Incentives for Foreign Investments in the Dominican Republic - INVESTMENT GUARANTEES (part 1)

Multilateral Investment Guarantee Agency (MIGA)

MIGA is an autonomous division of the World Bank, an international financial institution that provides loans to developing countries, as part of its commitment to promote foreign investment, international trade and facilitate capital investment. Founded in 1988, MIGA is today a multilateral development agency comprising 175 member countries and promoting the flow of foreign direct investment (FDI) to developing countries by offering guarantees to investments in socially and environmentally sound projects. It partners with other global organizations, donors, and insurance providers to offer a comprehensive array of services to investors.

In 2008, a project of 106 kilometers of highway linking the capital city, Santo Domingo in the south, to the burgeoning tourist market in the Samana peninsula to the north, was partially funded through a critical guarantee from MIGA. The guarantee opened financial doors by securing an investment rating higher than the domestic requirement and attracting investors keen on opportunities in Latin America. The high rating also lowered the perceived risks associated with the project, and permitted investors to arrange financing through capital markets. This north-south corridor now provides growth opportunities for agricultural production, agribusiness, and tourism.

Incentives for Foreign Investments in the Dominican Republic - INVESTMENT GUARANTEES (introduction)

Investments in developing foreign markets present opportunities, but also pose perceived risks associated with noncommercial activities. Investors can mitigate these risks and improve their creditworthiness with lenders through international and U.S. agencies designed to insure eligible projects against possible losses. Three commonly used agencies are MIGA, Ex-Im Bank, and OPIC. 

Incentives for Foreign Investments in the Dominican Republic - Regulation 214-04 on Investment Registration

This regulation governs investment registration, and grants important benefits to investments that are formally registered with the CEI-RD within 180 calendar days from the date the investments are made. The CEI-RD must respond to an application for registration within 15 working days of receipt. The benefits to registration are as follows:

• Free Fund and Currency Conversion. Investors are granted free access to international currency and fund conversion through local banks and the Central Bank of the Dominican Republic.

• Free Repatriation of Dividends and Capital. The foreign investor has the right to remit abroad in foreign currency all capital invested, as well as capital gains and dividends, after complying with the existing tax legislation. (The corporate tax rate is presently 25% for all corporations. The investor also has the right to repatriate fee and royalty obligations resulting from a technology service agreement.

• Expedited residency acquisition. Investors who register their investment benefit from a fast-track procedure if they decide to become residents of the Dominican Republic.