Canada, with US$187.8 million, Brazil, US$146.3 million, and Panama, US$138.3 million, are the subsequent largest investors. By the end of the third quarter of this year, the Dominican Republic had received US$3,571.8 million in foreign direct investment (FDI), of which US$1,680.3 million came from the United States, Spain and Mexico, representing 47% of the total accumulated through September.
Although the January-September 2024 period saw a decrease of US$250.3 million compared to 2023, the United States remains the leader in foreign investment flows into the country during the first nine months of this year, reaching US$785.2 million. This reflects sustained investor confidence in the Dominican Republic as a stable and attractive destination for foreign capital.
By the end of the third quarter, Spain’s FDI had decreased by US$44.1 million compared to last year. Yet, according to statistics from the Central Bank, it ranked second among countries with the highest investments, accumulating US$499.2 million. Despite the reduction, Spain’s commitment to sectors such as tourism and energy has ensured its place as one of the top investors in the Dominican Republic.
Mexico ranked third in the list of top investor countries during the first nine months of 2024, with a total of US$395.9 million, an increase of US$166.2 million compared to 2023. This sharp rise underscores Mexico’s growing interest in diverse sectors, including energy and manufacturing, as the Dominican Republic is a gateway to the Caribbean and Central American markets.
Canada, with US$187.8 million; Brazil, US$146.3 million; and Panama, US$138.3 million, occupy the following positions. These countries have concentrated their energy, real estate, and tourism investments. In contrast, El Salvador has not shown any investment since 2016, and Australia has not invested in the Dominican Republic since 2020. These gaps indicate opportunities for countries to re-engage with the Dominican market as it continues its progressive economic growth.
FDI flows highlight foreign investors’ confidence in the Dominican Republic as a business destination. According to the United Nations Conference on Trade and Development (UNCTAD), the country has been the second-largest recipient of FDI in the region, behind Mexico, since 2022. This accomplishment reflects a combination of strategic location, business-friendly policies, and a diversified economy that appeals to global investors. The United States, Spain, and Mexico have been consistently ranked as top investors in the Dominican Republic, demonstrating their long-term commitment to the country.
Destination of FDI
Tourism remains the most favored sector for foreign investors, who allocated US$1,003.5 million to tourism development projects in the country through September. Iconic destinations such as Punta Cana and Samaná continue to attract global brands and developers seeking to capitalize on the Dominican Republic’s thriving tourism industry. This sector alone accounts for nearly 30% of total FDI, reinforcing the country’s reputation as a prime destination for leisure and hospitality investments.
The energy sector ranks second, receiving US$792.3 million in investments. This surge is partly due to the government’s push for renewable energy projects aligning with global sustainability trends. Investments in wind, solar, and hydroelectric projects have made the Dominican Republic a leader in renewable energy initiatives in the Caribbean.
Commerce and industry follow closely, with FDI inflows amounting to US$553.3 million. These investments are essential for bolstering local supply chains, enhancing industrial capacity, and creating employment opportunities. The real estate sector, a niche that continues to expand for investment flows, received US$541.1 million, reflecting growing demand for commercial and residential developments in urban and suburban areas.
Free zones attracted FDI worth US$257.4 million. These zones have become vital hubs for export-oriented industries, particularly manufacturing and textiles. Foreign investment flows totaled US$163.7 million in mining from January to September 2024, emphasizing the country’s rich natural resources. The transportation sector reached US$170.6 million, highlighting the importance of infrastructure improvements for trade and mobility. Meanwhile, the financial sector recorded about US$126.3 million, showcasing steady banking and insurance services growth.
Foreign Exchange Inflows
The Dominican economy receives foreign exchange primarily through remittances, foreign direct investment, exports of goods, and other services. In the first half of this year, the Central Bank reported approximately US$21.9 billion in foreign exchange inflows, an increase of US$1.327 billion compared to the same period in 2023. This growth reflects the resilience of the Dominican economy in navigating global economic challenges.
The institution stated that this level of foreign exchange inflows contributes to the relative stability of the exchange rate, projecting that by the end of the year, the country could receive around US$43 billion in foreign exchange earnings. FDI remains a cornerstone of this financial stability, with the United States, Spain, and Mexico continuing to lead as top investors in the Dominican Republic.
In its report on FDI flows, the Central Bank highlighted the energy sector’s significant contribution. Its investment income rose from 7.5% in the first half of 2019 to 25.5% in the first six months of 2024. This growth is attributed to government incentives for renewable energy projects, which have attracted significant international players to the Dominican market.
Progressive Growth
Foreign direct investment has shown an upward trend since 2021, following recovery from the effects of the COVID-19 pandemic. In 2022, foreign capital investments totaled US$4,098.8 million, increasing to US$4,390.2 million in 2023. Central Bank estimates indicate that FDI could surpass US$4.5 billion by the end of this year, further solidifying the country’s position as a regional leader in attracting foreign investment.
FDI flows and remittances remain the Dominican economy’s primary sources of foreign exchange. This underscores the importance of maintaining an attractive investment climate, particularly for the United States, Spain, and Mexico, the top investors in the Dominican Republic. These countries have contributed significant capital and brought expertise and technology that have enhanced the nation’s industrial and service sectors.
As the Dominican Republic continues diversifying its economy, energy, tourism, and commerce sectors will likely remain key targets for future investments. The government’s commitment to infrastructure development and regulatory reforms will be instrumental in sustaining this growth. With a strong foundation and robust investor interest, the Dominican Republic is poised to maintain its status as a top destination for foreign direct investment in the Caribbean and Latin America.