Incentives for Foreign Investments in the Dominican Republic - DR-CAFTA Free Trade Agreement

This free trade agreement among the United States, the Dominican Republic and the Central American countries of Honduras, Guatemala, El Salvador, Nicaragua and Costa Rica grants investors in any of the member states the following benefits:

• Non-discriminatory treatment among member states.

• Limited performance requirements.

• Freely transferable investment funds.

• Expropriation protection not governed by international law.

• A “minimum level of treatment” pursuant to international law.

• Freedom to contract with key managerial staff of any nationality.

• Dispute resolution procedures between the country and the investor.

• Binding international arbitration for investor damage claims against a member state.

Incentives for Foreign Investments in the Dominican Republic - Law 16-95 about Foreign Investments

This law reifies the important equality provision of Article 25 in the new Constitution, providing equal treatment and non-discrimination to both national and foreign investments. The statute and its enabling regulation (Decree #380-96 as amended by Decree #163-97), grant foreign investors, who are contributing capital to companies operating in the Dominican Republic, unlimited access to the Dominican economy except for activities that negatively impact the local environment or public, or compromise national defense or security.

Capital contributions can be made through several channels and in a variety of forms. Accepted channels of contributions are: 1. directly to the Dominican operating company from sources outside the country, 2. directly by reinvesting profits derived from the registered Dominican foreign investment back into that same operating company, and 3. indirectly from profits derived from one registered Dominican foreign investment and invested in a different Dominican operating company. Acceptable forms of contributions as foreign investment can be liquid currency, general contributions, financial instruments, or intangible technological property and knowledge.