The Dominican Republic’s strategic location, which is close to extensive consumer markets and main sea routes, gives the country the potential of becoming a hub for trade and investment as well as a logistical centre for the large trans-Atlantic ships.
The country has a highly developed system of industrial free zones, efficient networks for shipping and distribution channels and one of the most advanced telecommunications systems in Latin America. It has an efficient transportation network, enabling expeditious and reliable cargo shipment and travel, excellent road systems, nine international airports (with over 50 flights daily to and from the United States and Europe), several domestic terminals in important trade locations and twelve modern shipping ports, including the Multimodal Caucedo Port, which is BASC certified.
The most recent “Doing Business Report 2013” by the World Bank which evaluates a total of 185 economies, highlights the key indicators where the Dominican Republic has an outstanding performance, even higher in some variables than the average in the region of Latin America and the Caribbean.
Trading across borders
According to data collected by Doing Business 2012, exporting a standard container of goods requires 6 documents, takes 8 days and costs US$1,040. Importing the same container of goods requires 7 documents, takes 10 days and costs US$1,150. Globally, the Dominican Republic stands at 46 in the ranking of 185 economies on the ease of trading across borders. The rankings for comparator economies and the regional average ranking provide other useful information for assessing how easy it is for a business in the Dominican Republic to export and import goods.
Two types of frameworks can facilitate access to credit and improve its allocation: credit information systems and the legal rights of borrowers and lenders in collateral and bankruptcy laws. Credit information systems enable lenders to view a potential borrower’s financial history (positive or negative)—valuable information to consider when assessing risk. And they permit borrowers to establish a good credit history that will allow easier access to credit. Sound collateral laws enable businesses to use their assets, especially movable property, as security to generate capital—while strong creditors’ rights have been associated with higher ratios of private sector credit to GDP. Globally, the Dominican Republic stands at 83 in the ranking of 185 economies on the ease of getting credit.
Well-functioning courts help businesses expand their network and markets. Without effective contract enforcement, people might well do business only with family, friends and others with whom they have established relationships. Where contract enforcement is efficient, firms are more likely to engage with new borrowers or customers, and they have greater access to credit.
In the Dominican Republic enforcing a contract takes 460 days, costs 40.9% of the value of the claim and requires 34 procedures. Globally, the Dominican Republic stands at 84 in the ranking of 185 economies on the ease of enforcing contracts.
Taxes are essential. They fund the public amenities, infrastructure and services that are crucial for a properly functioning economy. But the level of tax rates needs to be carefully chosen—and needless complexity in tax rules avoided. According to Doing Business data, in economies where it is more difficult and costly to pay taxes, larger shares of economic activity end up in the informal sector—where businesses pay no taxes at all.
On average, firms make 9 tax payments a year, spend 324 hours a year filing, preparing and paying taxes and pay total taxes amounting to 42.5% of profit. Globally, the Dominican Republic stands at 98 in the ranking of 185 economies on the ease of paying taxes.
Economical and Political Stability in the Dominican Republic
Over the last decades the country has experienced consistent robust economic growth and stability – fruits of the government’s constant effort to ensure development and promote investment in the country’s markets.
Dominican Republic Market Access
An open trade agenda has given the country access to approximately 878 million consumers worldwide. The country is a founding member of the World Trade Organization and has entered into many free trade agreements with its trading partners – including the Dominican Republic-Central America Free Trade Agreement with the United States (DR-CAFTA) and the Economic Partnership Agreement with the European Union and the CARIFORUM countries.