LOW TAX COUNTRIES
Andorra
Anguilla
Antigua & Barbuda
Aruba
Australia
Bahamas
Barbados
Belize
Bermuda
British Virgin Islands
Cayman Islands
Cook Islands
Costa Rica
Cyprus
Dominica
Dominican Republic
Gibraltar
Hong Kong
Isle of Man
Jersey & Guernsey
Liechtenstein
Luxembourg
Malta
Mauritius
Panama
Singapore
St.kitts & Nevis
Switzerland
Turks & Caicos
Vanuatu
Index of Articles
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THE DOMINICAN REPUBLIC
About The Dominican Republic
The Dominican Republic, is a country located on the eastern two-thirds of the Caribbean island of Hispaniola, bordering Haiti. Hispaniola is the second-largest of the Greater Antilles islands, and lies west of Puerto Rico and east of Cuba and Jamaica. A legacy of unsettled, mostly non-representative rule lasted for much of the 20th century; the move towards representative democracy has improved vastly since the death of military dictator Rafael Leónidas Trujillo in 1961. Dominicans sometimes refer to their country as Quisqueya, a name for Hispaniola used by indigenous Taíno people. The Dominican Republic is not to be confused with Dominica, another Caribbean country
Explored and claimed by Christopher COLUMBUS on his first voyage in 1492, the island of Hispaniola became a springboard for Spanish conquest of the Caribbean and the American mainland. In 1697, Spain recognized French dominion over the western third of the island, which in 1804 became Haiti. The remainder of the island, by then known as Santo Domingo, sought to gain its own independence in 1821, but was conquered and ruled by the Haitians for 22 years; it finally attained independence as The Dominican Republic in 1844
| Dominican Republic |
|
| Capital |
Santo Domingo
18°30′N 69°59′W |
| Official languages |
Spanish |
| Area |
48,442 km² (130th)
18,810 sq mi |
| Population
|
8,895,000 (87th) |
| GDP (PPP)
|
$67.410 billion (68th) |
| per capita
|
$7,611 (85th) |
| Currency |
Peso (DOP) |
| Time zone |
(UTC-4) |
| Dialling code |
+1-809 and +1-829 |
THE ECONOMY OF THE DOMINICAN REPUBLIC
The Dominican Republic is a Caribbean representative democracy that enjoyed strong GDP growth until 2003. Although the country has long been viewed primarily as an exporter of sugar, coffee, and tobacco, in recent years the service sector has overtaken agriculture as the economy's largest employer due to growth in tourism and free trade zones. Growth turned negative in 2003 with reduced tourism, a major bank fraud, and limited growth in the US economy (the source of about 80% of export revenues), but recovered in 2004 and 2005.
With the help of strict fiscal targets agreed in the 2004 renegotiation of an IMF standby loan, President FERNANDEZ has stabilized the country's financial situation. Although the economy continues to grow at a respectable rate, unemployment remains an important challenge. The country suffers from marked income inequality; the poorest half of the population receives less than one-fifth of GNP, while the richest 10% enjoys nearly 40% of national income. The Dominican Republic's development prospects improved with the ratification of the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) in September 2005
The Dominican Republic is a middle-income developing country primarily dependent on agriculture, trade, and services, especially tourism. Although the service sector has recently overtaken agriculture as the leading employer of Dominicans (due principally to growth in tourism and Free Trade Zones), agriculture remains the most important sector in terms of domestic consumption and is in second place (behind mining) in terms of export earnings. Tourism accounts for more than $3 billion in annual earnings. Free Trade Zone earnings and tourism are the fastest-growing export sectors. Remittances (remesas) from Dominicans living abroad are estimated to be about $3 billion per year.
Following economic turmoil in the late 1980s and 1990, during which the GDP fell by up to 5% and consumer price inflation reached an unprecedented 100%, The Dominican Republic entered a period of moderate growth and declining inflation until 2002 after which the economy entered a recession, after the second commercial bank of the country (Baninter) collapsed, caused by a major fraud of 3.5 billion of dollars during the administration of President Hipolito Mejia (2000-2004). The Baninter fraud had a devastating effect on the Dominican economy, with GDP dropped by 1% in 2003 while inflation ballooned by over 27%. With the election of former president Leonel Fernández in 2004 and implementation of economic reforms, the economy has re-stabilized and strong GDP growth has resumed.
STARTING A BUSINESS IN THE DOMINICAN REPUBLIC
The Dominican Republic Free Zone was created to attract foreign investment. It offers a number of major incentives through tax, tariff and cost savings to those starting a
business or setting up new operations or facilities in the Dominican Republic.
Typically a Free Zone would attract businesses involved in light manufacturing or assembly of 'hard goods'. It is also more frequently becoming the case that service operations such as call-centres and other administrative activities are
recognising the considerable tax benefits offered by the Dominican Republic Free Zone.
One of the World's Top Five!
The Dominican Republic Free Zone offers particular advantages to those starting a business compared with other similar Zones. In fact it has been identified as being one of the world's top five current Free Zone opportunities.
This accolade has been awarded not only because the Dominican Republic is geographically close to the USA, but also because it has trade agreements with both the US and the European Union. This means, for instance, that on goods exported to European markets duties are reduced or even zero.
A summary of advantages offered by Free Zones:
- Easy access to transport and shipping
- Low labour and production costs
- Less red-tape and bureaucracy
- Reduced/Zero Tariffs or Duties on Imports and Exports
- Reduced/Zero taxes on profits
In the case of the Dominican Republic Free Zone some of the particular benefits for anyone starting a business include exemption from:
- Municipal Taxes and Export Duties
- Incorporation and Capital Gains Taxes
- Property, construction and mortgage title transfer taxes
- Business and Value Added Taxes
- Corporate Income Taxes
This exemption operates from the day that production/operation commences and applies for a 15 year, renewable, period!
If the business need to import:
- Any vehicles, including trucks, vans, buses (for transporting workers)
- Production Equipment and materials required for production
- Equipment or materials required for providing facilities for workers (such
as catering, medical care, crèche/child care)
Import duties on all these items are also waived for operations established in the
Dominican Republic Free Zone.
Even More Reasons to Start a Business in the D.R.!
It is also the case that the day-to-day running costs of an operation within the Free Zone will be much more economical than in many a company's 'home country'. If you are interested in setting up a Free Zone operation you will find leasehold costs, for example, (especially within Government owned
compounds) are very reasonable. Utility and power charges and other running costs are also economical.
Another attractive aspect for many people considering starting a business operation within the
Dominican Republic Free Zone are the relatively low labour costs. Even though there are minimum wage levels for Free Zone workers that have been established by the Government they are still well below those in the more developed countries of the western world.
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