INVESTMENT GUIDE

Source: Instituto Español de Comercio Exterior (ICEX) (Spanish Foreign Commerce Institute).
Web page:
http://www.icex.es/FicherosEstaticos/auto/0307/GUIA%20ORGANISMOS%20APOYO%20INVERSION%20-%20REP%20DOMINICANA_27224_.pdf


ICEX: INVESTMENT GUIDE OF SUPPORT ORGANISMS: Dominican Republic.


DOMINICAN REPUBLIC.

Note from the Adviser.

The sector with the highest Spanish implementation is tourism, where the investments continue to be implemented both from the already established groups as well as from investors. It is estimated that more than half of the approximately 60,000 hotel rooms in the country belong to Spanish companies. There are also investments in energy, banking, insurance, service concessions, industry, and other services. It is observed, in addition, that there is an increasing Spanish presence in the real estate sector in Santo Domingo and in the tourism zones in the East of the country, and in non-hotel real estate promotions.

The most frequent problems of the Spanish investors happen with the acquisition of lands. Due to shortcomings in the formalities of the Registry of property, the cases of the appearance of alleged new owners of already acquired lands are frequent. There are also cases where lots had been occupied illegally.

These and other problems are aggravated sometimes due to the functioning of the system of Justice administration. Without dealing with possible cases of corruption in the courtrooms, aired often in the mass media, the system allows dilatory tactics in a way that the investor’s rights of property cannot be exercised, giving a disproportionate negotiating power to the opposing party.

It is advised, therefore, to contact the Commercial Office and get advice from a specialized law firm with good reputation.


Luis Ruiz Arberola.
Economic and Commercial Adviser.


1.- INVESTMENT SUPPORT ORGANISMS.

The investment promotion activities in the country are done by Centro de Exportación e Inversión de la República Dominicana (CEI-RD) (Exports and Investment Center for the Dominican Republic). Within this organism, there is the Departamento de Normas e Incentivos (Norms and Incentives Department), whose main objectives are the following up of the existing normative in the matter of investment and exports, as well as to offer the information and consultation services related to existing norms and incentives in both sectors.

CEI-RD has regional offices that give exporters and investors all of the services that the institution has to offer, serving theses support branches in the promotion of the exporting offering of the country and attracting local and foreign investment.

Among its functions, CEI-RD takes part in an active way of the execution of financing programs and technical assistance for the promotion of investors and exporters, promotes the approval of new investments through the inter-institutional channels of the country, and recommends to the Executive Power the adoption of measures in order to improve the investment climate, cooperating in the international negotiations of multilateral, regional and bilateral agreements that have an influence in the exports and investment sectors.

On the other hand, it manages the registry of investments and exports of the Dominican Republic, it serves as a center of compilation and distribution of information about exports, investments and other communication materials, and it is a main point of contact with probable investors, and lastly, it facilitates the technical and specialized consultancy for producers, exporters or investors in the development of their investment initiatives and/or access to both national and international markets.

ORGANISM:

CENTRO DE EXPORTACION E INVERSION DE LA REPÚBLICA DOMINICANA (CEI-RD).

CONTACT INFORMATION:

Address: Av. 27 de Febrero esq. Gregorio Luperón, in front of the Plaza de la Bandera (Flag’s Plaza),
Santo Domingo, Dominican Republic.

Phone: (809) 530-5505.
Fax: (809) 530-8208.

E-mail: webmaster@cei-rd.gov.do

Web page: http://www.cei-rd.gov.do



2.- INVESTMENT INCENTIVES.

The judicial framework of foreign investment in the Dominican Republic is comprised of Law 16-95 sobre Inversión Extranjera (on Foreign Investment) and its implementing regulation approved through the Presidential Decree 380-96, modified at the same time by the Presidential Decree 163-97.

The principles that apply to foreign investment in the Dominican Republic are the following ones:

-Equity in the treatment of the foreign investor in relation to the national investor, according to his/her rights as well as his/her duties on the matter of investment.

-Liberalized regime without restrictions about the destiny of capitals and dividends, which can be taken out of the country in currency that can be exchanged freely.

-The investors can have the direct representation of his/her manufactured products abroad or in the country.

-Simplified system of implementation, which means saving of time and reduction of the discretionality in the actions of the competent authorities. These formalities are limited to the registry with the purpose of statistics, which has to be done at CEI-RD.

In Spain and the Dominican Republic there is the Acuerdo de Promoción y Protección Recíproca de Inversiones (Agreement of Mutual Promotion and Protection of Investments), in effect since October 7th, 1996, in which it is proposed to create the favorable conditions for investments made by investors of each one of the Contracting Parties in the territory of the other party.

There are special and tax laws that establish specific incentives destined to foreign investment, in favor of determined types of investments. The most relevant ones are specified as follows:

2.1.- INCENTIVES LAWS FOR FOREIGN INVESTMENT.

Among the most important laws, we can enumerate the following ones:

-The companies that are suppliers of goods and services for exports established as Free Duty Zones (Law 8-90 and Implementation Regulation No. 366-97) are benefited by the special regime of customs controls and tax incentives of up to 100%.

-The companies located in Special Zone of Frontier Development (created by Law 28-01) can be benefited with the exemption of all of the taxes during 20 years.

The entity that it’s in charge of giving the Certificado de Empresa Fronteriza (Certificate of Frontier Enterprise) is Consejo de Coordinación de la Zona Especial de Desarrollo Fronterizo (Coordination Council of the Special Zone of Frontier Development) (more information at Dirección General de Desarrollo Fronterizo (General Directorate of Frontier Development), http://www.dgdf.gov.do ). This organism receives, evaluates the development projects, and emits the certificate of Frontier Enterprise, establishing a set of incentives for the national and foreign private investment in order to benefit the installation of new companies.


-Law 150-97 establishes a zero rate for the raw materials, equipment and machinery for the production, applicable exclusively to the companies that are established in the country for agricultural projects.

-The Law 183-02 sobre Código Monetario y Financiero (on Monetary and Financial Code) opens up the sector of financial services to the foreign investors, and it was promulgated with the objective of establishing a regulatory regime of the national monetary and financial system in order to procure an efficacious performance of the system in an environment of competitiveness and free market.

2.2.- PROGRAM OF RESIDENCY FOR INVESTORS.

The Programa de Permiso de Residencia (Residency Permit Program) through investment, created through the Decree No. 950-01, has the objective of benefiting the foreigners that make a significant investment in the Dominican Republic, giving them a special residency, with the same rights that Law No. 95 on Immigration gives to foreigners living in the country.

In order to get more information about these and other incentives programs, consult the following websites:


http://www.cei-rd.gov.do
http://www.bancentral.gov.do
http://www.presidencia.gov.do

FREDDY MIRANDA
Translated by ORLANDO ALCANTARA