Investing in the Dominican Republic

Located in the centre of the Caribbean and close to the US, the Dominican Republic serves as a strategic hub between Central, South and North America and Europe,  making it an extremely attractive location for British companies wishing to expand their operations into the Americas.

Economic growth in 2005 was 9.3% GDP, matched by low inflaction of 3.9%.  The foreign exchange rate remains stable and production of goods and services has increased to a total of US$29 billion. 

The DR has transformed its economy during the last decade, becoming an outward looking services and industrial exports led economy.  Today, the country exports a wide variety of non-traditional goods and services, based on apparel, electronic, pharmaceutical and tourism services. 

The integration of the DR into the Central America Free Trade Agreement with the US now provides new opportunities for investors with to use the DR as a platform for accesing the North American market.  They are also free to export to the European Union as the Dominican Republic is a signatory to the Cotonou Convention giving exempting its exports from tariffs.  When these factors are coupled with inexpensive labour costs and a trained and multi-lingual workforce, it is not surprising that inward foreign direct investment in 2005 increased to US$898.8 million.  Indeed the DR was recently ranked "outstanding" by the experts of the Financial Times' "Foreign Direct Investment Magazine.

What investment incentives are available?

1. Equal Treatment for local and foreign investments
2. Minimum investment restrictions
3. Free access to foreign exchange through local banks and the Central Bank     of the Dominican Republic
4. 100% repatriation of benefits
5. Technology transfer recognized as investment
6. Investment Protection through the Multilateral Investment GuaranteeAgency (MIGA) and the Overseas Private Investment Corporation (OPIC)
7. Founding Member of the World Trade Organization (WTO)
8. Geographical advantages of the Dominican Republic
9. More maritime and flight connections than any other Caribbean location
10. Competitive transportation costs

What is the DR's transport infrastructure like?

The DR has 11 seaports with distribution to the Atlantic and the Caribbean Sea.  This includes the Caucedo mega port (whose maritime terminal and logistics centre operates under the Free Zone Regime).  Caucedo has a number of specific advantages including:

a) approved by the US Container Security Initiative expediting customs clearance into the US

b) logistics platform to allow warehousing, product consolidation and other stock coordination and management activities

c) immediate proximity of an international airport for air cargo

The country has an excellent highway system connecting all major provinces.

There are eight international Airports (2 in Santo Domingo, also in Santiago, Samaná, La Romana, Puerto Plata, Punta Cana, Barahona) and there are more than 20 daily flights to and from the U.S. and Europe.

What investment opportunities are available in the tourism sector?

As a regional leader in tourism demand, the DT received 3.7 million overseas visitors in 2005, generating foreign exchange earnings of US$3.5.  The hotel industry also boasted an average occupancy rate of 73.9% in the same year, according to the Dominican Central Bank.  The World Travel and Tourism Council is currently projecting growth in total demand for travel and tourism in the country of 4.2% per annum in real terms between 7..7 and 2016.  70% of the total room offered have been constructed and operated by foreign hotel chains and there are real opportunities for British companies to invest in the sector, particularly as the industry moves into new niche sectors.

What opportunities are available in the Free Zones?

Call centres / Back Office Processing

The Dominican Republic is currently home to 35 call contact centres.  One of the strengths of the DRis the high number of bilingual (Spanish/English) service representatives (currently around 17,000).  This provides a great opportunity for call-centre firms to get access into Latin American and other Spanish speaking markets, or as a bridge to the US and the growing Hispanic community there.  The DR Government continues to invest heavily in English language training for students with programme currently to train a further 100,000 young Dominicans to speak fluent English in order to meet demand.

The costs of operating a call-centre in the DR are globally competitive (the salary of a bilingual service representative costs between US$530 and $660 per month) and the country has one of the worlds best (top ten) telecommunications networks, with 4.7 million cable and wireless lines, 200,000 internet connections and a national loop of optical fibre with the lowest cost of T1 lines in Latin America.

Software development

The Government is prioritising the development of a highly capable workforce of trained technicians, designers and managers for IT.  The country has training centres for all of the principal software design tools including Java, C#net, PHP, Cisco and Microsoft.  In 2004, a study by Microsoft found that there were 14,700 sofware developers in the DR and judged the country one of the two most attractive countries in Latin America for companies seeking to invest in this sector.

IT and software solutions which are currently being developed include management, accounting systems, database management, inventory control, sales programmes, applications for diversified business (hospitals, warehouses) solutions for e-commerce and internet banking.

Manufacturing

Electronic and electric products

In 2005 there were exports of over US$708 million from the Free zones in the Electronic, Electric and Automotive sector. It is a sector which the DR Government is prioritising as the country moves towards the forefront of the region for affordable assembly, testing and electronic products packaging. 

Medical devices

In the year 2005, the medical device industry repesented 6% of free zone exports (US$286 million) whose main destination was the US.  There are approsimately 9000 skilled workers in this sector and a number of well-known international companies have a presence in the DR (Baxter Healthcare, Abbot Laboratories).

Pharmaceutical

The DR is home to various of the top pharmaceutical companies in the world (Bayer, Novartis) which have chosen the country as a base for manufacturing their products.  The DR is now one of the largest clusters in healthcare manufacturing in the Caribbean and Latin America. 

There are currently 58 Industrial parks in operation with over 582 companies.

For full information about all of the opportunities for offshoring and investing in the Dominican Republic, download the CEI-RD's investor brochure.

Cyber Park

The Cyber Park of Santo Domingo is a technological Free Zone located just outside the capital city and less than 5 minutes away from the main international airport of the Dominican Republic.  More information about the cyberpark can be found here.