The Dominican Republic is rapidly becoming the Ireland of the Caribbean – that is, a magnet for foreign investment – thanks to a solid and investor-friendly legal regime, generous incentives and an infrastructure capable of supporting new technologies and IT in general. Investors enjoy the benefits of a law that ensures equal treatment of domestic and foreign investment, full repatriation of capital and profits, and free currency convertibility. The law also offers incentives to less-developed tourist areas and new ones in provinces and localities with large potential. Tax laws for a period of 10 years are offered under the Tourism Promotion Law.
The Dominican Republic has taken the lead from its regional rivals in attracting FDI through its strategic geographical location, multilingual resources, natural resources, services and competitive cost, highly skilled workforce. To take advantage of its unique position, the country is actively promoting itself as an ideal investment centre for projects that fulfil its strategic goals: to promote employment and, at the same time, its position in new technologies. It is striving to diversify its investment opportunities, which include broadening its network of free zones and creating industrial clusters that provide the investor with a wide range of areas in which to develop and export products and services.
Among the areas that make the Dominican Republic an ideal place to invest is its business process outsourcing (BPO) industry, which includes call centres. The centres that are now being developed are aimed at the Spanish-speaking public in the US as well as English speakers in the North American market and European companies seeking to outsource their customer care operations.
Duty free zones
Most of these call centres operate under the duty free zones scheme, which offers substantial investment incentives such as 100% exemption from corporate tax, free import of equipment and accessories, building material and components, free import of transportation vehicles and tax-free access to the US and EU. The Dominican Republic operates 60 industrial free zones, whose customers include leading global corporates such as Hanes Underwear, Levi Strauss, Verizon, Tonka Footwear, Timberland, Abbott Hospital Supply, Tyco, Sarah Lee and Allen Bradley, a division of Rockwell International.
There is no better place in the Caribbean to invest in IT than the Dominican Republic. The country has a highly sophisticated fibre optics-based telecoms network and broadband connectivity system. Cable and wireless lines now total 3.5 million and the cost of a T1 connection is the lowest in Latin America. The country’s per capita consumption of telecoms is higher than that of the US.
The Dominican Republic is connected to the rest of the Caribbean, Central America, Colombia, Venezuela and the US via an underwater fibre optic cable that guarantees the security of information and electronic transactions. The country’s four major international carriers are Verizon Dominicana, Orange Dominicana, Centennial Dominicana and Tricom, three of which are foreign investment ventures and the fourth a mixed capital operation. Moreover, the government is actively negotiating to formalise an alliance with the Florida High-Tech Corridor that runs from Tampa to Orlando and Daytona, as well as with other high-tech associations and companies, with a view to promoting business linkages, joint ventures and greenfield investments in areas such as medical equipment, IT and micro-electronics.
No country in the region can match the Dominican Republic when it comes to human resources and infrastructure. More than three million workers are at investors’ disposal, many of them highly qualified professionals with language skills and recognised for their superior work ethic. A willingness to learn and adaptability to fast-changing situations are two of the workforce’s key cultural assets. Combined with a growing investment in education and multi-skills development, this allows the Dominican Republic to offer the investor a first class workforce in all areas of services and industry.
The country recently established English as its second official language and there are now more than 100,000 professionals and technical personnel trained in language skills. This makes it an ideal place for locating manufacturing facilities, particularly at the high-tech end, such as medical equipment, with an eye on export to the US market to take advantage of lower import duties.
The Dominican Republic’s infrastructure is second to none in the Caribbean. It can boast a first-rate air transport network and about $100m in new foreign investment is going into this area to improve the infrastructure of several international airports, including Samaná, Puerto Plata and Las Américas in Santo Domingo. The government has designed a business model that favours the development of private sector investment in airports, ports and roads, and what it has achieved in terms of modernising the airports can be applied to other infrastructure projects.
There are 13 ports in operation. The newest and most exciting project is the world-class Caucedo megaport, a $300m facility located in the Santo Domingo area, two miles from the international airport. The first phase is a 2000-foot berth with a 46-foot draft that will be followed six to 18 months later by a second berth of approximately 1800 feet.
Cyber park attracts
Many investors are attracted to the Cyber Park of Santo Domingo, which was set up for IT companies, call centres, software development and mechatronics. It is directly connected to the Technology Institute of Las Americas (ITLA) and stands as an example of how the country plans to complement the progress it has made in education with cluster development strategies, allowing for synergies between applied learning and industry.
The park features world-class design and engineering concepts, as well as a highly efficient management team. It offers more than two million square metres of land for development, and excellent telecommunications infrastructure and services providing access to the latest telecoms technology, including fibre optics ring and bandwidth.
The ITLA serves as support for the Cyber Park in the training of personnel in software development and other high-tech areas. It seeks to encourage technology development with a view to enhancing competitive advantages for domestic companies and attracting foreign investment.
The Dominican Republic’s investment offering extends into its thriving and internationally recognised tourism industry. With more than 500km of sunny beaches and crystal clear water, it has built up the largest and most popular tourism complex in the area.
The Tourism Law of 2001 set up a promotion fund, with the objective of accelerating development in rural areas and other places of potential high growth. The emphasis is on high-quality tourism and innovative initiatives, such as the Baseball Theme Park. Companies domiciled in the Dominican Republic that wish to avail themselves of the benefits of this law can enjoy a 10-year tax holiday from the date of completion of a project.
Well over three million visitors enjoyed the country’s hospitality last year and that number is set to grow in 2005. The Dominican Republic is expanding its strategy of promoting sun and sand, to include ecotourism, theme parks, golf holidays, adventure travel, medical tourism and other market niches. Alongside tourism, residential development is booming, as more people take the opportunity to pursue their goals in what can justly be described as a Caribbean paradise.