The country’s drive national employment figures
Free zones in the Dominican Republic generated approximately 196,000 direct jobs during the first half of 2023. The free zones drove a growth in exports of 33% and an accumulated investment of 38%. In the Dominican Republic, there are 804 companies and 86 free zone parks in operation, as announced by the Minister of Industry and Commerce, Víctor Bisonó, at this year’s Free Trade Zones event, sponsored within the framework of the 35th anniversary of the Dominican Association of Free Trade Zones (Adozona).
Bisonó highlighted that in 2023, at the end of June, direct employment in free zones in the Dominican Republic totaled 196,290 while maintaining that this is the highest level of employment the entities have achieved throughout their history.
Also, he pointed out that in the last three years, exports have registered an “unprecedented” growth, equivalent to a 33% increase. Exports manufactured in free zones on the island increased from approximately US $5.9 Billion in 2020 to US $7.8 billion in 2022. Exports from free zones in the DR have exceeded the US $7 billion threshold for the first time.
“Without a doubt, the union between the public and private sectors has been a fundamentally important element so that today we can share extraordinary figures. Above all, we have positioned the country’s free zones as a safe and strategic investment destination in Latin America. They are synonymous with opportunities and offer investors a great logistics infrastructure and excellent air, sea, and land connectivity. This has allowed Dominican Republic free zones to attract the attention of important manufacturing and service companies, and airlines and logistics companies, which have opted for the Dominican Republic,” asserted Bisonó.
For his part, Luis José Bonilla Bojos, president of Adozona, the association of Dominican Republic free zones, stated: “In Latin America, we are the country with the largest number of free zone companies, exports, and jobs generated. These figures represent a competitive and significant advantage over other countries in the region.”
He added that if they establish efficient promotion mechanisms and make the necessary investments in infrastructure, free zones in the Dominican Republic will be able to double the current jobs located within their facilities.
The entities agreed on the importance of strengthening the commitment to the sustainable and comprehensive development of the sector through human capital, infrastructure development, an effective investment promotion plan, and sustainability.
Benefits of locating manufacturing operations in free zones in the Dominican Republic
Tax and Tariff Incentives
One of the primary advantages for manufacturers in free zones in the Dominican Republic is the attractive tariff and tax incentives the government offers. Businesses operating within these zones are exempt from customs duties, import taxes, and value-added tax (VAT) on imported raw materials, machinery, and equipment. This reduction in import costs significantly lowers production expenses, making it more cost-effective for manufacturers to produce goods for domestic and international markets.
The government has implemented streamlined regulatory processes within free zones in the Dominican Republic, making it easier for manufacturers to establish and operate their businesses. These zones offer a simplified and expedited permitting and licensing system, reducing bureaucratic hurdles and facilitating quicker setup times. This efficiency enhances operational flexibility and agility for manufacturers, enabling them to respond promptly to market demands.
Labor Force and Cost Advantage
The Dominican Republic boasts a skilled and competitive labor force. Manufacturers in free zones can access a pool of well-trained workers, often at lower labor costs than in many other countries. This advantage allows businesses to maintain high-quality production standards while keeping operational expenses in check. Furthermore, the Dominican Republic’s labor laws provide flexibility in hiring and managing personnel, offering manufacturers greater control over their workforce.
Quality Infrastructure and Services
Free zones in the Dominican Republic are equipped with modern infrastructure and services tailored to meet the needs of manufacturers. These zones offer reliable utilities, transportation networks, and communication facilities. Additionally, specialized industrial parks and logistics centers within these zones facilitate efficient supply chain management, reducing transportation costs and improving overall operational efficiency.
Manufacturers that locate their operations in free zones enjoy many advantages that enhance their competitiveness and profitability. The combination of tariff and tax incentives, export-oriented production, streamlined regulations, a skilled labor force, modern infrastructure, and access to regional markets creates a favorable environment for businesses to thrive. As a result, the Dominican Republic’s free zones have attracted significant foreign investment and have generated considerable job opportunities for the country’s people. Free zones in the country drive economic growth and industrial development in the island nation. Manufacturers looking for a strategic and cost-effective location to establish their operations should consider the benefits these free zones offer in the Dominican Republic.
For further information about locating manufacturing operations in a free zone in the DR, contact LATAM FDI.