Exporting to Dominican Republic

The Dominican Republic has one of the largest and fastest growing economies in the Caribbean and Central American regions. Tourism, free trade zones and improved telecommunications are the main drivers of its growth.

Strong, stable economy

The Domincan Republic is the largest market in the Caribbean and Central America with a GDP of $81 billion in 2018 (World Bank, 2019). It has an open economy with a strong appetite for imported goods and technology. The currency and the political and economic environments are stable.

Foreign direct investment

The Dominican Republic is a regional leader in attracting foreign direct investment (FDI), with inward FDI stock totalling $36.5 billion US dollars in 2017 (ONS, 2018). Historically, the UK is a significant investor in the Dominican Republic. UK direct investment amounted to £93 million in 2017 (ONS, 2018).

Ease of doing business

102nd

out of 190 countries (World Bank, 2019)

Currency

Dominican peso

Business language

Spanish

You may need a translator

GDP per capita

$7,880

UK is $42,558 (IMF, 2018)

Economic growth

7.0%

(IMF, 2018)

Time zone

GMT -4

Opportunities for exporters

There are opportunities for UK companies across a broad range of industries. Our trade advisers in the Dominican Republic have identified particular opportunities for UK businesses in the following sectors.

Doing business in the Dominican Republic

Preparing to export

You’re advised to seek good legal advice from an English-speaking lawyer before exporting to the Dominican Republic.

Taxation

Taxes are collected by the General Directorate of Internal Revenue. Tax rates and mandatory contributions are the same for both Dominican and foreign investors. If you’re an employer, you must pay social security for your employees.

VAT

If you’re registered for VAT, it may be possible to zero-rate the goods you export to the Dominican Republic, provided certain conditions are met.

VAT (known as ITBIS) is charged at 18%. Goods and services which are exempt from ITBIS include basic foods, medicines, fuel and books.

Regulations

The Dominican Quality Institute (INDOCAL) (website in Spanish) enforces mandatory product safety and information standards and bans on unsafe goods.

Selective consumption taxes (ISC)

ISC (impuesto selectivo al consumo) is applied on the purchase price or import of certain goods including alcohol and cigarettes. The rate of ISC tax varies according to the item being taxed.

Free trade zones

Free zone operators and companies located in industrial parks enjoy 100% exemption from various taxes. There are currently 53 industrial parks, housing over 500 companies.

Operating in the Dominican Republic

Intellectual property

The National Industrial Property Office (ONAPI, website in Spanish) is in charge of granting patents and registering industrial property. Civil and criminal sanctions may be applied in case of an infraction of industrial property rights.

There is currently a problem in the Dominican Republic with counterfeit products, especially alcohol, tobacco and pharmaceuticals. The Attorney General’s Department is taking action but it’s proving difficult to reduce the scale of the problem.

Payment terms

The most common methods of payment are:

  • cash (as most Dominican companies have dollar accounts abroad) by electronic or wire transfers
  • supplier credit, once you’ve established a trading relationship
  • documentary letters of credit including stand-by letters of credit
  • documentary collections through the banking system
  • commercial credit cards (accept these with caution because of the possibility of fraud)

Using agents and distributors

To export successfully to the Dominican Republic, you’ll probably need to employ an agent or distributor. In some cases where health certification is required, a local agent is a legal requirement.

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.