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14 economic sectors to invest in the Dominican Republic

by | Nov 4, 2023

The doors of the Dominican Republic are open to receive foreign investment in any of its economic sectors. Although tourism, exports, and free zones are the main economic drivers in which businesses can invest in the Dominican Republic, there are other sectors where local and international entrepreneurs can invest, as well.

According to the Export and Investment Center of the Dominican Republic (ProDominicana), the leading investment sectors in the country are the following:

Tourism

The crown jewel and main economic engine of the Dominican Republic is tourism. The COVID-19 pandemic dealt a hard blow to the country as it was forced to close its borders and prevent the arrival of tourists. However, the recovery and resilience the sector has shown have been recognized internationally and have been an example of how this sector can rise from the ashes of the pandemic.

In recent times, month after month, the arrival of foreign visitors has broken its records. Companies that invest in the Dominican Republic in its tourism sector will find many opportunities.

Free trade zones and manufacturing

The free zone model implemented in the country is one of the most successful worldwide, as it represents an ideal space for new companies to establish themselves to invest in the Dominican Republic and, in the process, generate manufacturing jobs and economic benefits in the region where they are located.

Electricity and energy

This is a sector that has excellent growth opportunities for parties that seek to invest in the Dominican Republic. According to the ProDominica business guide, the DR electricity market “consists of three state distribution companies, one state transmission company, and dozens of private, semi-public, and public generators.”

For example, at the beginning of the year, Fitch Ratings recognized that the Dominican Republic has shown clear evidence that reforms to reduce long-term financial losses in electric energy are working.

Agriculture

In this area, the Dominican Republic is characterized by its high-quality products such as coffee, sugar, cocoa, and tobacco. In the latter, for example, by the end of 2021, tobacco exports from the Dominican Republic reached a record of US$1.2 billion.

According to the Central Bank’s report on the Dominican economy, “during the first quarter of 2022, the added value of agricultural activity registered an interannual growth of 2.1%, supported by the increase of 1.1% achieved in agriculture and 3.8% in livestock, forestry and fishing.

Construction

Construction has a significant weight for those who seek to invest in the Dominican Republic. Data from the Central Bank indicate that construction contributes 12% of the Gross Domestic Product. In the first quarter of 2022, construction represented 8.3% of the labor market, with 383,331 employees.

ProDominicana indicates that “foreign participation in a contract for the construction of works cannot be greater than 50%, although up to 70% may be accepted when national participation cannot be greater than 30%.”

Banking

A sector in constant improvement that has sought to remain at the forefront of competitiveness, quality, and inclusion. According to Rosanna Ruiz, president of the Association of Multiple Banks of the Dominican Republic (ABA), in the Dominican Republic, multiple banks climbed 36 positions in terms of development and 51 positions in terms of ease of access to loans, which shows an increasingly competitive environment in which to invest in the Dominican Republic.

Mining

Among the minerals found on the half island, gold, silver, nickel, copper, bauxite, marble, limestone, gypsum, and granite stand out, as well as larimar and amber. Mining exploitation is a sector that, in the case of the Dominican Republic, is shared by local companies but also international ones that seek to invest in the Dominican Republic.

The Film industry

With the Law for the Promotion of Cinematographic Activity, the Dominican Republic has attracted investments in this area to make films. ProDominicana explains that thanks to this law, there are some tax exemptions and special permits for those who seek to invest in the Dominican Republic in this industry.

From The Godfather Part II (1974) to The Lost City (2022), without forgetting The Return of Xander Cage (2017), the Dominican territory has appeared countless times on the big screen.

Health and pharmaceutical

The country has solid legislation for the establishment of businesses related to health and distribution of medicines. Likewise, there are laws and regulations to conduct medical research.

On the other hand, medical tourism has gained ground in the country. According to the Dominican Health Tourism Association (ADTS), the country earns more than RD$13 billion annually from this economic activity.

Insurance

In this area, the Dominican Republic manages these issues through the Insurance Superintendency, created in 1969 thanks to Law 400 “due to the need to control and supervise the insurance market.” The Superintendency depends on the Ministry of Finance.

According to the ProDominicana investment guide, “In general, the legislation does not discriminate regarding the capital composition of insurance companies, except in the case that the foreign company that seeks to invest in the Dominican Republic comes from a country that would not allow the operation of a Dominican insurance company.

Ports

Thanks to its twelve ports, the Dominican Republic plays a fundamental role in the maritime trade of the region. ProDominica explains that although the supervision and operation of the ports depend on the Port Authority, concessions can be granted without restrictions on foreign capital as long as a local agent of the company is established in the country.

Telecommunications

The deployment of the 5G network throughout the country has substantially improved telephone and internet connectivity. At the end of July, so far this year, foreign investment destined for telecommunications reached US$1.9 billion, equivalent to an expansion of 8%, according to the Presidency of the Republic. This value represents a growth of 20% compared to the same period in 2019.

Government

With the General Directorate of Public Contracts, the Dominican public sector opened up to public contracts to acquire goods or services. Through public tenders, companies can participate in this sector to invest in the Dominican Republic.

Aviation

The best example regarding this sector is the arrival of the Dominican airline, Arajet. It is worth noting the commitment to transform the country’s south, led by Hahly Pichardo, president of FTS Holdings Group, to implement a maintenance center for Boeing in Barahona.

Investing in the Dominican Republic presents a highly lucrative opportunity for many reasons. Firstly, the country boasts a rapidly growing economy, with a consistent annual GDP growth rate and a strong focus on tourism, manufacturing, and agriculture, as well as the other sectors summarized in this blog post. Its strategic geographical location in the heart of the Caribbean positions it as a gateway to both North and South American markets, offering access to over 900 million consumers. Additionally, the Dominican Republic benefits from a stable political climate and a favorable business environment, with policies that incentivize foreign investment. The government has implemented various initiatives to attract and support investors, such as tax incentives, free trade zones, and streamlined administrative procedures.

Moreover, the country has a well-developed infrastructure, including modern ports, airports, and a reliable energy grid, further facilitating business operations. With a skilled and competitive labor force, as well as a large pool of bilingual professionals, the Dominican Republic provides a favorable environment for businesses to thrive. Lastly, the nation’s natural beauty and vibrant culture make it an attractive destination for both tourism and businesses that seek to invest in the Dominican Republic, creating additional opportunities for entrepreneurs. All these factors combined make the Dominican Republic an enticing and profitable destination for those seeking to expand their business ventures.

Contact LATAM FDI to discuss your foreign direct investment plans in Latin America.

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