The legal framework of the Dominican Republic provides investors with all types of incentives to make their business profitable and sustainable. The following laws have been strategically established to promote growth in key industries of the economy.
Foreign Investment: Law 16-95
Law 16-95 regulates foreign investment in the country, it grants the following benefits:
- Equal treatment between national and foreign investment, securing them the same legal protection, without any discrimination.
- Free Repatriation of Dividends and Capital. All the capital invested, capital gains and all dividends declared each fiscal year can be remitted abroad in foreign currency.
- The only restrictions are on the disposal of toxic or radioactive waste no generated in the country, activities affecting public health and/or the environment, and production of equipment and materials directly related to national defense, unless the approval of the President of the Dominican Republic has been obtained.
- Simple Registration Procedure. It is sufficient for the foreign investor to notify about their investment to the CEI-RD within 90 days after its placement in the country in order to automatically obtain a Certificate of Foreign Investment Registration.
- Free access to foreign exchange through local banks and free currency conversion.
Free Zones: Law 8-90
The Dominican Republic has 57 duty-free parks and more than 560 companies operating under the system, generating more than 160,000 jobs. With a long history of free zones, dating back to 1969 when the first park was established, the country has succeeded in providing an encouraging environment for manufacturing businesses. As a result, the value-added goods from the free zones have become the major source of Dominican exports.
Free Zone Incentives grant companies with 100% exemption for a 15-year term over the following:
- Income tax.
- Taxes on construction and on loan contracts for the registration and transfer of real estate through the corresponding Free Zone Operator.
- Taxes on the constitution of commercial enterprise or their capital increase.
- Taxes from the municipalities.
- All import, tariff, customs rights and other taxes affecting raw material, equipment, construction material, buildings, office equipment, etc. for free zone.
- All export and re-export taxes, except the ones established in sections f) and g) of Article 17 of the Law.
- Consular fees.
- Taxes on patents, assets and equities, as well as taxes on the transfer of industrial goods and services (ITBIS).
- Payment of import taxes on related equipments and necessary tools for the installation and operation of low-cost dining rooms, health services, medical assistance, day-care services and any other kind of equipment promoting the welfare of employees.
- Taxes on the import of transport equipments, trucks, garbage collectors, and minibuses for the transportation of employees to and from the work centres, with the previous approval of the National Free Zones Council (CNZFE) in each case.
Development of Renewable Energy: Law 57-07
This Act provides exemptions for all taxes to equipments and machinery imported by companies or individuals, needed for the production of energy from renewable sources. 100% exemption of the taxes for all projects based on renewable energy sources that comply with this Act, including the exemption of ITBIS (sale tax) and all other taxes on final sale.
Exemption applications must be evaluated and approved by the National Energy Commission.
Special Zones for Border Development: Law 28-01
It has been designed to attract investment to the border region with Haiti. It declares as national interest the protection of industries around the border regions in order to encourage development. It grants tax exemptions on net income taxes, ITBIS (sale tax), custom duties, among others.
Telecommunications: Law 153-98
This law regulates the telecommunications industry in all matters concerning the entry, operations, and permits for transmitting and receiving signals under any electromagnetic means. It sets the stage for fair competition, as well a planned and organized telecommunications industry in the Dominican Republic.
Promotion of Tourism Development: Law 158-01
It grants incentives to companies operating in the country in tourist areas designated as special interest to the nation. Laws No. 184-02 and 266-04, modifies law 158-01 by adding more tourist poles to articles 5 and 7.
Companies that qualify under this law are one hundred per cent (100%) exonerated from the payment of the following applicable taxes:
- National and municipal taxes that are collected for the use and issue of construction permits, including the land purchase acts, as long as they are used for one of the purposes described in Article 3 of the present law.
- Import taxes and other taxes such as rates, rights, surcharges, including ITBIS (sale tax), which were applicable on the equipment, materials and furniture that were necessary for the initial furnishing for establishing operations.