Incentives for Foreign Investments in the Dominican Republic - Free Trade Zones (Law 8-90)

Free Trade Zones represent a pillar of the Dominican economy and are an attractive investment opportunity for any investor interested in producing goods or services for overseas markets in government designated areas within the country. The Dominican Republic boasts more than 50 zones, comprising more than 500 companies. It has one of the most advanced free-trade systems in the world and ranks fourth in terms of quantity. 
The National Council for Export Free Zones regulates the industry dominated by Apparel and Textiles (69.1%), Tobacco (6.4%), Electronics (5.3%) and Pharmaceuticals (5.3%). Almost half the free zone businesses are owned by U.S. investors, more than a third by Dominicans, and the remainder predominantly by Asians.
Law #8-90 provides the following generous array of customs and tax incentives to free trade zone investments for a period of fifteen years.
• Exemption from income tax.
• Exemption from all corporate taxes on tangible and intangible assets and net worth.
• Exemption from all taxes on construction, conveyance, and registration of real property.
• Exemption from incorporation and capitalization taxes.
• Exemption from the ITBIS tax (value-added tax).
• Exemption from municipal taxes.
• Exemption from existing export or re-export taxes, except those expressly stated in Law #8-90.
• Exemption from import taxes, customs duties and related charges on raw materials, equipment, construction materials, vehicles, office equipment and any other goods necessary for the construction, preparation and operation of a free trade zone business.
• Exemption from consular duties for goods or services destined to other free trade zones.
• Exemption from import taxes and customs duties on raw materials imported by a
• Dominican company for use in finished or semi-finished products destined for export to a free trade zone. This exemption requires prior authorization from the national regulatory agency.
Also, goods and services from one free trade zone can be sold or transferred to another free trade zone with prior authorization from the national regulatory agency. However, goods and services sold in the Dominican market are subject to all import taxes, customs duties, and quota requirements, except those that qualify as a priority sector under Law #56-07 (textile and accessory manufacturing, leather and shoe manufacturing, and furs), which enjoy more liberal import tax and duty treatment.