The Foreign Investment Law identifies three types of investment: Foreign Direct Investment (FDI), Foreign Reinvestment and New Foreign Investment.

FDI consists of the contribution made by individuals or legal entities residing abroad to the capital of a company that operates within the Dominican Republic. As a derivative, foreign reinvestment consists of reinvesting in the same company the profits generated from the FDI previously registered in the country. On the other hand, new foreign investment works practically the same as foreign reinvestment, with the only difference that the reinvestment is made in a company other than the one that generated the profits.

The limitations for foreign participation in the economic activities of the Dominican Republic are few; However, the participation of radio broadcasting companies, aviation (national flights) or assets of electricity companies have certain restrictions. Dominican Law establishes three areas in which foreign investment is prohibited:

  • Disposal or disposal of toxic, dangerous or radioactive waste.
  • Activities that affect public health and the balance of the environment.
  • Production of materials and equipment directly linked to defense and / or national security; except in this case whenever there is an authorization from the Executive Power.
  • The Dominican Republic has a strategic location.
  • Political stability.
  • The fastest growing economy in the Latin America, Central America and the Caribbean region, with a growth of 5.1% in 2019; Once again, the country ranks as the fastest growing country in all of Latin America, with an expansion fifty times higher than the average for the region.
  • In 2018, growth was 7% according to data from the Central Bank of the Dominican Republic.
  • The accumulated Growth between 2008 and 2018 has been 5.1%.
  • Access to preferential markets-5 trade agreements.
  • FTA-USA and Central America.
  • Partial Scope Agreement with Panama.
  • FTA with Central America.
  • FTA with CARICOM.
  • Economic Association Agreement between ACP member countries and the EU.
  • Reduction in the poverty rate from 39.7% in 2012 to 23% in 2018.
  • The best connectivity in the region.
  • 8 airports.
  • 73 international destinations.
  • 12 commercial ports.
  • 3 cruise ports.
  • Free repatriation of dividends and capital.
  • Equal treatment of local and foreign investments, guaranteeing legal protection for foreign investment.
  • Minimum restrictions to access business opportunities in any sector of the economy.
  • The investment has been broadly defined to be applied to traditional capital, technological brands and financial mechanisms.
  • Tax exemptions.
  • Modern road network.
  • Advanced and reliable telecommunications infrastructure.
  • Expedited investment registration process.
Law 16 of 1995 (16-95) on Foreign Investment, and its regulations (380-96), amended by Decree 163-97, present the following characteristics:
  • Law 16-95 provides substantial incentives to foreign investors, allowing them rights.
  • The Law also liberalized the framework for investors.
  • Investments can now be made in real estate, the acquisition of fixed capital and in the form of liquid capital for companies (existing, new branches).
  • Allows investors to freely repatriate capital and dividends in foreign currency. Investors only need to register (for statistical purposes only) at the Central Bank of the Dominican Republic within the first ninety days of making their investment and they will receive a registered Investment Certificate.
  • Applies the principle of equal treatment of national and foreign investments, guaranteeing them the same legal protection, without any discrimination. This principle is translated in the first place in the elimination, for the law, of the prohibitions and restrictions that were established for foreign investment in some sectors, such as public service companies, mining, banking, insurance, transportation, etc.
  • The new law only restricts the investment of foreign capital to activities related to toxic waste, armaments, the environment, merchant marine and insurance.
  • Facilitates ET operations.

Forms of investment.

Article 1 of the law defines what is considered an investment, admitting three categories:

  1. Direct Foreign Investment: Contributions from abroad, owned by foreign individuals or legal entities or of national natural persons residing abroad, to the capital of a company that operates in the national territory.
  2. Foreign Reinvestment: Foreign investment made with all or part of the profits from a Registered Foreign Investment in the same company that generated them.
  3. New Foreign Investment: Foreign investment made with all or part of the profits from direct foreign investment duly registered in a company other than the one that has generated profits.