The Maquila Regime in Paraguay has emerged as a transformative program, fostering industrialization while significantly contributing to female employment. Currently, 44% of the jobs generated under this initiative are held by women, underscoring its critical role in promoting women’s economic empowerment. This remarkable achievement highlights the regime’s ability to drive job creation and expand opportunities for women, particularly in industries where they have traditionally been underrepresented.

A Catalyst for Industrial Growth and Inclusion

In recent years, the Maquila Regime in Paraguay has become a pivotal tool in the country’s industrialization efforts. Its success is measured not just in terms of economic output but also by its social impact. Natalia Cáceres, Executive Secretary of the National Council of the Maquila Export Industry (CNIME), has emphasized the program’s ability to diversify sectors and broaden employment opportunities for women. Initially concentrated on manufacturing, the Maquila Regime has expanded into services, creating technology, customer service, and logistics jobs.

One notable achievement of the program is the growing participation of women in traditionally male-dominated industries, such as auto parts and metalworking. Over the past four years, female labor participation in these sectors has risen significantly, with the auto parts industry experiencing a 17% increase and the metalworking industry seeing an astonishing 130% growth. This surge is attributed to the high demand for precision in manufacturing processes, where women’s fine motor skills contribute to the superior quality of products. “These sectors have experienced remarkable growth due to the high demand for precision in processes—a skill women excel in,” Cáceres stated.

Record-Breaking Export Growth

The Maquila Regime in Paraguay has also proven to be a powerful driver of the South American nation’s export economy. As of October 2024, maquiladora companies reported exports totaling USD 918 million. This marks a significant milestone, as exports under the program are expected to surpass the 2023 figures by USD 76 million, achieving historic levels. Such growth demonstrates the economic viability of the Maquila Regime and highlights its role in meaningfully integrating women into the workforce.

The export-driven nature of the program ensures that participants are exposed to global standards and practices, which can enhance their professional skill sets. Women employed under the regime often acquire expertise in international trade, logistics, and quality assurance, enabling them to pursue diverse career paths.

Investment in Skills Development

A key factor contributing to the success of the Maquila Regime in Paraguay is its emphasis on training and development. Companies under this program recognize the value of investing in their workforce, particularly in equipping women with skills to enhance their employability. This is particularly evident in the intangible services sector, where companies offer language training in English and Portuguese. Such programs enable women to acquire highly sought-after skills in the global marketplace, opening doors to better career opportunities.

Between 2020 and 2024, female employment in the services sector increased by 72%, reflecting the effectiveness of these initiatives. Language training, in particular, has been transformative, allowing women to access roles in customer service, international business, and remote work opportunities. These skills benefit the individuals involved and contribute to the overall competitiveness of Paraguay’s labor force on the global stage.

Empowering Women in Unique Ways

One of the most inspiring aspects of the Maquila Regime in Paraguay is its commitment to inclusive employment opportunities. Mega Plásticos, a standout participant in the program, has made headlines for its efforts to employ incarcerated women. This initiative allows these women to learn a trade, earn an income, and support their families while serving their sentences. Moreover, the program facilitates social reintegration by equipping them with skills that enhance their prospects for employment upon release. “The Maquila program has fostered inclusive employment opportunities, enabling many women to support their families and learn a trade, facilitating their social reintegration,” said the CNIME representative.

Bridging the Gender Gap in the Workforce

While the Maquila Regime’s impact on female employment is noteworthy, it also addresses broader issues of gender inequality in the workforce. The program challenges stereotypes and sets new norms for female participation in Paraguay’s labor market by creating opportunities in industries where women have been traditionally underrepresented. The growth in female employment in the auto parts and metalworking sectors is a testament to the changing landscape, where women are increasingly recognized for their skills and contributions.

The program’s focus on skill development further helps to bridge the gender gap. Women who participate in Maquila training programs often emerge with a competitive edge, making them valuable assets to employers. This, in turn, inspires other women to enter the workforce, creating a ripple effect that benefits the entire economy.

Economic Empowerment Through Export-Oriented Industries

The export-oriented nature of the Maquila Regime in Paraguay amplifies its impact on women’s economic empowerment. By engaging in industries that are deeply integrated with global supply chains, women gain exposure to international business practices and standards. This experience boosts their confidence and enhances their employability in high-demand fields. The ability to contribute to Paraguay’s export success further reinforces its value in the workforce and underscores the importance of creating equitable employment opportunities.

Looking Ahead

As the Maquila Regime expands, its potential to drive inclusive growth remains immense. By focusing on industries with high growth potential and emphasizing skill development, the program ensures that women are included in Paraguay’s industrialization journey. The projected export increase and the ongoing diversification of sectors are positive signs of sustained growth.

Moreover, the program’s emphasis on social inclusion sets it apart as a model for other countries to emulate. Initiatives like those by Mega Plásticos demonstrate that economic development and social progress can go hand in hand. The Maquila Regime proves that inclusive policies can lead to transformative outcomes by empowering women, particularly those from marginalized communities.

Conclusion

The Maquila Regime in Paraguay is more than just an economic program; it is a vehicle for social change. Promoting female employment, investing in skills development, and fostering inclusive practices have set a benchmark for other nations to follow. As the program continues to grow and evolve, it promises to create a more equitable and prosperous future for Paraguay, where women play a central role in shaping the nation’s industrial and economic landscape.

Panama is facing an economic crossroads that requires immediate and structural decisions. Carlos Berguido, president of the Panama Banking Association, recently addressed key issues such as the Social Security Fund (CSS) crisis, rising public debt, and the country’s risk rating outlook. Despite the challenges, there are positive signs with the potential arrival of new banks in Panama, which could strengthen the country’s international image.

The Challenge of Sustainability in the CSS

The Social Security Fund is facing a complicated situation, particularly in the Disability, Old Age, and Death (IVM) program. This system, vital for Panamanians’ social security, is undergoing a structural crisis that, if not addressed, could worsen in the coming years.

Carlos Berguido explained that, in previous decades, five workers contributed to finance the pension of one retiree. However, this ratio has drastically reduced to one contributor for each retiree. This is further compounded by an increased life expectancy, meaning beneficiaries receive pensions for extended periods.

“It is unsustainable to contribute for 25 years and receive benefits for 40,” Berguido stated, highlighting that the imbalance threatens the system’s stability. He says a viable solution is only possible with parametric reforms, including raising the retirement age and increasing contribution rates.

Additionally, the expert emphasized that credit rating agencies closely monitor government decisions regarding the CSS. The sustainability of this system is not only a local concern but also has international repercussions, as it can affect the perception of the country’s economic stability.

Public Debt and Finances Under Scrutiny

Another significant issue is Panama’s public debt, which has surpassed 60% of Gross Domestic Product (GDP). Although the country still maintains its investment-grade rating, fiscal stability is at risk. “The deficit and the level of debt are aspects that the rating agencies are closely monitoring,” warned Berguido.

One of the three major rating agencies recently downgraded Panama’s credit rating, while the other two issued negative outlooks for the country’s future. According to Berguido, this situation is partly due to the approval of national budgets, including high levels of spending financed by debt without clear signs of fiscal discipline.

The impact of a potential loss of the investment-grade rating would be significant. Panama would face higher borrowing costs, making it harder to access international markets and raising local interest rates. This, in turn, could affect foreign investment and the country’s reputation as a reliable business destination.

New Banks Will Arrive in Panama: A Positive Outlook for the Financial Sector

Amid these challenges, a positive development is emerging for the financial sector: the potential arrival of three new banks in Panama. Although Berguido did not reveal specific details, he highlighted the importance of improving the country’s international image to attract investment and strengthen its financial system.

“I don’t know if their arrival is related to Panama’s removal from gray lists, but improving our international image is key,” he noted. Panama’s inclusion on lists of countries lacking in combating money laundering and terrorism financing has been a barrier in recent years. However, progress in this area has generated optimism, and the arrival of new banks in Panama is a sign of renewed confidence in the market.

The diversification of the financial sector could also bring additional benefits, such as increased competition, more accessible services for consumers, and a stronger foundation for the country’s economy. The new banks will arrive in Panama, contributing to these advancements and offering fresh perspectives.

Interconnection Between Economic Issues

Berguido stressed that the problems with the CSS and public finances should not be considered in isolation. The pension system’s unsustainability and the high level of public debt are closely intertwined, and resolving them requires a comprehensive approach.

For example, an unsustainable CSS could increase the government’s fiscal burden, limiting its ability to meet financial commitments. Likewise, a weak fiscal environment could hinder the implementation of necessary reforms in the CSS, creating a vicious cycle of economic instability.

Opportunities and the Path Forward

Despite the challenges, Berguido expressed confidence that Panama can overcome these obstacles by making timely and structural decisions. “We can’t keep postponing fundamental decisions regarding the CSS and public finances,” he stated.

In the CSS’s case, parametric reforms are an unavoidable necessity. In addition to raising the retirement age, expanding the contributor base through policies that encourage formal employment could be considered.

Regarding public finances, Berguido emphasized the importance of sending clear signals to international markets. This includes implementing responsible fiscal policies and gradually reducing the deficit.

New Banks Will Arrive in Panama: A Path to Economic Stability

Although the challenges are significant, the potential arrival of new banks and progress in exiting gray lists offer hope for Panama’s economic future. The new banks will arrive in Panama at a crucial time, helping to stabilize the financial sector. Berguido concluded by emphasizing that the sustainability of the CSS and fiscal stability are essential for the country’s economic development and maintaining international market confidence.

With the right decisions, Panama has the potential to strengthen its position as a key financial hub in the region and ensure sustainable long-term growth. As new banks will arrive in Panama, the country’s prospects appear increasingly promising.

The facility will be the first spaceport in Latin America located within an airport. With the support of the United States, this ambitious project promises to create thousands of jobs and attract technological investments to the region.

The world is watching as Mexico becomes the first in Latin America to have an operational spaceport within a commercial airport. This site has been chosen as the ideal location for this ambitious initiative, which aims to position the country at the forefront of the global aerospace industry.

With technical support from NASA and financial backing from the United States, this project promises to be a turning point for the region. It represents an unprecedented technological breakthrough and has a significant economic impact on the country and its surrounding areas. Additionally, this development positions the nation as a strategic hub for aerospace operations in the region and the first spaceport in Latin America to incorporate advanced NASA-supported technology.

Mexico is set to lead with the first spaceport in an airport

The Querétaro International Airport, located in a region renowned for its industrial growth and geological stability, has been chosen as the site for the first spaceport in Latin America. This location offers exceptional features for space operations, including a runway over four kilometers long, consistent weather conditions, and a strategic position in the country’s center.

The backing of the United States Federal Aviation Administration (FAA), which has already issued an initial approval, marks a crucial step in certifying the project. This certification is expected to be finalized in the coming months, allowing construction and necessary adjustments to proceed. Furthermore, collaboration with NASA ensures that Mexico will have the technical expertise required to build a world-class aerospace port, reinforcing the significance of the first spaceport in Latin America.

How will the United States fund Latin America’s first aerospace port?

U.S. funding and support are critical to bringing this project to fruition. The collaboration includes technical and financial assistance, with NASA playing a key role in the design and operational procedures. This partnership guarantees adherence to international quality standards and positions Mexico as a vital ally in the global aerospace industry.

The FAA also provides guidance to meet regulatory requirements, while U.S. companies participating in the spaceport’s construction and operation will facilitate a technology transfer that benefits the entire region. This support underscores the U.S.’s interest in strengthening the aerospace sector in Latin America and fostering international collaboration. These efforts will solidify the region’s leadership with the first spaceport in Latin America.

How will the spaceport impact Mexico’s economy and the region?

The construction of the first spaceport in Latin America at Querétaro International Airport will directly impact the economies of Mexico and Latin America. The project is expected to generate thousands of direct and indirect jobs from the construction phase to daily operations. It will also attract technology and research companies eager to leverage the advantages of a regional aerospace hub.

Querétaro, already recognized for its thriving manufacturing industry, will become a strategic center for developing aerospace technologies. The first spaceport in Latin America will drive foreign investment and solidify Mexico’s position as a regional leader in technological innovation. Moreover, collaboration with NASA and the United States opens new scientific and educational cooperation opportunities, fostering specialized talent development.

This advancement positions Latin America as an emerging player in the aerospace industry at a regional level. Countries such as Peru and Brazil could benefit from the experience and knowledge Mexico will gain throughout this process, promoting greater integration and development in the sector.

Summary

Mexico is poised to lead Latin America by developing the region’s first spaceport in Latin America, located within Querétaro International Airport. This groundbreaking initiative, supported by the United States, promises to transform the region into a hub for the global aerospace industry. The project, funded through U.S. financial assistance and bolstered by NASA’s technical expertise, highlights international collaboration. The Federal Aviation Administration (FAA) has already granted initial approval, paving the way for construction to commence. Querétaro International Airport was strategically chosen due to its industrial growth, geological stability, central location, and infrastructure, including a runway over four kilometers long and favorable weather conditions.

The first spaceport in Latin America will generate significant economic benefits for Mexico and the broader Latin American region. Thousands of jobs will be created, both directly and indirectly, during construction and through ongoing operations. This development is set to attract advanced technology and research companies, further cementing Querétaro’s reputation as a manufacturing and innovation hub. Additionally, the collaboration with NASA and U.S. aerospace companies will foster technology transfer, adherence to international standards, and the growth of specialized talent.

This project underscores Mexico’s emergence as a strategic leader in aerospace, positioning the country as a vital ally in the global industry. The aerospace port will enhance Mexico’s economy and promote regional integration by sharing expertise with neighboring nations like Brazil and Peru. The initiative represents a monumental step forward for Latin America in aerospace, solidifying the region’s presence on the global stage while strengthening U.S.-Latin American partnerships in science, technology, and innovation.

Uruguay’s economy demonstrated remarkable growth in the third quarter of 2024, with a 4.1% increase in gross domestic product (GDP) compared to the same period in 2023. This performance, reported by the Central Bank of Uruguay (BCU), highlights a widespread recovery in economic activity, with key sectors such as manufacturing and commerce driving the momentum. The report indicates that Uruguayan economic growth is robust and resilient, positioning the country as a standout performer in the region.

The BCU’s National Accounts report emphasizes that the growth was fueled by a combination of factors, including increased oil refining and pulp production and a recovery in the commerce, hospitality, and food and beverage sectors. These industries have been instrumental in boosting the country’s economic output, demonstrating Uruguay’s ability to adapt to shifting global and local economic dynamics.

Broad-Based Economic Recovery

According to the BCU, economic growth in the third quarter was attributed to a “generalized increase in activity levels.” This indicates that multiple sectors of the economy experienced simultaneous improvements, reflecting a sustained recovery after recent economic challenges. The breadth of this recovery underscores the resilience and adaptability of Uruguayan economic growth, providing a solid foundation for future progress.

In particular, the manufacturing sector stood out for its positive performance, driven by two main factors:

• Oil Refining: Refined oil production saw significant growth compared to the same quarter in 2023 when ANCAP’s refinery was closed for maintenance. This rebound has notably impacted the country’s industrial output, underscoring the importance of operational continuity in key industries.
• Pulp Production: The commissioning of a third pulp mill in Uruguay has been a key driver of growth in this sector, solidifying its position as a pillar of the national economy. This expansion boosts exports and supports jobs and regional development, making it a cornerstone of Uruguayan economic growth.

Dynamism in Commerce and Services

The commerce, hospitality, and food and beverage supply sectors also played vital roles in economic growth during the quarter. This dynamism reflects a recovery in tourism activity and increased domestic consumption—factors supported by greater economic stability and renewed internal demand. The resurgence of these sectors highlights the critical role of tourism and consumer spending in driving Uruguayan economic growth.

The BCU report notes that improvements in these areas are crucial, as they directly impact employment and income generation for small and medium-sized enterprises (SMEs), which form an essential part of Uruguay’s economic fabric. The continued recovery of these sectors will likely provide sustained benefits for the broader economy, reinforcing the importance of fostering a supportive environment for SMEs.

In seasonally adjusted terms, Uruguay’s economy grew 0.6% between July and September 2024 compared to the previous quarter. This figure reflects a sustained positive trend, albeit more moderate, suggesting that the country is successfully consolidating its economic recovery. Such incremental growth indicates steady progress and a commitment to long-term stability, further strengthening confidence in Uruguayan economic growth.

Structural Factors Behind the Growth

Uruguay’s economic performance in 2024 is not an isolated event but the result of a combination of structural factors that have strengthened its economy in recent years. These include:

• Investments in Productive Infrastructure: The opening of the third pulp mill exemplifies how strategic investments can significantly impact economic growth and boost the country’s exports. This facility has positioned Uruguay as a leading global player in pulp production, highlighting the value of forward-looking infrastructure projects.
• Economic Diversification: Uruguay has successfully diversified its economy, reducing reliance on traditional sectors and focusing on industries like technology, services, and high-value-added goods. This diversification has enhanced the resilience of Uruguayan economic growth, enabling the country to weather external shocks and capitalize on emerging opportunities.
• Macroeconomic Stability: The country’s political and economic stability has been key in attracting foreign investments and fostering confidence in international markets. Uruguay’s consistent policy environment provides a secure foundation for sustained economic development and positions it as a reliable partner in global trade.

Challenges to Sustained Growth

Despite the recorded growth, Uruguay faces significant challenges in maintaining this positive trend over the long term. Key issues include:

• International Competitiveness: While Uruguay’s economy has shown resilience, it is essential to continue improving the competitiveness of its products and services in global markets. This involves addressing cost structures, enhancing productivity, and leveraging technological advancements to remain competitive.
• Environmental Sustainability: Expanding sectors like pulp production pose ecological sustainability challenges, requiring a balanced approach to ensure responsible economic development. This balance will be critical for aligning economic growth with global environmental standards.
• Social Inclusion: Ensuring that the benefits of economic growth reach all segments of society is essential for strengthening social cohesion and reducing inequalities. Policies that promote equitable access to opportunities and resources will play a vital role in sustaining Uruguayan economic growth.

Opportunities for Future Growth

Uruguay has excellent potential for continued growth in the coming years. Some factors that could drive its economy include:

• Opening New Markets: Diversifying export destinations and pursuing strategic trade agreements could open new opportunities for Uruguayan products. Expanding access to international markets will enhance the country’s export potential and support economic growth.
• Technological Innovation: Adopting advanced technologies in key sectors can increase the country’s productivity and competitiveness. Uruguay can strengthen its position as a regional leader in high-value-added industries by fostering innovation.
• Tourism Promotion: With its stability and natural attractions, Uruguay has the potential to position itself as a top-tier tourist destination, generating income and employment in the process. Investments in tourism infrastructure and marketing will be essential to unlocking this potential.

The 4.1% growth recorded in the third quarter of 2024 reflects the dynamism and resilience of Uruguay’s economy. Sectors like manufacturing and commerce have been key drivers of this recovery, underscoring the positive impact of strategic investments and economic diversification. This remarkable performance exemplifies how Uruguayan economic growth can serve as a model for other nations in the region.

However, to sustain this momentum, it will be crucial to address structural challenges and capitalize on growth opportunities in emerging sectors. Uruguay has the necessary foundations to establish itself as a model of sustainable development in the region, provided it continues to prioritize innovation, inclusion, and sustainability. By doing so, the country can ensure that Uruguayan economic growth remains a hallmark of its progress for years to come.

The newly incorporated free trade zone areas include facilities at the city’s port and airport, encompassing five hectares at Comodoro Rivadavia, an extension at General Mosconi International Airport, and 165 hectares in Trelew.

The Ministry of Economy has formalized the expansion of the physical space of the Comodoro Rivadavia Free Trade Zone, located in the province of Chubut, through Resolution 1363/2024. This initiative includes new facilities to strengthen logistical infrastructure, boost foreign trade, and promote strategic sectors such as the metal-mechanical, food, naval, fishing, and hydrocarbon industries.

The regulation, published in the Official Gazette, amends the Free Trade Zone Operating and Functioning Regulations established in 1996. The new spaces include five hectares at the port of Comodoro Rivadavia, an extension at General Mosconi International Airport, and 165 hectares in Trelew. According to the Ministry, this expansion aims to reduce logistical costs, streamline administrative processes, and foster the region’s export activities. This development represents a strategic step to enhance Patagonia’s commercial competitiveness.

The Bioceanic Corridor and Its Strategic Relevance

The Comodoro Rivadavia Free Trade Zone plays a pivotal role in the Bioceanic Corridor that connects the ports of Comodoro Rivadavia in Argentina and Puerto Chacabuco in Chile. This corridor strengthens trade between the Atlantic and Pacific Oceans, becoming a key route for regional integration and bilateral commercial exchange. The resolution underscores the expanded infrastructure’s role in supporting this strategic connection.

The newly added areas are tailored to meet the demands of industrial and commercial sectors requiring specific locations. While the port and airport areas will focus on storage and services, the hectares in Trelew will prioritize industrialization activities, creating a more efficient logistical ecosystem.

Innovation and Technology in Patagonia

In addition to boosting foreign trade, the resolution encourages projects related to research, technological innovation, and communications. According to the updated regulations, these activities will be prioritized when planning within the free trade zone. This aims to diversify the region’s economy by attracting investments in technology and sustainable development.

The regulatory framework also establishes a supervision and control system managed by the Oversight Committee. This body governs the zone’s operations, concessions, and users’ rights and obligations. It will ensure compliance with the free trade zone’s strategic objectives and facilitate a competitive and agile business environment.

Fiscal and Logistical Benefits for Users

Free trade zones operate under a regime that exempts goods from customs duties until they are nationalized or re-exported. This model enables companies to reduce operating costs, which is particularly beneficial for exporters facing competitiveness challenges in international markets. Additionally, these zones provide a flexible environment that allows users to conduct high-value-added commercial, industrial, and service activities.

The regulations allow direct users to transfer physical spaces or facilities to third parties through contracts registered with the Oversight Committee. This system promotes greater efficiency in utilizing the available infrastructure and fosters a dynamic business model that maximizes resource use.

Impact on Regional Economic Development

The expansion of the Argentine Comodoro Rivadavia Free Trade Zone aligns with the Ministry of Economy’s efforts to boost economic development in the Patagonian region. With a strategic location and robust infrastructure, the free trade zone is poised to attract national and international investments to diversify the local economy. Improvements in logistics and storage will benefit sectors such as metal mechanics, food processing, and fishing, among others.

Including Trelew in the expansion plan reinforces the idea of economic decentralization within the Argentine province of Chubut. With its 165 hectares dedicated to industrialization, Trelew is emerging as a development hub that will complement Comodoro Rivadavia’s logistical operations. Moreover, the combination of port and airport facilities as key points for handling goods positions the region as a strategic center for Argentina’s foreign trade.

Resolution 1363/2024 marks a significant step in strengthening Patagonia’s logistical infrastructure. Its focus on cost reduction, process optimization, and investment attraction places the Comodoro Rivadavia Free Trade Zone at the core of the country’s commercial strategy. In a competitive global context, these measures bolster Argentina’s position as a key player in international trade while offering sustainable growth opportunities for the Patagonian region.

Summary

The Comodoro Rivadavia Free Trade Zone expansion, formalized through Resolution 1363/2024 by Argentina’s Ministry of Economy, is set to strengthen Patagonia’s foreign trade and economic development. The expansion adds five hectares at Comodoro Rivadavia’s port, new facilities at General Mosconi International Airport, and 165 hectares in Trelew. This strategic move enhances the region’s logistical infrastructure, reducing costs and improving efficiency for key industries, including metal mechanics, food processing, fishing, and hydrocarbons. Additionally, it reinforces the zone’s pivotal role in the Bioceanic Corridor, linking Comodoro Rivadavia with Puerto Chacabuco in Chile to bolster Atlantic-Pacific trade. The inclusion of Trelew as a development hub underscores economic decentralization within Chubut province, focusing on industrialization to complement logistical operations in Comodoro Rivadavia. The free trade zone promotes innovation and technology, encouraging research and sustainable development investment. With fiscal and logistical advantages, such as duty exemptions and a flexible business environment, the Comodoro Rivadavia Free Trade Zone positions itself as a competitive national and international trade center. It aims to attract investments, optimize processes, and drive economic diversification in Patagonia by integrating port, airport, and industrial facilities. This development underscores Argentina’s commitment to strengthening its foreign trade framework while offering significant growth opportunities for the region.

The Dominican Republic is primarily known as a sun-and-beach destination and a prominent producer of rum and tobacco. However, a closer look reveals a richer and more complex picture of the Dominican Republic. The country has become one of the most important logistics hubs in the Caribbean and Central America. It boasts the fastest-growing economy in Latin America this year—projected to grow around 5% in 2024, according to the Central Bank of the Dominican Republic and the IMF. This growth is fueled by expanding sectors such as tourism, construction, and services.

The Role of Free Zones in Economic Development

One of the key drivers contributing to this development is the Dominican Republic free zones. With exports exceeding $8 billion, the sector accounts for 67% of the nation’s total trade. It is, in fact, the second-fastest-growing economic activity in 2024, with a 6.5% increase, surpassed only by financial services, as highlighted by the Dominican Central Bank. The modernization of local infrastructure, the professionalization of the workforce, and incentive policies have propelled its progress.

“In recent years, its attractiveness has been further strengthened by the risks posed by geopolitical conflicts that have disrupted supply chains, driving investing and exporting companies to embrace friendshoring practices. This involves establishing operations in countries like the Dominican Republic that do not pose such risks,” explains Antonio Bonet, president of Spain’s Club of Exporters.

Nearshoring as a Strategic Advantage

Adding to this is the United States’ decision to encourage the relocation of companies from Asia to destinations closer to its shores under its nearshoring policy. “These Dominican Republic free zones create significant hubs of wealth, primarily exporting to the U.S.,” says Juan Carlos Martínez Lázaro, an economics professor at IE University. Among the primary benefits of the free zone incentive system is a 100% exemption on nearly all types of taxes.

“There’s also the fact that we have a free trade agreement with the U.S.,” remarks Daniel Liranzo, Executive Director of the National Council of Export Free Zones (CNFZE), referring to the DR-CAFTA, which opens the doors to the U.S. market for goods produced in the Dominican Republic free zones.

“These zones offer a significant opportunity,” Martínez Lázaro emphasizes. Their appeal could grow even further if Donald Trump follows through on his threats to impose tariffs on Mexico, which is traditionally a key access route to the American market. However, the IE professor notes that, for now, Spanish investment in these Dominican Republic free zones remains relatively undeveloped compared to other sectors.

Current Investment Landscape in Free Zones

The Dominican Republic has 92 industrial parks operating under this incentive regime, housing 854 companies from 50 countries. Of these, only 18 are Spanish, 15 of which are small and medium enterprises (SMEs), according to the CNFZE. “There is a mistaken impression that only large companies can operate here, but that is not the case,” says Francisco Lage, president of Sym Naval, a medium-sized company based in Barcelona specializing in naval construction and technical services for cruise ships and merchant vessels.

In 2021, the company operated in a Dominican Republic free zone near Boca Chica, about 25 kilometers from Santo Domingo. Lage explains that this is due to the city’s proximity to the U.S., Mexico, Central America, Colombia, Venezuela, and Guyana.

“Additionally,” he adds, “there is the agreement to avoid double taxation, which is very beneficial for Spanish investment in terms of dividend distribution to the parent company, as well as the Social Security agreement, allowing us to transfer personnel while maintaining enrollment in Spain.”

Commercial Relations Between Spain and the Dominican Republic

To put the weight of commercial relations into perspective, the Spanish State Secretariat for Trade (SEC) indicates that cumulative Spanish investment in the Dominican Republic amounted to €1.766 billion in 2022 (the latest available data). Meanwhile, bilateral trade in goods reached €1.02 billion in 2023, with a positive balance for Spanish imports, which totaled €892 million, primarily in equipment, semi-manufactures, and food products, as detailed by Bonet from the Club of Exporters.

Spain’s Presence and Investment Opportunities

Spain is one of the leading investors in the Dominican Republic, ranking behind the United States and alternating between second and fourth place with Mexico and Canada. According to the SEC, 107 Spanish companies operated in the Dominican Republic in 2023. The primary sectors of activity include tourism (21.3%), engineering and construction (14.8%), and energy (9.3%).

Antonio Bonet highlights that “the country is advancing with strategic projects that open new doors for Spanish investment.” Examples include the development of a cruise port in Samaná, the promotion of agro-industrial and biotechnological Dominican Republic free zones in the Cibao region, and the establishment of public transportation systems in several cities.

Conclusion

The Dominican Republic has emerged as a dynamic gateway to the American market, showcasing rapid economic growth and robust investment opportunities. In 2024, its economy is projected to grow by 5%, driven by sectors like tourism, construction, and services. Its Dominican Republic free zones play a pivotal role in this progress, contributing to 67% of the nation’s trade, with exports surpassing $8 billion. These zones benefit from friendshoring and nearshoring trends, bolstered by a 100% tax exemption and the DR-CAFTA agreement with the U.S., making them attractive hubs for global investors, particularly in agroindustry and biotechnology.

Despite their potential, Spanish investment in the free zones still needs to be developed, with only 18 Spanish companies operating there. However, companies like Sym Naval have benefited from favorable tax and Social Security agreements, leveraging the Dominican Republic free zones’ proximity to major markets.

Spain is a significant investor in the Dominican Republic, particularly in tourism, construction, and energy. Cumulative Spanish investment reached €1.766 billion in 2022, with bilateral trade in goods totaling €1.02 billion in 2023. Strategic projects, such as a cruise port in Samaná and agro-industrial free zones in Cibao, present new opportunities for Spanish investors. The Dominican Republic free zones, with modern infrastructure, a skilled workforce, and strong trade ties with the U.S., position the country as a vital logistics hub in the Caribbean and a growing center for economic innovation, particularly in high-potential sectors like agroindustry and biotechnology.