Foreign Direct Investments in the Dominican Dominican Republic

In the Dominican Republic, foreign investment is promoted and encouraged. Over the last 10 years, it has become one of the most preferable destinations for direct foreign investment due to its strategic location in the Caribbean for import and export. The Dominican Republic (“DR”) legal system is in continuous modernization in favor of foreign investment. The law sets the principle of equality regarding national and foreign investments.

Dominicans and foreigners enjoy the same rights and obligations. However, for specialized sectors (such as mining, health, pharmaceutical and aviation) there are restrictions on foreign investment in the Dominican Republic, requiring a minimum capital investment of Dominican origin.

Foreign investment in the following business areas is prohibited: (i) waste and trash when toxic, dangerous or radioactive, not produced in the Dominican Republic, (ii) activities that affect public health and the environment and (iii) manufacturing of elements directly related to national security and defense (except when authorized by the government).

There is no formal foreign investment clearance process. The Export and Investment Center (CEI-RD) manages a foreign investments registry that grants some benefits, including the possibility to obtain residency by investment, when the investment is equal to or greater than USD 200,000, as long as the consulate and immigration requirements, among others, are met. This registration is not mandatory.

The following conditions apply equally to nationals and foreigners. When incorporating a company, partners, managers, and directors have an obligation to disclose the identity of the ultimate beneficial owners to the Mercantile Registry and the Tax Administration and to maintain updated information with periodical reports or corporate updates.

Prior to operating a business, it is necessary to have (in terms of functionality, competence, employment, etc.) certificates of registration, licenses and authorizations, especially for the health and pharmaceutical sectors, film industry, shipping, mining, electricity and energy, construction, banking, aviation, free zones, tourism, real estate development and agriculture. This applies equally to nationals and foreigners.

The issuance of bearer shares is prohibited; only registered shares are allowed.

The financial obligors (banks, stock exchange, trust, insurance, savings, etc.) and non-financial obligors (lawyers, notaries, accountants, etc.), under the law of money laundering and financing of the terrorism, have an obligation to report suspicious transactions under the thresholds of the law to the competent authorities.

The Dominican Republic has financial and legal stability. In addition, disputes can be resolved: administratively (when a Dominican public institution is involved or through conciliation between the parties); judicially or through arbitration. Regardless of subject matter or complexity, judicial cases take time. Parties can reach to a settlement at any stage of the case or can choose arbitration as an alternative dispute resolution. Since 2018, the Dominican Republic has specialized courts for insolvencies and reorganization bankruptcies.