Commercial opportunities in the Dominican Republic

Commercial opportunities in the Dominican Republic
By. Victor Garrido, M.D.

 

 

The country’s capital, Santo Domingo, was founded in 1496, becoming soon after the Base of the first Cathedral, first hospital and University of America.  The Spanish arrived on December 05, 1492 and the native, Tainos, vanished shortly after their arrival as a consequence of new diseases and the inflexible work they were forced to carry on.  We stood as a Spanish colony until 1697 when the western third was transferred to France, and by 1795 the whole island became French.  In 1804 the western part gained its Independence becoming Haití.

 

The Eastern part stayed under French domination until 1808 when it became Spanish once again.  One year after gaining our independence from Spain in 1821, we were occupied by Haití, this domination ended on February 27, 1844.  Only to be annexed to Spain seventeen (17) years later.

 

By the end of the XVIII hundreds a couple of dictatorships oppressed the country until 1916 when the US Army subjugated the nation for eight (08) years, but before long, another dictatorship took power under Rafael Leonidas Trujillo, until the beginning of the 1960’s when in April of 1965 a new US Army occupation took place until general elections were held in 1966.  Since then, nine (09) democratic elections with alternating power of the three (03) main political parties have ruled the nation.  Presently, the long-established political management of the 1960’s are being replaced by a younger generation of leaders who are trying to accomplish an economically project, based in global competition, public sector responsibility, decentralization and social righteousness.

 

New opportunities are currently spading an a rapit rate due to new ideas, laws and incentive the our nation is now investing.  Permit me if you will, to mention some of those possibilities at this time:

 

1. –  Healthy investment conditions, in addition to almost forty (40) years of democratic tradition, our government realizes the crucial role it plays in enabling the country to rise to its potential, in a globalized economy.  We knowledge the importance, of creating the proper conditions to attract foreign direct investment, in addition to recognizing the need to find new mechanisms that minimize the risk to foreign investors.  As a result of this ongoing search, we became part of the Multilateral Investment Guarantee Agency’s Constitutive Treaty in 1996.  Subsequently at this time, we can proudly say that the Dominican Republic is in the number six (06) spot, as a beneficiary country throughout the world.  This agency of the World Bank, grants guarantees to cover companies in exchanging situations from and to foreign currency, avoid the likelihood of expropriation, protect the foreign investors in the occurrence of a non compliance of contract by the government, as well as civil disturbance and war.  Moreover, since 1962 the Dominican Republic is beneficiary of warranties granted by the Overseas Private Investment Corporation for the North American investors, with both insurance and loan programs.  

 

2.-  But let me also add tonight, that we are the Fastest Growing Economy in Latin America.  For most of the last decade my country has experienced, and extended period of robust economic growth.  The International Monetary Fund and the Economic Commission for Latin America and the Caribbean has put us among the world’s fastest growing economies. 

 

Needless to say, this progress has been accomplished by the invaluable support of investors like you.  Companies from the US, Spain, France and others, are helping the Dominican people  to get out of poverty and hopelessness, while beneficiating from their investments in our country.  At the moment, we host the fourth top French companies such as Carrefour, Orange, Club Med, Accor and Vivendi.

 

3.-  The Abundant labor force of  2.3 million people, with a legal weekly minimum wage of 90.00 dollars at technical level, and 43.00 dollars for unskilled employees, are looking to earn a decent living and eagerly waiting to show you why, we consider our people the nations greatest access.

 

4. – Multilateral trade agreements are options that we invite your companies to explore, by means of preferential access to the biggest world markets.  Just to mention a few of these agreements, I’ll start with the Caribbean Basin Initiative, providing duty free import, into the US of most manufactured merchandise and access level for assembled textiles products.  The Dominican Republic also enjoys duty free entrance to the US market, under the Generalize System of Preferences.  Furthermore, the Lomé agreement, now called Cotonou, opens the door to the European market.  In addition, free trade agreements exist with the Caribbean and Central American Common market, besides being part of the San José agreement, where the country, receives preferential rates in oil supply from Venezuela and México.  All these agreements, provide substantial advantages in terms of world admission to an increasingly competitive market.

 

5. – Broad Investment opportunities are abundant, by way of natural resources and infrastructure diversity allow broad investment choices.

  • Tourism, is one of the most vibrant businesses of the native economy, over 51,000 rooms enjoying a premier room occupancy rate in the Caribbean.  Seven international airports, receive over three millions visitors per year, that can choose from 500 km of white sandy beaches, to thirty one national park, four scientific park, two historic parks and two designated ecosystems areas to spend their vacation.  There are no restrictions in building, owning or operating hotels by foreign firms, plus your profits can be 100% repatriated.
  • Industrial Free Zones:  These are designated areas, where companies operate under customs and fiscal incentives, which include duty free importation of equipment, raw materials and components for assembling products, or providing services.  They also, grant the companies freedom to repatriate profits, and options to sell 20% of their production in the local market.  This sector, has continued a steady and dynamic growth over the last fifteen years.
  • Telecommunications:  In fact the Dominican Republic has one of the most advanced telecommunications systems in the world, with highly developed networks, that included country wide microwave relay network, one coaxial submarine cable and one Atlantic Ocean intestate earth station.  International communications services, are providing via state of the art digital switching fiber optic cables and satellite capabilities.  There are over 1.5 million lines of which 60% are digital.  The wireless environment includes 300,000 plus cellular lines with total geographic coverage.  Currently four major telephone companies provide their expertise and qualify services.
  • The Dominican Republic is also an excellent location for agricultural business.  The demand for juices and canned goods in the European and US markets, make the fertile soil of the nation an ideal setting for growing fresh products.  Traditional agricultural products included coffee, sugar cane; tobacco and cocoa continue to show sustained growth in the company of an emerging local market and the mounting tourist population that creates an outstanding venture occasion for domestic consumption.  Proximity to the US, provides flexibility of operations and gives investors an advantage over the competition in the industry.  Workers in the traditional agro industry are highly experienced and Sea/Air transportation is widely available.  This industry, is also exempted from local income taxes and agriculture equipment is duty free.

 

6. – Strategic location.  Just being a few hours away from the States, Europe, Latin America and Africa, will give your company the capability to produce abroad with 100% exemption on import duties for machinery, equipment, spare parts, construction materials and any input require for the production process, also 100% exemption on income tax for twenty years, freedom to repatriate tax free profits, free foreign currency exchange, profitable trades agreements and competitive minimum wage.

 

Finally, let me draw your attention to the disposition of International Organization such as the World Bank and the Inter American Development Bank, they grant credit facilities, under good conditions for the fulfilment of projects in sectors considered to be important, for the development of the national economy, like agriculture and tourism.  Furthermore, there are sources of financing on hand through the European Investment Bank which grants loans for long term and low interest rates in sectors such as industry, tourism, mining, transport, telecommunications and energy, major issues at the present time, all this under the Cotonou agreement.  Moreover, the Overseas Private Investment Corporation, a government agency of the US, is also active in the Dominican Republic with financing facilities.

 

As you can see, ample opportunities for profitable investment exist in the Dominican Republic.  On behalf of my country, I encourage you to join us in our efforts to provide a better to provide a better quality of life for our people, while simultaneously making profitable business for yourself.  If you require locating projects or strategic alliances or making contacts to identify sub-contractual assembly arrangements, find financial resources and cost effective project financing, generate technology transfer to small, medium or big business, please don’t hesitate to contact the Dominican Republic Consulate in Pittsburgh.  Thank you very much for your interest, we look forward to working with you.

 

Discurso pronunciado en el club Oxford

Pittsburgh, PA. USA.  2002.

 

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