Dominican Republic has some of the most friendly business climates in Latin America, a place where investors can find profitable business at a low risk, something uncommon in Latam, a region where political and economic instability is an usual matter.

Why is this? Because in the last decades the country has been governed by democratic leaders that value private investment and want to create jobs and opportunities for all Dominicans.

Dominican Republic has opened to the world and foreign investors are taking advantage of it. In 2020 the Foreign Direct Investment was $ 2.84 billions, a rise of ten percent compared to 2019.

How have they achieved this? The secret of DR success is basically a thriving tourism industry and a flourishing real estate market. Furthermore, Dominican Republic has understood how much investors value financial freedom, so they have closed Free Trade Agreements with many countries like the United States and Central America. This is a key aspect, because expanding your operations to the Dominican Republic would allow you to have an easy path to the American market.

Also, tax rates in DR are really competitive. Dominican Republic doesn’t tax income coming from overseas and uses tax incentives on foreign investments that the State recognises as valuable to the development of the nation.

All this makes Dominican Republic a fantastic investment opportunity. In recent years, these conditions have brought tons of FDI into the island and prosperity to all Dominicans.

Tourism 

Dominican Republic is the tourism power in the Caribbean. This is a country that makes a living from the almost seven millions tourists that visit them every year. In 2019, these people spent 7.4 billion dollars, accounting more than 10% of the country’s GDP. Tourism is a crucial source of revenue for the coastal parts of the island.

The principal point of the tourism industry is Punta Cana, home of the most famous beaches in the country, which are visited by millions of tourists from all around the world every year. This zone has an optimal hotel infrastructure, casinos, nightclubs, an international airport and around 50 kilometers of beaches where vacationers can take yacht rides or sunbathe, definitely a world class experience.

Since 2010 income from tourism has arisen at a great pace, passing from 4.1 billion to 7.5 billion US dollars in 2019, an 82% growth! From 2010 to 2019 the country received almost sixty billion US dollars in tourism, more than any other country in the Caribbean.

Tourism demand will keep growing in the next few years and so will the supply. Now in Punta Cana alone, more than 25 hotels from 10 hotel chains are being built at the same time. This will benefit the local market of finishing materials, such as interior items, furniture and household appliances that are produced in DR and are more inexpensive than the imported ones.

COVID hitted hard on the DR tourism industry. In 2020 the number of tourists fell around 62% compared to 2019. But once the pandemic is over vacationers will come up again to Dominican beaches, because everybody loves Punta Cana.

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Real Estate

One of the main beneficiaries of the thriving tourism industry has been the real estate market. Two conditions are present on DR: a growing demand along with an undervalued market. The result is that Dominican Republic has become one of the best places in the world to invest in rental property.

Yet, if you are considering investing in Dominican Republic, maybe the easier way is on the real estate market. You could buy a rentable property for as little as US$ 100,000 or even less, counting on the available financing opportunities for foreigners in DR, who can buy a property with the same rights and obligations as a dominican citizen.

The cheapest social housing (one-room apartments) starts from $ 20,000 to $ 40,000. The area of such an apartment will be from 20 to 50 square meters. Houses with such apartments have small adjoining territories with parking and are located relatively close to each other, usually located in protected areas of 30-40 buildings.

Regarding middle-class apartments, as a rule, have a swimming pool in the local area and a children's playground. These can cost from USD 40,000 to 100,000. Also there are individual houses (villas) costing from $ 70,000 to $ 200,000.

More expensive housing is located closer than 500 meters to the ocean, but owning it is associated with higher operating costs. Optimal in terms of ownership are residences 500-1000 meters from the ocean with their own beach club and access to the ocean. The average cost of apartments in them is from $ 150,000 to $ 250,000.

However, when purchasing housing for rent will depend on your strategy. For short-term (more cost-effective) rentals, housing near the beach is in great demand. For the long term it can be taken at more distance.

Telecommunications

Having millions of tourists distributed on the 1602 km Dominican coast has a disadvantage: it's difficult to cover such a wide space with a good internet and mobile connection. While on the capital Santo Domingo the average internet connection reaches more than 10mbps, on Santiago, the country’s second largest city, has an average download speed of 1.5mbps, which could barely run Netflix.

Connecting all these people distributed on such remote locations can produce some high profits, because everybody values a good internet connection to attend a Zoom meeting or a Whatsapp video call.

Some Quick Facts about the Dominican Republic

Extracted from the IMF, Moody’s, World Bank, Heritage Foundation, Doingbusiness.org, Dominicana’s Central Bank.

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