DOMINICAN REPUBLIC: An introduction

Overview:

The Dominican Republic continues to strengthen its position as the most attractive destination for foreign direct investment (FDI) in the Caribbean and Central America, establishing itself as a regional benchmark due to a convergence of factors that foster a favourable business environment. This leadership stems from strong democracy of almost 70 years without interruption, a comprehensive strategy encompassing macroeconomic stability, a robust legal framework, and public policies geared toward sustainable development and technological innovation.

One of the core pillars underpinning this positioning is the country’s political, economic, and social stability. Even amid regional and global volatility, the Dominican Republic has demonstrated remarkable resilience to external shocks, which significantly bolsters investor confidence. This environment of stability is reinforced by strong legal certainty, ensuring well-defined rules, protection of property rights, and contract enforcement—critical components for long-term investment planning and execution.

The Dominican legal and institutional framework has evolved to actively promote competitiveness and investment facilitation. Investment-friendly legislation—such as Free Trade Zone laws, export promotion acts, and fiscal incentive regimes—is complemented by increasingly efficient and transparent public institutions. These factors have earned recognition from key international organizations, including the Economic Commission for Latin America and the Caribbean (ECLAC), the United Nations Conference on Trade and Development (UNCTAD), and credit rating agencies such as Moody’s, Standard & Poor’s, and Fitch Ratings.

Projections for the Dominican economy in 2025 indicate a real GDP growth rate exceeding 4.5%, significantly outperforming the regional average. This performance is supported by tangible indicators: expected FDI inflows reaching approximately USD4.8 billion and export volumes surpassing USD 15 billion. These figures not only underscore the resilience and dynamism of the Dominican economic model but also its ability to diversify strategically across key sectors, including tourism, manufacturing, information technology, financial services, renewable energy, and special economic zones.

A further competitive advantage lies in the country’s human capital. Strategic investments in technical and higher education, alongside capacity-building initiatives aligned with high-growth global industries, have resulted in a workforce that is increasingly qualified, bilingual, and technologically proficient. This talent pool is well-positioned to integrate into global and regional value chains, driving productivity and innovation.

Crucially, the administration of President Luis Abinader has played a pivotal role in shaping this enhanced global positioning. His administration has pursued a vision centred on promoting foreign investment, fostering innovation, and accelerating the digital transformation of the national productive system. These efforts have redefined the Dominican Republic’s role in the global economic landscape, demonstrating how coherent public policy and long-term strategic planning can structurally transform an economy. As a result, the country now stands as a competitive and strategic hub for investment and growth in Latin America and the Caribbean.

Real Estate & Tourism

The Dominican Republic’s tourism sector has experienced significant evolution, primarily driven by legislative initiatives and targeted incentives. The sector’s formal development began with Law 153 of 1971, designating tourism as a national priority and providing incentives until its repeal in 1992. A resurgence occurred with the enactment of Law 158-01 in 2001, which established the Tourism Development Council (CONFOTUR) to regulate and incentivize investment. Amended by Law 195-13 in 2013, the updated framework expanded benefits to previously excluded regions including our capital, Santo Domingo and Puerto Plata.

Under these legal frameworks, over 570 tourism-related projects have been developed, significantly contributing to economic growth, employment, and diversification of accommodations. The sector’s transformation is evident in the proliferation of luxury resorts and widespread geographic distribution of tourism benefits. In 2024, the Dominican Republic marked a record with over 11.1 million visitors—8.5 million by air and 2.6 million via cruise ships—generating approximately USD10.6 billion in revenue, 958,000 jobs, and contributing nearly 20% to GDP, alongside over RD130 billion in tax revenue.

The U.S., Canada, and Colombia were among the top source markets, with Punta Cana airport accounting for 59% of arrivals. The influx of tourists and favourable investment climate attracted global hotel chains—Marriott, Hyatt, Hilton, IHG, and Spanish brands like Meliá and Bahía Príncipe—spurring upscale, sustainable developments and expanding high-end tourism offerings, including golf courses, marinas, and fine dining.

DMK Abogados has played a pivotal role in this sector for over three decades, advising major hotel chains and tourism stakeholders on complex legal, regulatory, and government matters. The firm has influenced national tourism policy, secured key project approvals, and recently achieved a landmark judicial ruling concerning CONFOTUR’s incentive limits (not applicable to airports), reinforcing its legal authority in shaping the Dominican Republic’s tourism landscape.

Corporate & Tax:

The legal framework governing corporate affairs in the Dominican Republic has significantly evolved, especially in response to the digitalization trend accelerated by the pandemic. Notably, digital services offered by Chambers of Commerce and Production are expanding, with a goal for 2025 to enable digital signatures and nationwide digital service authorisation. Key institutions, including the Dominican Tax Authority (DGII), the Attorney General's Office, and the General Directorate of Migration, continue to enhance their online services, facilitating investment and business operations.

In the realm of taxation, new policies and regulations are being introduced, such as Rule 03-2025 on motor vehicle transfers and Rule 03-2024 for real estate discharges. A draft law aimed at reducing tax litigation is under discussion, and significant changes to tax liability rules are being implemented, such as the requirement for companies to designate a responsible individual for tax compliance by April 30, 2025. Failure to comply will result in an ex officio appointment by the DGII.

Additionally, the tax administration is advancing electronic invoicing under Law 32-23, with a full implementation deadline of May 15, 2026. The tax authority also continues its educational initiatives on anti-money laundering and terrorism financing.

Corporate law is governed by Law 479-08, amended by Law 31-11, with recent modifications addressing shareholder tax compliance responsibilities, emphasizing individual liability for tax obligations.

DMK Abogados in recent years has had an active and outstanding participation in processes of discussion of regulations presented by the Tax Authority and in the commercial market, assuming the representation of clients with notable transcendence in the sectors of hospitality, finance, real estate, pharmaceuticals, jewellery sector, free trade zones, among others.

Dispute Resolution:

On January 17, 2023, Law 2-23 was enacted, repealing the outdated Law 3726 (1953) and its amendment Law 491-08 (2008), which regulated the appeal procedure. Law 2-23 modernises the judicial review process, with a focus on enhancing legal certainty, expediting dispute resolution, and reducing judicial backlog. The law establishes rigorous regulations for the abrogation resource and introduces an annulment provision, while excluding criminal matters, which remain governed by separate laws. Notably, Law 2-23 shortens procedural deadlines and eliminates the requirement for hearings, marking a significant step in reducing delays that previously plagued the system.

By its second year in effect, the law has contributed to a reduction in judicial backlog, digital transformation within the judiciary, and improved access to justice through the Digital Access Portal. Furthermore, the Supreme Court of Justice issued key rulings, including Ruling No. SCJ-SR-24-0188 (2024), which refined the role of the Supreme Court of Justice in cassation procedures and promoted direct rulings. The Constitutional Court also made strides in issuing 1,251 judgments in 2024, reaffirming constitutional principles like due process and judicial protection.

Law 2-23 exemplifies efforts to enhance dispute resolution, ensuring swift and fair legal outcomes while reinforcing judicial integrity across various sectors.

Labour & Employment:

Labour law in the Dominican Republic is governed by a complex framework that ensures worker protection while maintaining a balance in employer-employee relations. The foundation of this legal structure dates back to the 1955 Constitution and the 1951 Trujillo Labor Code, with the current regulatory framework being shaped by the 1992 Labour Code (Act No. 16-92). This Code regulates aspects such as employment contracts, working hours, salaries, vacations, and maternity leave, while also safeguarding workers' rights to unionise and receive social protection.

The National Congress is reviewing a bill to reform the Labour Code, focusing on issues like vacations, working hours, and labour disputes. However, a consensus has not been reached on modifying unemployment benefits, with unions opposing changes. The reform process also involves proposals such as the creation of a General Fund for Unemployment Assistance (FGAC).

Dominican labour law is also influenced by international conventions, particularly those from the International Labour Organization (ILO), like the extension of maternity leave to 14 weeks. Additionally, the COVID-19 pandemic has prompted changes, including the integration of teleworking, which introduces both opportunities and challenges in labour law.

Despite progress, significant challenges remain, such as labour informality, limited access to justice, and a burdensome legal process, which affect workers’ rights and protections.

Environment:

The Dominican Republic’s environmental legal framework has evolved significantly since the 1970s, marked by the establishment of Los Haitises National Park as one of the country's first conservation efforts. This was followed by the creation of over 25 national parks and the formalization of environmental policies. The 1983 Valle Nuevo fire prompted the creation of a national park, further emphasizing the country's commitment to environmental protection. By the 1990s, the Dominican Republic signed numerous international agreements, such as the Convention on Biological Diversity and the United Nations Convention on Climate Change, signalling its alignment with global environmental goals.

A pivotal moment came in 2000 with the enactment of Law 64-00, establishing the Ministry of Environment and Natural Resources. Environmental protection was further reinforced in the 2010 constitutional amendment, which declared natural resources and biodiversity as inalienable patrimony and imposed state responsibility for environmental protection. Over the years, the country has signed over 15 environmental agreements, influencing national policies on sustainable resource management.

In sectors like tourism, mining, and industry, sustainable practices have flourished, with ecotourism and environmentally responsible mining gaining prominence. The issuance of a sovereign green bond in 2024 reflects the country's dedication to sustainable public projects. DMK Abogados has played a key role in environmental law, overseeing compliance and facilitating significant projects, including co-management agreements with the Ministry of Environment.

Intellectual Property:

Intellectual Property (IP) in the Dominican Republic is supported by a robust legal framework that aligns with international standards, safeguarding the rights of creators and fostering economic and cultural development. The Constitution, along with national laws such as Copyright Law No. 65-00 (2000) and Industrial Property Law 20-00 (2000), upholds IP rights. These laws are complemented by international treaties like TRIPS and the DR-CAFTA, providing comprehensive protection across industrial property and copyright domains.

Key institutions include the National Copyright Office (ONDA) and the National Industrial Property Office (ONAPI). ONDA enforces copyright laws, ensuring creators’ control and remuneration, and has significantly increased registered works from 435 in 2020 to 25,663 in 2023. ONDA has also enhanced registration processes and promoted collective management societies. ONAPI manages industrial property rights under Law 20-00, recording substantial applications for trade names, trademarks, and patents, thereby fostering innovation and competitiveness.

The Dominican Republic's commitment to IP protection is evident in its ratification of the Marrakesh Agreement and its removal from the Special Watch List, reflecting compliance with global IP standards and enhancing legal certainty for foreign investors. Notable international achievements include the adoption of the Nice Classification and accession to the Patent Cooperation Treaty (PCT), further encouraging foreign investment. DMK Abogados plays a key role in advising clients across diverse industries on IP protection.