Guidance

Doing business in the Dominican Republic: Dominican Republic trade and export guide

Updated 24 June 2015

This guidance was withdrawn on 30 January 2020

Department for International Trade withdrew this publication because it was out of date.

See current information to:

• explore opportunities for exporting to the Dominican Republic in our country guide on great.gov.uk
• find out how UK organisations can manage risk when doing business in the Dominican Republic

Managing risk

Find out how UK companies can control risks when doing business in Dominican Republic.

Export opportunities and advice

Find more export advice and explore opportunities overseas on great.gov.uk.

1. Dominican Republic export overview

The Dominican Republic has the largest economy in the Caribbean and central American region. It has a Gross Domestic Product (GDP) of USD61.3 billion. It’s a developing country primarily dependent on agriculture, trade, tourism and services.

The country’s strategic geographic position, ports and airports allow easy access to the United States, Latin America and the Caribbean.

Contact a Department for International Trade (DIT) Dominican Republicexport adviser for a free consultation if you are interested in exporting to the Dominican Republic.

Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for the Dominican Republic.

UK companies operating in the Dominican Republic include AEI Energy, BT, Aggreko International, Bupa International, Diageo, Ernst & Young, Pinewood Studios and Unilever.

Benefits for British businesses exporting to the Dominican Republic include:

• low wage costs
• English widely spoken as a business language
• strong legal framework
• direct flights from UK to Punta Cana and routes via Paris, Madrid or the US into Santo Domingo
• free trade agreement with the European Union (EU)
• no exchange controls
• open economy with strong appetite for imported goods and technology
• stable political environment
• currency stability
• modern transportation infrastructure
• advanced and reliable telecommunications infrastructure

2. Challenges doing business in the Dominican Republic

The 3 main challenges facing business in the Dominican Republic are:

• scores 123rd on Transparency International’s Perceptions of Corruption Index
• bureaucracy
• energy crisis which could affect operations

3. Growth potential

3.1 Economic growth

The Dominican economy has grown more than any other Latin American economy in the last 50 years. GDP grew by 4.1% in 2013 – the ninth successive year of growth, higher than the Latin American average.

The Dominican Republic is a member of the World Trade Organization (WTO) and the Caribbean Community (CARICOM).

3.2 Free trade agreements

The Dominican Republic has 2 main free trade agreements:

• DR-CAFTA, an agreement with central America and the US
• Economic Partnership Agreement (EPA), an agreement with the EU and CARICOM

Under the EPA, 80% of the goods produced in the EU will receive duty free access to Caribbean markets by 2024. Many tariffs have already been reduced.

4. UK and the Dominican Republic trade

The UK is the sixth largest foreign direct investor with a total value invested of USD 1.0 billion. UK exports were valued £78.9 million in 2014, up from £70 million in 2013.

Top 10 UK exports to the Dominican Republic in 2014:

• beverages (mainly whisky)
• books, newspapers, pictures and other products of the printing industry
• road vehicles (including air cushion vehicles)
• boilers, machinery and mechanical appliances
• glass and glassware
• plastics and plastic products
• electrical machinery and equipment and parts thereof
• pharmaceutical products
• tanning or dyeing extracts
• organic chemicals

5. Opportunities for UK businesses in the Dominican Republic

Department for International Trade (DIT) provides free international export sales leads from its worldwide network. Search for export opportunities.

5.1 Agriculture

Agriculture is an important sector which contributes around 8% of GDP. In recent years it has with average annual growth of 4.4%.

The main opportunities for UK companies are:

• technologies to obtain or produce organic fertilisers at lower cost
• heavy machinery, tools for field crops (including service and training)
• training for crop protection
• establishing a tissue culture laboratory to multiply cacao plants
• help with the procedures required to obtain fair trade certifications
• irrigation systems and fumigation equipment
• modern equipment for processing fruit
• animal genetics for the beef and milk industries
• advice and best practice for all areas of the sector

Contact Leonora.Dipp@fco.gov.uk for more information on the agriculture sector.

5.2 Education

The Ministry of Higher Education has a generous budget. It has signed agreements with universities around the world, including the UK, in order to send Dominican students to study abroad at postgraduate level. They are looking to sign more agreements, especially in technical subjects such as engineering and mathematics.

There are opportunities for UK companies with:

• overseas scholarships at tertiary level
• high quality English teaching for Dominican teachers
• educational supplies and equipment
• creation of a high-end British School

Contact Leonora.Dipp@fco.gov.uk for more information on the education sector.

5.3 Infrastructure

The construction sector in the Dominican Republic has grown significantly over the past 30 years due to the availability of low rate loans and mortgages.

Main opportunities in this sector are:

• Continuity of the Santo Domingo underground
• Construction of the second phase of Santo Domingo Beltway
• construction of highways, roads and bridges
• construction of hospitals
• rehabilitation of ports
• urban, regional and transportation planning and project management
• products and services in the ‘green building’ sector
• provision of materials, such as steel

There are also possible future projects with:

• a railway project linking Santo Domingo and Santiago
• development of the San Souci district of Santo Domingo
• construction of two international airports (north and south western regions)

Contact Leonora.Dipp@fco.gov.uk for more information on the infrastructure sector.

5.4 Energy

The Dominican Republic has traditionally depended upon imported diesel oil and hydro power for electricity generation. In 2013 work started on 2 new state financed coal fired power stations and a private sector financed Liquified Natural Gas (LNG) terminal. Improvements to renewable energy production are also underway.

The grid is state-owned and distributed through 3 state entities. Generation is by private companies. Costs to the consumer are very high due to losses, theft, low collection rates and frequent power cuts. Most business and many private homes provide their own back-up sources.

The country’s first wind-farm is already in service, providing 5% of the demand.

The main opportunities in this sector are:

• construction and servicing of power generation facilities and equipment
• development of bio-fuels, bio-mass, wind power, wave turbines and solar/photovoltaic (PV) power
• construction of mini hydro generation plants to supply electricity to isolated rural areas of the country
• supply of equipment for hydroelectricity, such as dam building equipment and engineering machinery etc

Contact Leonora.Dipp@fco.gov.uk for more information on the energy sector.

5.5 Retail

The Dominican Republic middle class is interested in consumer articles such as designer clothing and jewellery etc. Topend outlets such as Louis Vuitton are present, but better opportunities exist for lower end brands.

Most fruit, vegetables and meat are produced locally. A large proportion of processed food and drink products available in the country are imported, especially from the USA. In meat there is a niche market for imported products.

Very few British products are currently available in supermarkets in the Dominican Republic. Most supermarket chains are family owned businesses, but have shown some interest in sourcing UK products. However, it will take a strong combination of quality, price and niche appeal for a product to break into the market.

Contact Leonora.Dipp@fco.gov.uk for more information on the retail sector.

6. Start-up considerations

British companies can approach the Dominican market in several ways:

• set up an agency
• appoint a local agent or distributor
• form a joint venture
• manufacture under licence agreement with a Dominican company
• acquire all, or part of a Dominican company

To export successfully to the Dominican Republic, you will probably need to employ an agent or a distributor. In some cases where health certification is required a local agent is a legal requirement.

The distribution and representation of foreign made goods and services in the Dominican Republic are governed by Dominican Law 173.

There are laws which offer incentives investment into the Dominican Republic. Information on these can be found on the the Latin American Trade & Investment Association (LATIA) website.

7. Legal considerations

Good legal advice should always be sought. The Dominican Republic Embassy and GOV.UK have a list of lawyers

7.1 Standards and technical regulations

Suppliers and manufacturers have an obligation to make sure products are safe. Products must meet relevant safety standards, have clear instructions for proper use and include warnings against possible misuse.

The General Directorate of Quality Standards System (DIGENOR) enforce mandatory product safety and information standards and bans on unsafe goods.

7.2 Labelling regulations

Consumer goods must be marked with the country of manufacture prior to sale. Packaged goods must also indicate the:

• quality or purity
• ingredients
• net weight or measure of the contents

All sizes and weights of the net contents also must be converted to the metric system.

Goods not complying with these requirements may be imported but not sold to consumers until conversion is made.

7.3 Intellectual property rights

Dominican law regulates the transfer and diffusion of technology and protects industrial property rights. This law is in accord with the provisions of the agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and other international agreements.

The National Industrial Property Office (ONAPI) is in charge of granting patents and registering industrial property. Civil and criminal sanctions may be applied in case of an infraction of industrial property rights.

There is currently a serious problem in the Dominican Republic with counterfeit products, especially with alcoholic beverages, tobacco and pharmaceuticals. The Attorney General’s Department is taking action but so far there have been no large scale prosecutions. It is proving difficult to reduce the scale of the problem.

8. Tax and customs considerations

Taxes are governed by the Dominican Tax Code (11-92) and are collected by the General Directorate of Internal Revenue (DGII). Taxes and mandatory contributions are equally applicable to Dominican and foreign investors and are payable at the same rates.

Social Security must be paid for employees.

8.1 Value Added Tax (VAT)

VAT (known as ITBIS) is charged at a rate of 18%. Goods and services which are exempt from ITBIS include basic foods, medicines, fuel and books.

8.2 Corporate income tax

The current corporate rate of income tax in the Dominican Republic is 27% of taxable profits.

Resident corporations are subject to tax on their:

• Dominican source income
• foreign source income derived from investments and financial gains

8.3 Capital gains tax

Capital gains on assets located in the Dominican Republic are currently subject to 27% tax.

8.4 Asset tax and withholding tax

An annual tax amounting to 1% of total assets will be payable if your assets exceed RD$ 700 million (approximately £100 million).

Dividends are subject to 10% withholding tax.

Both asset tax and withholding tax may be credited against corporate income tax.

8.5 Selective consumption tax (ISC)

ISC is applied on the purchase price or import of certain goods. The rate of ISC tax varies according to the item being taxed.

8.6 Customs

For countries belonging to the WTO, the customs office of the Dominican Republic now uses the General Agreement on Tariffs and Trade (GATT) rules of valuation. This uses the value of the goods including Insurance and Freight (CIF) listed on the commercial invoice.

You can find more about import tariffs in the Market Access Database (MADB).

8.7 Free trade zones

Law 8-90 encourages the establishment of new free zones and the growth of the existing ones. It regulates their operations and development. Free zone operators and companies located in industrial parks enjoy 100% exemption from various taxes. There are currently 53 Industrial Parks, housing over 500 companies.

9. Entry requirements

You are not required to hold a visa for the Dominican Republic for short visits. However, your passport must be valid for at least twice the length of your stay.

All visitors require a ‘tourist card’ which you can get:

• from the Dominican Republic Embassy in London
• on arrival at the airport for USD10 (payable in cash)

Tourist Cards are initially valid for a 30 day stay, but can be extended locally by paying for an extension when departing the country. Departure tax is USD 20.

If you want to work in the Dominican Republic you will need a resident permit.

9.1 Travel advice

If you’re travelling to the Dominican Republic for business, check the Foreign and Commonwealth Office (FCO) travel advice beforehand.

10. Contacts

Contact the Department for International Trade (DIT) Santo Domingo team for more information and advice on opportunities for doing business in the Dominican Republic.