Located in the center of the Caribbean Sea, the Dominican Republic is the second largest nation in the Caribbean, with a territory of 18,172 square miles on the eastern two-thirds of the Island of Hispaniola.

The Dominican Republic is a representative democracy with national powers divided among independent executive, legislative, and judicial branches. The president appoints the Cabinet, executes laws passed by the legislative branch, and is commander-in-chief of the armed forces.

Thanks to its privileged geographical position, the Dominican Republic currently serves as a bridge between Europe, Asia and the Americas, interconnecting international markets by sea and air, with 12 modern ports that fulfil high standard certifications of security and safety, with 5 international airports, with a growing economic and social climate, making  Dominican Republic an ideal place to invest, thanks to its logistics platforms.
 

According to the World Bank, the country has experienced a strong economic growth in recent years, with an average of 6.9 percent for the year 2018,  indicating that the country has one of the faster growth rates throughout the Latin American and Caribbean region.  A 5.5. % growth rate is expected for 2019 according with the Central Bank of the Dominican Republic.

The Dominican Republic has been involved in the reform process aimed at modernizing the legal and economic framework that regulates business in the country. The objective has been to adapt its laws to new competitive schemes to facilitate their integration with economic groups at global and regional levels and to promote the flow of foreign capital.

DR is an increasingly attractive destination for foreign businesses seeking to establish or expand overseas operations. An economically and politically stable nation, the Dominican Republic is the Caribbean’s largest democratic country. The legal system of the Dominican Republic is based on civil law, with codified legislation.

Nationals and foreigners can use any of the corporate structures recognized by the Dominican Republic when establishing a business in the Dominican Republic without further restrictions. Our legal system recognizes the existence or legal personality of any foreign corporation or entity, subject to the presentation of the documentation proving corporate existence of the entity by competent authorities of competent and obtaining a mercantile registry, providing same rights and obligations as a local corporation or company.

The tax system of the Dominican Republic is mainly based in the following:

• Principle of Territoriality (Income from Dominican sources);
• Income derived from activities outside of the Dominican Republic made by Dominicans or resident foreigner is not taxable in the Dominican Republic with the exception of income derived from investments and financial gains from foreign sources (ie, established outside the Dominican Republic), such as dividends from shares of stock or interest from loans or bank deposits, bonds, etc.;
• Corporate Income Tax is 27%;
• Double Taxation Treaties with Canada & Spain
• Commercial profits, investment income, dividends, interests, royalty income, real property income, personal service income.

The Dominican Republic has several sectorial regulations that include tax exemptions. Some of the sectors that have tax incentives and tax exemptions are the following:

1. Free Trade Zones Law No. 8-90;
2. Renewable Energy Law No. 57-07;
3. Cinemas Law No. 108-10;
4. Tourism Law, regulated by CONFOTUR and the Law No. 158-0;
5. Mining Law, regulated by the Law 146-71:

The Dominican Republic’s most important trading partner is the United States (about 40% of total commercial exchange). Other major trade partners are China, Haiti, Canada, Mexico, India, Spain, Brazil, Germany, the United Kingdom and Japan. The country exports free-trade-zone manufactured products, gold, nickel, protection equipment, bananas, liquor, cocoa beans, silver, and sauces and seasonings. It imports petroleum, industrial raw materials, capital goods, and foodstuffs. On 5 September 2005, the Congress of the Dominican Republic ratified a free trade agreement with the U.S. and five Central American countries, the Dominican Republic – Central America Free Trade Agreement (CAFTA-DR). CAFTA-DR entered into force for the Dominican Republic on 1 March 2007. The total stock of U.S. foreign direct investment (FDI) in Dominican Republic as of 2006 was U.S. $3.3 billion, much of it directed to the energy and tourism sectors, to free trade zones, and to the telecommunications sector. Remittances were close to $2.7 billion in 2006, according to the World Economic Outlook Database, October 2019″. IMF.org. International Monetary Fund. Retrieved 21 October 2019.