Download - Dominican Republic Investment Guide
Dominican Republic: a fully developing country that offers opportunities for investment, tax incentives, peace, beauty, and much more – and where you will receive a warm welcome!
TOURISM INVESTMENT
GUIDE
Ministerio de Turismo
2 3
Isla Saona
Isla Beata
Atlantic Ocean
Hato Mayor
Higüey
Barahona
Bonao
Puerto Plata
Santiago
Montecristi
Nagua
Jarabacoa
Constanza
BocaChica
Punta Cana
Miches
Bahía deSamaná Cayo
Levantado
Río SanJuan
CabareteSosúa
Luperón
Parque NacionalIsla Cabritos
Oviedo
Laguna de Oviedo
Cabo Rojo
Parque NacionalSierra de Bahoruco
Jaragua
J. ArmandoBermúdez
José del Carmen Ramírez
Los Haitises
Bahía deManzanillo
Pico Duarte
San Pedro De Macorís
Monte Plata
Salto El Limón
Cabo Francés
Viejo
Damajagua
Cayo Arena (Paraíso)
Estero Hondo
La Vega
Laguna Rincón de Cabral
Loma QuitaEspuela
El Choco
Samaná
Laguna Limón
Lagunas Redonda y Limón
Hoyo dePelempito
Polo Magnético
El Seibo
Cabo CabrónCabo Samaná
CuevaFun Fun
María Montez (BRX)
Punta Cana (PUJ)La Romana
Casa de Campo(LRM)
La Isabela (JBQ)
Arroyo Barril
Laguna Redonda
Pedernales
SANTO DOMINGOLa Romana
Reserva CientíficaÉbano Verde
Cibao (STI)
JuanDolio
GregorioLuperón(POP)
Cueva LasMaravillas
IslaCatalina
Altos deChavón
El Catey (AZS)
Las TerrenasEl Portillo
Las Américas(SDQ)
La Caleta
Bocade Yuma
Dunasde Baní
Haiti
Lago EnriquilloIsla Cabritos
Caribbean Sea
Parque Nacionaldel Este
Azua
BANÍ
San Cristóbal
Cabrera
San Joséde las Matas
Dominican Republic
San FranciscoDe Macorís
City and Town
Point of Interest
Cruise Port
International Airport
Domestic Airport
Beach
Protected Area/Park
Golf Course
Whales
Highest Peak
KEY
Playa Grande
CayosSiete
Hermanos
Atlantic Ocean
Caribbean Sea
Gulf of Mexico
United States
Mexico
Cuba
Jamaica
Haiti
DOMINICAN REPUBLIC
PuertoRico
Atlantic Ocean
Caribbean Sea
Gulf of Mexico
United States
Mexico
Cuba
Jamaica
Haiti
DOMINICAN REPUBLIC
PuertoRico
© 2012 PRO RD S.A. • Email: [email protected] • Tel. 809.769.9560
Investment GuIde, contents:
Letter from the minister of tourism.................................................................. 4An Island with a History ............................................................................... 5A country equipped for tourism: •InternationalAirports ............................................................................. 6 •DominicanRepublic,theGolfMeccaoftheCaribbean ............................. 7 •CruisesintheDominicanRepublic .......................................................... 8 •SportsMarinas ..................................................................................... 8 –ArrivalProcess ................................................................................. 9 – existing marinas .............................................................................. 9 – Fishing .......................................................................................... 10A country that “Has It All” ........................................................................ 11International tourism Promotion: ................................................................. 12DominicanTourismbytheNumbers: ............................................................ 13 •Tourismincome .................................................................................. 13 •Hotels ................................................................................................ 13 •Historyofhoteloccupancy ................................................................... 13opportunities for Investment in tourism ........................................................ 17RealEstateTourismintheDominicanRepublic .............................................. 18ReasonsforInvestingintheDominicanRepublic ........................................... 19IncentivestheCountryandTourismOfferInvestors: ...................................... 20ForeignInvestmentAct ............................................................................... 21BenefitsforPensionersandAnnuitantswithaForeignSourceofFundsAct ....... 21AcquiringRealEstateintheDominicanRepublic ........................................... 22MortgageRegulatorySystem ...................................................................... 23MinistryofTourismannouncesOneStopWindow,tomakeinvestingeasier ..... 23Contact ................................................................................................... 24
4 5
LETTERFROMTHEMINISTEROFTOuRISM:
DearReader,
TheDominicanRepublicoffersattractiveconditionstothosewhoinvesthere:amongthese are legal security, a solid democracy, high investment profitability, and afavorablebusinessclimate.
TheDominicangovernmenthasplacedahighpriorityondevelopingtourisminthecountryoverthelastfortyyearsandpromotedpoliciesthatincentivizeinvestment.
ThemanyinvestmentincentivesincludetheForeignInvestmentLaw,whichgivesequalrightstoforeignersandDominicans;alawthatgrantstaxexemptionstopensionersandannuitantswhochoosetoresideinthecountry;additionally,specializedLaw158-01 offers generous tax advantages to new tourism projects and allows forrenovationandre-fittingofprojectsthatwereconstructed5ormoreyears,therebyguaranteeingcompetitiveness,sustainability,andreturnoninvestment.
The combination of its natural beauty and scenery, excellent climate, and thefriendlynatureofDominicans,inadditiontothehighincreasesinthevalueoftouristproperties,makethisthecountryofchoiceforinvestingandearninggoodprofits,or simply for safeguarding family savingswhileenjoyingownershipofa secondresidence.
WehopethatthisInvestmentGuidewillbealandmarkonthepathwaytakenbyinvestors.
WeinviteyoutovisittheMinistryofTourism,wherewearealwaysatyourservicetowelcomeyou,orientyou,andassistyouintheprocessofsuccessfullydevelopingyourprojectsinthiscountry.
Sincerelyyours,
FranciscoJavierGarcía DominicanRepublicMinisterofTourism
ANISLANDWITHAHISTORyOn December 5, 1492, Christopher Columbus discovered theisland that he later named Hispaniola. the indigenous people called it Quisqueya, which, in their language, means “MotherofAllLands.”TheDominicanRepublicoccupiestheterritorythathostedthefirstpermanentEuropeansettlementinAmerica;amongother“firsts”intheAmericas,itwashometothefirstuniversity,thefirstcathedral,andthefirstroyalcourt.
The Dominican Republic is located centrally in the CaribbeanSea, at the convergence of all the routes of theAmericas andtheworld; thismakes it a geographically advantaged locationfortradeandtourism.HispaniolaisthesecondlargestislandintheGreaterAntilles, and it is part ofCentralAmerica and theCaribbeanregion.
The Dominican Republic is a fertile country, with almost 80%coveredbymountain ranges that run from theNortheast to theSouthwest. Pico Duarte (3,175 m) is the highest point in theAntilles.TheCibaovalley,oneofthemostfertileandbestwateredregionsinthecountry,islocatedbetweentheCordilleraCentral[Central Range] and the Cordillera Septentrional [NorthernRange],arangethatrunsparallel tothenorth.Thecountryhasseveral watercourses, the yaque del Norte, [Northern yaque],yuna,andCamúinthenorth;theyaquedelSur[Southernyaque],Ozama,andSocointhesouth;andalargesaltwaterlake,theenriquillo, in the southwest.
Itenjoysatropicalclimate,moderatedbyprevailingeastwinds.Temperaturesofover23°Carerecordedintheplainsthroughoutthe year, except during the summer, when temperatures rangebetween27°Cand35°C.Inthemountainousregions,temperaturesarecooler,andinsomeplaces,cold.
TheDominicanRepublicreceivesmillionsofvisitorsannuallyfromforeignersandDominicansresidingabroad;itisoneofthemaintouristdestinationsinthewholeoftheAmericas.
6 7
INTERNATIONALAIRPORTS
Thecountryhasatotalofeightinternationalairports,sixofwhicharemanagedby“AeropuertosDominicanosSigloXXI” [Century21DominicanAirports] (AERODOM),acompanyoperatingunderaconcessionfromtheDominicanStateforaperiodofthirtyyears.Theremainingthreeairportsbelongtotheprivatetourismsector. •LasAmericasInternationalAirport,SantoDomingo •LaIsabelaInternationalAirport,Higuero •LaRomanaInternationalAirport •PuntaCanaInternationalAirport •ElCateyInternationalAirport,Samaná •GregorioLuperónInternationalAirport,PuertoPlata •SantiagoInternationalAirport •MaríaMontezInternationalAirport,Baharona
Therearealsothreerenovatedairportsforimproveddomesticflights.Theseare:
• Contanza Airport, also known as “Aeropuerto Nacional Expedición 14 de Junio” [June14ExpeditionNationalAirport] •OsvaldoVirgilMonteCristiAirport •PedernalesAirport,CaboRojo
THEDOMINICANREPuBLICISTHEGOLFMECCAOFTHECARIBBEAN
Golfattractsthekindoftouristwhohashighpurchasingpower,andwho, it is estimated, spends four times more a day than the average tourist,therebyincreasingtheprofitabilityoftouristactivity.Butgolftourismoffersadvantages thatarenotmerelyfinancial; it isalsolessseasonal,andallowsfordiversifiedproductsandmarkets.
Infact,golfersstandoutfortheirhigheraveragedailyspending,morethanhalfofwhichisusedforactivitiesnotrelatedtothesport.
Thecountry’sclimateadvantagemakesitpossibleforthissporttobeplayedatanytimeoftheyear;italsooffersmountainousconditionsandidealvegetationfordesignersofthesefacilities—amongwhomtheresonantnamesofPeteandPBDye,JackNicklaus,NickPriceandNickFaldo,amongothers,standout—totesttheirexperienceandimaginationbytakingadvantageofthenaturalterrain.They
havebeenabletousetheseelementstoproduceresultsthat,fromatechnical,sporting,andlandscapestandpoint,areasoriginalasthey are surprising.
Therapidexpansionofrealestatetourismpromotesthisactivity,anditisthefundamentalbasisofthestrategyplannedandimplementedbytheDominicanauthoritiesforsustainabletourism;at this time,thereare23golfcoursesinthiscountrythatarelinkedtosometypeof hotel and/or real estate tourism.
It should be pointed out that one of the golf courses beingremodeled, the Playa Grande Golf Course in Río San Juan, isamongthefavoritesofgolfloversandconsideredoneofthebestin the world.
Wecansayunequivocallythatgolfischangingthefaceoftourismin thiscountryand isbecoming thepowerbehindsecondhometourism.
A c
ount
ry e
quip
ped
for t
ouris
m
8 9
CRuISESINTHEDOMINICANREPuBLIC
TheDominican Republic is strategically located on cruise shiproutesandhasfourfunctioningcruiseports:SantoDomingo(DonDiego), Sans Souci, La Romana, and docking facilities at IslaCatalinaandSamaná.
TheCaribbean, thenumberoneoption for cruisedestinations,currentlyrepresents38.19%ofdestinationsselectedworldwide.
The average daily spending by passengers at ports of call is$98.10. crews spend approximately $74.56
According toarecentstudybyBusinessResearch&EconomicAdvisors(BREA),onelayoverbya2000-passengershipwithacrewof800contributes$190,476.00tothecityinpassengerspending.
Ifweaddservicesandporttaxestothisfigure,eachshiparrivingatoneofourportscontributesaround$260,000.00.
SPORTSMARINAS
TheDominicanRepublichasoneofthemostextensivecoastlinesin the Caribbean, with over 1,200 kilometers of diverseecologicalenvironments,rangingfromdesertstotropicaljungles.Regardlessofwherevisitorsdecidetodropanchor,theyaresureto encounter beautiful mountain views, turquoise waters, andwhite sands.
In the next two years, theDominicanRepublicwill double thenumberoffullservicemarinas,somewithfacilitiesneverbeforeavailableintheCaribbean.Thesenewstructuresaremuchmorethanplacestodockaboat,sinceseveralofthenewmarinasareopening inplaces in the country that neverbefore couldofferservicestolargevessels.
Currently, theDominicanRepublicisabletodockboatswithalengthofupto250feet.Infact,CapCanaHarborandMarinaisthelargestintheCaribbean,withthecapacitytodockmega-yachtsupto500feetlong.
ARRIVALPROCESSWhenarrivinginport,vesselsshouldpresentDominicanauthoritieswithalltherequirementsforinspection,namely: •Boatregistration •Documentationofdeparturefromportoforigin •Listofpassengersandtheirpassportnumbers •Immigrationfeeof$60peryacht •Everypassengermustpurchasea$10touristcard
Thesefeesareacceptedonlyinu.S.dollars,andshouldbepaidtotheportauthoritiesatthemarina.Tofacilitatetheimmigrationprocess, passengers and crew may not disembark until theinspectionhasbeencompleted.
For those who are planning to travel by boat to DominicanRepublic,herearethemarinasthatareopenorplannedtoopenshortly, allowing greater access to the northern, eastern andsoutherncoasts.
MARINAS
BARTOLOMéCOLONMARINAMarinalocatedinthePortofSantoDomingo.OperatedprivatelybythePortofSantoDomingo.
CAPCANAMARINALocated ten minutes away from the Punta Cana InternationalAirportanddesignedtobethemostcompleteandmodernintheCaribbean. Theonly full servicemarinawithina400kilometresradiusbetweentheTurksandCaicosIslandsandPuertoRico,theMarinahaveacapacityfor1,000boatsofvaryingsizes,includingmegayachtsupto250feetinlength.Surroundedbyworldclassrestaurants and luxury boutiques, it will include seven islandsdestinedforresidencesofthehighestlevel.www.capcana.com
CASADECAMPOMARINALaRomanaisaverypopularresortamongtherichandfamous.Casa de Campo Marina provides complete services to 350yachtsofupto250feetlong.Italsohasninestoresandapianobar that were constructed along the marina’s boulevard. In
addition,theyachtclubhasaddedasailingschoolwithinstructorsfrom the renowned Italian yacht club, the Costa Esmeralda. www.MarinaCasadeCampo.com
cLub náutIco de sAnto domInGoTheClubNáuticodeSantoDomingo[SantoDomingoyachtClub]operates threemarinas in the country:BocaChica,SanCristóbaland monte cristi. the marina also hosts several fishing tournaments andregattasthroughouttheyear.www.clubnautico.com.do
PuERTOBLANCOMARINA LocatedwestofPuertoPlatainLuperón,PuertoBlancoisacompletelyenclosedmarinawiththeabilitytomoorupto200yachtswitheight-footdrafts.ThemarinaislocallyownedandknownforitsnightsofDominicanfoodandfunforthosewhoseyachtsareanchoredthere.The Luperónarea is known tobe secure forboats in theeventofhurricanesandtropicalstorms.
OCEANWORLDADVENTuREPARk&MARINAAlsothewestofPuertoPlata,OceanWorldAdventureParkrecentlyaddedamarinatoitsfamedwaterpark.Severalinteractiveprograms,includingencounterswithdolphins,stingraysandsharks,makethisoneofthemostuniquemarinasintheworld.Thisfull-servicemarinahas83slipsforyachtsupto250feetlong,besidesaheliport,diveshop,casinoandotherattractions.www.OceanWorldMarina.com
10 11
ACOuNTRyTHATHASITALL
Not only does the Dominican Republic haveexceptionalregionswithunequaledtourismpotential,but it also offers investors a legal framework thatis well-suited for carrying out their projects. Thefantasticcombinationofdiversenaturalenvironmentswill inspire your imagination and refresh your spirit.
Tallmountains,exuberantjungles,pinewoods,coralreefs, immaculate beaches, and arid deserts allcoexistinthismagicalland.Thismagnificentnaturalworldisthesettingforluxuriousvillages,welcomingcities,andfirstclasslodgingsforvisitors.
PuNTACANARESORTCLuBMARINAPuNTACANA RESORT & CLuB has a full-service marina.Featuringtwodocksandspacefor43seventy-footyachts.Thismarinaisafavoriteofwell-knownfishermenandapopularspotin Dominican Republic for holding billfish tournaments. www.PuntaCana.com
PuERTOBAHIAMARINAPuertoBahiaMarinaiseverysailor’sdream,whereyoucansailtoamazingadventuresandliveyourpassionforthesea.Withacapacityfor107yachtsupto150feet long,itoffersall theservicesandamenitiesofaworld-classmarina,complementedbythefriendlinessofourtrainedstaff.www.puertobahiasamana.com/es/es/marina
LuPERóNNot far fromwhereChristopherColumbus tied up for the firsttime, thenewLuperónfull-servicemarinaisunderconstruction.Itwillhavespacefor250yachtsbetween30and80feetlong,and7yachtsupto100feetlong.TheBahíadeLuperón[LuperónBay], located a short distance from Puerto Plata, is a naturepreservethathasshelteredmanyvesselsduringtropicalstorms.www.MarinaTropical.com
ROCOkIMARINA JustnorthofPuntaCana,anothermarinaisunderdevelopment.Although the details on the number of slips and the length ofyachts it canacceptarenotyetavailable, theWestinRocoki
Beach&Golf Resortwill house amarina as part of itswatersportscenter.Inadditiontocompletemarinaservices,thecenterwillalsohaveaboogieboardlagoon,excursions,sailingclasses,fishingboatsandmuchmore.www.Rocoki.com
MARITIMEPORTOFSANTODOMINGOAspartoftheMaritimePortofSantoDomingoRevitalizationandExpansionProject,amarinawithacapacityfor500vesselsofupto140feetlongwillbebuilt.ThemarinawillbelocatedbetweenSanto Domingo’s Obelisk and the monument to Montesinos.www.SanSouci.com.do
FIsHInGDominican Republic is home to several international billfishtournamentseveryyear,includingthe“BillfishXtremeTournament,”sponsoredbytheu.S.televisionchannelESPNatthePuntaCanaResort & Club. Many world records for billfishing have beenbrokeninthewaterssurroundingthecountry.TheworldrecordforanAtlanticbluemarlinwassetoffthecoastofLaRomanawithacatchweighing385kg.
Despitethis,mostfishingenthusiastswhocometotheDominicanRepublicfortheirvacationsdonotrealizethecountryisoneofthebesthideoutsofdozensofcovetedfishspecies.Forthosewhodonotwanttobreakrecords,butwouldliketobattleabillfishorlandabarracuda,fishingexcursionsareofferedthroughoutthecountry.
12 13
INTERNATIONALTOuRISMPROMOTION
the ministry of tourism invests over 45 million dollars yearly inpromotingthisdestinationinternationallyintheprincipaltourism-originatingmarketsandotheremergingmarkets.
International promotion campaigns are often created bymeans of a strategic alliance with airlines and/or touroperatorsfromsuchcountries,usuallyonamatching50-50basis,therebydoublingthevalueofthecountry’sinvestment.This active promotional campaign is a decisive factor inkeepingthegrowingnumberoftouristsflowingtowardthecountry.
In order to assist both tourists and investors, theMinistryof Tourism has twenty-two Tourism Promotion Officesworldwide,locatedinprincipalcitiesinmajormarkets.
DOMINICANTOuRISMByTHENuMBERS
INCOMEFROMTOuRISMSince 1980,which is the first year that theCentral Bank reportedtourism statistics, revenues received by Dominican Republic fromtourismhave increasedgreatly, frombarely$172.6million toover$4.3 billion in 2011, which is the last complete year for whichstatistics are available. This averages out to a 5.1 percent annualgrowthratefortheperiodbetween2000and2011.
HoteLThecountrycurrentlyhasmorethan500touristhotels,whichcombinedhavemorethan67,000midtohighqualityhotelrooms;makingthecountrytheCaribbeanleaderinlodgingcapacity.
Thegrowthratefornewleisuretouristroomshasaveraged3.2percentannuallyover theperiodbetween1980and2011,arate thathasbeenlevelingoffasthetourismproductmatures.
HISTORyOFHOTELOCCuPANCyAt this timewecanshowoccupancy ratesofover69.8percent in2011, higher that what we had, for example, in 2001, when we had scarcely54,030touristrooms.
Weshouldnotethat,evenastheoccupancyratehasbeenincreasingalongwiththenumberofnewlyconstructedroomsandhotels,thereisnocontradictionhere,sincethenumberoftouristschoosingusastheirvacationdestinationhasbeengrowingatasimilarpace.Inaddition,itisnecessarytotakeintoaccounttherobustgrowthoftherealestatetourismsector,whichisalsoatypeoflodging,insecondhomes.
14 15
Income from Tourism, in Millions of US Dollars
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2,500
3,000
3,500
4,000
4,500
Non-resident Arrivals by Air
2,700,000
2,900,000
3,100,000
3,300,000
3,500,000
3,700,000
3,900,000
4,100,000
4,300,000
4,500,000
Employed in Hotels, Bars, and Restaurants
150,000
170,000
190,000
210,000
Hotel Occupancy Rate
62.0
64.0
66.0
68.0
70.0
72.0
74.0
76.0
Total Tourist Rooms
50,000
55,000
60,000
65,000
70,000
Gross Domestic Product (in Millions of Dominican Pesos, from 1991)
200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0
Income from Tourism, in Millions of US Dollars
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2,500
3,000
3,500
4,000
4,500
Non-resident Arrivals by Air
2,700,000
2,900,000
3,100,000
3,300,000
3,500,000
3,700,000
3,900,000
4,100,000
4,300,000
4,500,000
Employed in Hotels, Bars, and Restaurants
150,000
170,000
190,000
210,000
Hotel Occupancy Rate
62.0
64.0
66.0
68.0
70.0
72.0
74.0
76.0
Total Tourist Rooms
50,000
55,000
60,000
65,000
70,000
Gross Domestic Product (in Millions of Dominican Pesos, from 1991)
200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0
Income from Tourism, in Millions of US Dollars
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2,500
3,000
3,500
4,000
4,500
Non-resident Arrivals by Air
2,700,000
2,900,000
3,100,000
3,300,000
3,500,000
3,700,000
3,900,000
4,100,000
4,300,000
4,500,000
Employed in Hotels, Bars, and Restaurants
150,000
170,000
190,000
210,000
Hotel Occupancy Rate
62.0
64.0
66.0
68.0
70.0
72.0
74.0
76.0
Total Tourist Rooms
50,000
55,000
60,000
65,000
70,000
Gross Domestic Product (in Millions of Dominican Pesos, from 1991)
200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0
Income from Tourism, in Millions of US Dollars
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2,500
3,000
3,500
4,000
4,500
Non-resident Arrivals by Air
2,700,000
2,900,000
3,100,000
3,300,000
3,500,000
3,700,000
3,900,000
4,100,000
4,300,000
4,500,000
Employed in Hotels, Bars, and Restaurants
150,000
170,000
190,000
210,000
Hotel Occupancy Rate
62.0
64.0
66.0
68.0
70.0
72.0
74.0
76.0
Total Tourist Rooms
50,000
55,000
60,000
65,000
70,000
Gross Domestic Product (in Millions of Dominican Pesos, from 1991)
200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0
16 17
OPPORTuNITIESFORINVESTMENTINTOuRISM
Becauseofthesustainedprofitabilityofhotelsinourcountry,accommodationofferingsoutpacedthecapacitytogeneratenewcomplementaryofferings;thiscreatedanareaofinvestmentopportunityinthissector,inadditiontothecontinuingopportunitiesinlodging.Itshouldbenotedthattherecentlyconstructedhotelsaretop-endresorts,andthisimprovesthequalityoftheproduct.
There is no doubt that the country’s extensive hotelofferingsrequirecreationofcomplementaryfacilitiesthatoffer touristsawidevarietyofalternatives forvacationenjoyment.
Investment in this category of tourism product is anopportunity for investors, and the state grants them majortaxexemptionssotheycandeveloptheirtourismprojects.Infact,alargemeasureofthesuccessincreatingcomplementarytourismofferings,suchasthemorethantwentygolfcourses,thesportsmarinas,restaurants,andtheme parks, among others, were created within theframeworkofanexceptional systemof taxexemptionssetforthinLaw158-01,whichwewilldiscussinmoredetailbelow.
Today,therearebusinessnichesinthenewcomplementaryofferingssectorthatoftenrequirelowerinvestmentandoffer a higher rate of return than tourist hotels.
TheDominicanRepublicMinistryofTourismthroughitsdepartment for Investment Promotion and development, isalwaysavailabletothosewhowanttosoundoutnewpossibilitiesandopportunitiesforinvestinginourcountry;andwillsupportthemthroughouttheprocessofmakingasustainable,profitableandrewardinginvestment.
Income from Tourism, in Millions of US Dollars
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2,500
3,000
3,500
4,000
4,500
Non-resident Arrivals by Air
2,700,000
2,900,000
3,100,000
3,300,000
3,500,000
3,700,000
3,900,000
4,100,000
4,300,000
4,500,000
Employed in Hotels, Bars, and Restaurants
150,000
170,000
190,000
210,000
Hotel Occupancy Rate
62.0
64.0
66.0
68.0
70.0
72.0
74.0
76.0
Total Tourist Rooms
50,000
55,000
60,000
65,000
70,000
Gross Domestic Product (in Millions of Dominican Pesos, from 1991)
200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0
Income from Tourism, in Millions of US Dollars
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2,500
3,000
3,500
4,000
4,500
Non-resident Arrivals by Air
2,700,000
2,900,000
3,100,000
3,300,000
3,500,000
3,700,000
3,900,000
4,100,000
4,300,000
4,500,000
Employed in Hotels, Bars, and Restaurants
150,000
170,000
190,000
210,000
Hotel Occupancy Rate
62.0
64.0
66.0
68.0
70.0
72.0
74.0
76.0
Total Tourist Rooms
50,000
55,000
60,000
65,000
70,000
Gross Domestic Product (in Millions of Dominican Pesos, from 1991)
200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0
Housing Units
• Hotels• Real estate development• Mixed projects
Complementary Offerings
• Golf• Sports marinas• Theme parks
Support andInfrastructure
• Roadway infrastructure• Ports and airports• Tourism support industries
18 19
REALESTATETOuRISMINTHEDOMINICANREPuBLIC
ManytouristswhovisitDominicanRepublic,withitsmultipleandvariedattractions, and decide to choose it as their first or second place ofresidence.Whenthishappens,oneof theirfirstdecisionsis toinvest inrealestatebyacquiringavillaorapartmentinatouristarea.
Itshouldbementioned,asakeyfactorintherealestatedevelopment,thatpropertiesinthiscountryareexperiencingastrongincreaseinvalue.Thismakesthemhighlydesirableforthoseseekingonlytomakeaninvestmentthatwillprotecttheirmoneyandputittowork,instabilityintheworldwidefinancial picture, which is marked, among other factors, by a housingcrisis. InDominicanRepublic, thisdidnothave thenegativeeffects thatwereexperiencedinothercountries.
Ittakesjustonelookaroundanyofthetouristareastonoticethetremendousnumberofvillas,apartments,etc.,surroundedbytopgolfcoursesfromthebestdesignersintheworld.Numerousmodernandcomplexmarinasonourcoasts,toconfirmtheexpansionofrealestatetourisminthecountry,unparalleledbyanyotherislandintheCaribbean.
These investments flow mainly to Punta Cana, in the province of LaAltagracia,althoughtheyincludeareasofinfluenceoveralmosttheentirecountry:LaRomana,Bayahíbe,Samaná,PuertoPlata,JuanDolio,Miches,and santo domingo.
Toputthisdevelopmentintoperspective,sufficeittosaythatoverall,thenewinvestmentsapprovedby thiscountry’scompetentauthorities in thelast fewmonths haveaddedalmost25,000new rooms to thenation’stouristofferingsandwilldirectlycreatemorethan21,000stableandwell-paidjobs.
REASONSTOINVESTINTHEDOMINICANREPuBLIC
DominicanRepublicgeographicallyadvantagedlocationnearthemajorworldtourism-generatingcountries,allowingvisitorstocomeforaweekendorweeksandreturnhomequickly.
ApersonwhosettlesintheDominicanRepubliccanachieveahighstandardofliving,asthecountryhasthebenefitsofpeace,security,andcheerfulandhard-workingpeoplewhowanttogetahead in life.
Within the framework of its democratic system, DominicanRepublic offers the security that both domestic and foreigninvestors need. A large number of developers have takenadvantageof this factandchosenusasadestination for theircapital.
Ourdemocracy,nowfullymature,holdsfreeandopenelectionseveryfouryears,inwhichexecutive,congressionalandmunicipalauthoritiesarechosen.
The constitution of the Republic guarantees the free enterprisesystem, under which the free trade system is respected; thishas permitted the development of major companies, whodevelopprojects,producegoods,offerservices,andguaranteeemploymentformillionsofDominicans.
Wearehighlycompetitiveintermsofcosts,andwebenefitfromvariousfreetradeagreements.ForexampleCAFTA-DRwiththeunited States and Central America grants preferential accessto those markets, and an Economic Partnership Agreement (EPA) with theEuropeanunionassuresrobust.
We have one of themost advanced communications systems in all of LatinAmerica,witha teledensityofover100percentwhich isanadvantage fortoday’sbusinessworld.
QuALITyOFLIFE
STRONGINCREASEINPROPERTyVALuES
FREETRADEAGREEMENTWITHTHEu.S.
PROXIMITyTOLARGEMARkETS
POLITICALANDECONOMICSTABILITy
TRANSPARENTLEGALFRAMEWORk
LEGALSECuRITy
yOuNG,WELL-TRAINEDWORkFORCE
MODERNINFRASTRuCTuREDEVELOPMENT
APPROPRIATESuPPORTSERVICES
ADVANCEDCOMMuNICATIONSSTRuCTuRE
comPetItIve costs
TAXINCENTIVES
20 21
INCENTIVESOFFEREDTOINVESTORSByTHECOuNTRyANDTHETOuRISMSECTOR
Since 2001, Tourism IncentiveAct 158-01 has been in placeinDominicanRepublic,revolutioningtheinvestmentclimateandallowinglargevolumesofcapitaltobeattractedtothetourismsector.
Thepurposeofthisactistopromotenewdevelopmentinareasofthecountrywhich,despitetheirmajorbasicattractions,havehadlimitedgrowth.Italsoservestocreatenewcomplementaryofferingsintouristcentersthathavealreadybeendevelopedandtosupport therenovationofhotelproperties thathavebeeninoperation for five or more years. this law grants an exemption fromallnationalandmunicipaltaxesfortenyears.Itismanagedbyapublic-privateagencythatmeetsperiodicallytoreviewtheapplicationsforproposednewdevelopments.
Infact,theTourismPromotionCouncil,Confotur,grantstwolevelsofapprovalsfornewtourismprojects:thefirstisprovisionalforstarting thedevelopment; theother isfinal,once theproject isadvancedenoughtobeconsolidatedandlaunched.
A)THEINCENTIVESFORPROVISIONALAPPROVALARE:1. Exemption from the requirement to legally establish thecompany2.Increaseinthesharecapital3.Propertytransfertax(3percentofthevalueoftheproperty)
B)LIkEWISE,FINALAPPROVALGRANTSTHESEEXEMPTIONS:1.Incometaxfortenyears2.Nationalandmunicipaltaxes3.Taxesonconstruction,plans,etc.4. taxes on the payment of loan interest5. Reinvestment tax of 20percent (tax savings onanotherexistingcompany,forfiveyears)6. Equipment import (exempt fromcustoms taxes, taxesontransferofindustrialgoodsandservices)7. the tax on luxury housing
Essentially, provisional approval exists so that companies canadd to their capital,purchase land,build (if they seekout thecorresponding construction permits, etc. at the same time), sothat when they get the final approval, they are already in a positiontostartwork.
FOREIGNINVESTMENTLAWForeignInvestmentAct16-95grantsequalrightsanddutiestoforeignersandDominicansandopensupallpossibletypesofbusinessesandtrade.Itrecognizesthatforeigninvestmentandtechnologytransfercontributetothecountry’seconomicgrowthandsocialdevelopmentbyfavoringcreationofemploymentand foreign currency, promoting the capitalization process,andcontributingefficientmethodsofproduction,marketing,and administration.
Thislawalsopermitsthefreerepatriationofinvestedcapitaland profits.
Thecountryalsohasfreecirculationandexchangeofforeigncurrencywithnoobstaclesofanykindor controlof foreigncurrencyexchange,withthefreemarketdeterminingthedailyexchangeratesagainstothercurrencies.
BENEFITS FOR PENSIONERS AND ANNuITANTSWITH AFOREIGNSOuRCEOFFuNDSACTthe benefits for Pensioners and Annuitants with a Foreign Source of Funds Act 171-07 grants the following to theseindividuals,asanincentivetobringandkeepthemhere:
•Aprogramofresidenceinthecountrythroughinvestment(thosewhoarebylawconsideredtobedependentsofthepensionerorannuitantalsobenefitfromthisprogram)•Exemptionfrompayingtaxesonhouseholdeffectsandpersonal items•Partialexemptionfrommotorvehicletaxes•For thefirstproperty that isacquired,exemption fromtaxesonpropertytransfers;•Exemptionof50percentofmortgagetaxes,whenthecreditors are financial institutions duly regulated by theMonetaryandFinanceLaw;• Exemption of 50 percent on real estate tax, whenapplicable;• Exemption from taxes encumbering the payment ofdividendsandinterest,whethergeneratedinthecountryorabroad;•Exemptionof50percentoncapitalgains,amongothers
In order to take advantage of this law, it is a requirementthat thepensionerorannuitant receiveamonthly incomeofno less thanuSD$1,500and$2,000,respectively. If theyhavedependents,anadditionalmonthlyincomeofuSD$250is required for each of them. These amounts,whichwill bedeclaredas income in order to take advantage of this law,shallbeexemptfromincometax.
ALSOSHELTEREDByTHISLAWARE: A)Dominicancitizenswhoarepensionersof,orretireesfrom,institutionsorgovernmentsofothercountries,orthosewhocanprovethattheyhaveincomeundertheconditionsestablishedbythelaw,andhaveresidedabroadpermanentlyfornolessthantenyears;and
B)Foreignersinthecountrywhoacquirethestatusofpensionerand/or annuitant.
This law recognizes the right thatpensionersandannuitantshavetoacceptremuneratedemploymentinthiscountry,subjecttopaymentoftheassociatedtaxestotheDominicanStateforthesalaryearnedbyeachactivity.
This contributes greatly by strengthening the country’s legalframework, thereby incentivizing foreign investment andpromotingtourismin theDominicanRepublic. Italsohas theeffectofsupportingthelargerealestateprojectsthathavebeenbeingdevelopedinourcountryoverrecentyearsandthatareintendedforforeigners,Dominicansandresidentforeigners.
22 23
ACQuIRINGREALESTATEINTHEDOMINICANREPuBLICForeigners have complete legal capacity to acquirepropertyorpropertyrightsundernospecialconditions.The rules that apply to Dominican purchasers are thesame as those for foreigners.
When there is interest in purchasing a property, thepropertyshouldbeverifiedattheDominicanTitleRegistryOffice.Thepurposeofthisistoobtainwrittenconfirmationoftheresultoftheinvestigationandtoestablishthatthispropertyhasnoanomaliesofanykind.ThiscanbedonebyrequestingacertificatefromtheRegistrarofTitles.Thisimportant step protects individuals or companies whowish to acquire a property, as it reveals the existenceofanysaleormortgage that isnotyet recordedat thetimethebuyersdeposittheirsalescontractforregistrationpurposes.
Rapidregistrationofthesaleisextremelyimportant.Forthis step, purchasers deposit an original deed of sale,duly legalized by a notary public, in the title registryoffice,alongwiththecertificateoftitle,whichshouldbeinthenameoftheseller.Thiswillthenbecanceledandreplacedbyanewcertificateoftitleinthenameofthepurchaser.
Thistypeoftransactioninvolvesapaymentoftaxesandfees to the title registry office, although according totheTourism Incentive Law, thesearedeductible. Issuingmortgages and encumbered purchases is regulated bytheLandRegistryLaw,theCodeofCommerce,theCivilcode and other related laws.
MINISTRyOFTOuRISMONE-STOPWINDOWMAkESINVESTINGEASIERThe start of the online one-stop-shop to facilitate andaccelerate investments in tourism have been announcedin may 2012. The facility is intended to make it easierforDominicanand foreign investors to get their projectsapproved.“Thisisanimportantstepwhereworkingside-by-sidewith technologywecanbenefitallandinvestors,even from abroad, can submit their projects and getanswers from the ministry of tourism.
ThecontentoftheplanisevidenceoftheimportancetheMinistry has given to planning, considering it essentialfor continuous development and the sustainability ofthe country’s tourism industry. Participative planningmethodologieswere used to develop the plans,workingcloselywithprivateandpublicsector.
userscanaccesswww.dpp-mitur.gov.doforthenewonlineservice. Informationon the legal frameworkandTourismdevelopment Plans of the ministry of tourism and the incentives offered under Tourism Promotion Law 158-01hasalsobeenpostedonline.
MORTGAGEREGuLATORySySTEMFor the purposes that may apply, all types of property rightsmaybemortgaged,betheytitle,operation,oruserrights.Facilitiesthatmaybeacquiredbyindividualsorcompaniesarealsoconsideredrealestateandmaybemortgaged. It is important to point out that mortgages on future properties are not accepted.Nevertheless,mortgagecreditorinterestisextendedtoimprovementsmadeonthepropertyafterthecontract.
Inorderforamortgagetobevalidandbindingagainstthirdparties,mortgagedebtorsshouldhavealegallyregisteredtitle.Personswithconditionalpropertyrightsmaygrantmortgagesunder thesameconditions thataffecttheirrights.
Mortgages should be registered at the title registryoffice for the place where the property is located;this is done by depositing the guarantee contractandthecertificateoftitle.Thedateofregistrationwillbe recorded as the date these are deposited, eventhoughthephysicalissuanceofthemortgagecreditorcertificatetakesplacesometimeafterwards.
DEPARTMENTFORINVESTMENTPROMOTIONANDDEVELOPMENT
Av.CayetanoGermosén,esquinaAv.GregorioLuperón,SantoDomingo,DominicanRepublic
Phone: 809-221-4660invest@godominicanrepublic.comwww.godominicanrepublic.com
www.sectur.gov.dowww.dpp-mitur.gov.do
Ministerio de Turismo