
- Currency stability
- Advanced and reliable telecommunications infrastructure
The Dominican Republic is a member of the World Trade Organization and has received preferred treatment. The country has access to the United States through the Caribbean Basin Trade Partnership Act (CBTPA), which was an extension of the Caribbean Basin Initiative (CBI) and the Preferred Generalized System GSP.
The Cotonou Agreement with the European Community allows preferential access to
Dominican goods without quantitative restrictions. DR-CAFTA was signed and implemented by the Dominican Republic on March 1, 2007. In 1998, the Dominican Republic signed a Free Trade Agreement with other Caribbean islands (CARICOM).
Government attitude towards foreign investment
In the Dominican Republic, the government is encouraging foreign investment. The government is positioning the country as the primary destination in the Caribbean for foreign investors. Business channels are open to both domestic and foreign investors. There are no major restrictions on foreign investment and investors can repatriate their profits and capital.
The launch of free trade zones, incentives for investment in tourism and the signing of CAFTA-DR are among the principal ways the Dominican Republic has encouraged foreign investment. Over the last ten years, there has been an emphasis on restructuring the current free trade zones and strengthening the textile free trade zone, the film industry and other sectors.
Establishing business in the Dominican Republic
There are different business categories in the Dominican Republic:
- Permanent establishment
Permanent establishment/Commercial Societies:
Under Law legal commercial societies are:
• General Partnership (Sociedad en Nombre Colectivo).
• Ordinary Limited Partnership (Sociedad en Comandita Simple).
• Joint-stock Company (Sociedad en Comandita por Acciones).
• Limited Liability Company (Sociedad de Responsabilidad Limitada -S.R.L.-).
• Stock company (Sociedad Anónima -S.A.-).
• Simplified Stock Company (Sociedad Anónima Simplificada -S.A.S.-)
Branch and/or permanent establishment:
A branch is created when registered with the Chamber of Commerce in the Dominican Republic, whereas a permanent establishment (PE) is a fixed place where the business of the enterprise is wholly or partly conducted. For instance: branches; management offices; a mine, oil or gas well, quarry or other location for extraction of natural resources.
Joint venture – Sociedades de hecho:
A joint venture in Dominican Republic is a contract between two or more persons who are classified as partners with an interest in one or various specific and transitional business operations, which shall be run by one of them in his name alone and under his personal credit, with responsibility for tabulating and dividing with stakeholders the gains or losses in the
proportion agreed upon. Here you can find any further information about doing business in the Dominican Republic.