In the Dominican Republic, the legal framework related to FDI is broad in scope. In addition to Law 16-95, on Foreign Investment, and its regulations (380-96), various regulations are added. The treatment of the investor is clear, with few restrictions to the location, local share ownership, or thresholds of sectors (hospitality, free zones, renewable energies, border areas, telecommunications, logistics and agricultural operators); The country has specific regulations on foreign participation, tariff, tax benefits and others.

The provisions on sector-type incentives are outlined below:

  • Law No. 158-01. It was enacted to stimulate the Development of Tourism, making an investment in its infrastructures attractive. It offers benefits to any natural or legal person domiciled or who develops new projects aimed at tourist activities under concession, lease, or any other form in agreement with the State: hotels, fair facilities, golf complexes, theme parks and such related investments, port infrastructures or water supply and environmental sanitation services with a potential impact for tourist areas.
  • Law No. 184-02. It provides specific fiscal facilities to tourism development projects that are located in certain areas that the norm lists, expanding what is indicated in Law No. 158-01.
  • Law 195-13. It amends the previous rules giving other advantages in terms of geographic scope and for large repairs of aging complexes.
    The aforementioned regulations exempt for 10 years from the ITBIS corporate income tax (equivalent to our VAT), from the rate for construction and registration permits when buying the land, as well as from import tariffs on equipment, materials and furniture intended for the resort in question. The holder can also deduct from his tax base from another source up to 20% of these investment expenses during a period of 5 years. At the same time, they are exempted from a variety of costs and fees, including municipal ones, although experience shows that the latter are not usually elusive in practice. The advantages also extend to the deep repair/renovation of facilities older than 5 years, distinguishing the treatment conferred according to whether or not the seniority exceeds 15 years. The sector, moreover, is governed by Organic Law No. 541-69 and Decrees No. 1125-01 and No. 74-02. The CONFOTUR Council is key in this area, in which essential attributions of qualification of the projects fall.
  • Law No. 57-07. Regulates the development of renewable energies and exempts tariffs. Likewise, it grants generators a tax credit of up to 40% on income tax. On the other hand, companies that generate and sell electricity, hot water, steam, motive power, biofuels or synthetic fuels, generated by renewable sources, will be exempt from corporate tax for 10 years from the start of their operations and valid until 2020. These incentives include public, private, mixed or cooperative projects for the production of wind energy (with powers of up to 50 MW), mini-hydro electric, biomass, photovoltaic and solar energy installations of up to 120 MW of power per central.
  • Law No. 392-07. Aimed at promoting Industrial Competitiveness and Innovation, it creates the Center for Industrial Development and Competitiveness (PROINDUSTRIA), grants tax incentives to promote manufacturing modernization and arbitrates a special customs exemption regime in favor of companies that qualify for it. Additionally, it exempts from ITBIS imports of raw materials, industrial machinery and capital goods required by the industries detailed in Article 24 of Law No. o.557-05, after obtaining a certificate from PROINDUSTRIA.
  • Law No. 108-10, amended by Law No. 257-10. It promotes Cinematographic Activity by supporting the production, preservation and distribution of audiovisual films as well as the construction of its facilities. It includes exemptions from ITBIS and income tax, subsidies of 25% for filming costs, tax credits and assistance through the FRONPROCINE fund.
  • Law No. 8-90, on the Promotion of Export Free Zones, encourages the establishment of new free zones and the growth of existing ones, regulating their operation and development, presents the following benefits:
  • The GSP is a preferential scheme implemented by multiple developed countries whereby certain quantities of products from developing countries benefit from a partial or total reduction of customs duties.The Dominican Republic currently has Generalized Systems of Preferences by the European Union.

Special customs regime.

  • Tax incentives of up to 100% in the following lines: payment of income tax, (established by Law No. 5911 of 1962), payment of construction tax, payment of tax on the constitution of commercial companies or capital increase of the same, payment of municipal taxes that may affect the activity, all import taxes, tariffs and customs duties and other related charges.
  • Section f) of Article 17, (modified by Article 5 of Law No. 56-07), authorizes export to Dominican customs territory up to (100%) of goods and/or services, free of tariffs when it is finished products belonging to the textile chain, clothing and accessories, leather, footwear manufacturing and leather manufacturing. For all other products, you must pay 100% of the duties and taxes established for similar imports, at the time of their clearance, provided they comply.
  • All existing export or re-export taxes.
  • Taxes on patents, assets or patrimony as well as the ITBIS.
  • Consular fees for all imports destined for Free Zone Operators or Companies.
  • The payment of import taxes on certain equipment.
  • Payment of import taxes on transport equipment.
  • The country has incentive regulations in Agriculture, Mining, Telecommunications, Cyber ​​Park, Real Estate trusts, Aviation, Port Activity, Energy, Finance and Pharmaceutical, among others.