2024 Regional Roundtable Update: Dominican Republic
2024 Dominican Republic Regional Update
Firm Name: Pellerano Nadal
Authors: Ricardo Pellerano Nadal
1. How is the political environment impacting business in or with your country?
The country's political environment has had a positive impact on business. Unlike other countries in the region, the Dominican Republic has been stable for decades. Stability has allowed the country to benefit from a prolonged economic expansion, diversify its export base, attract foreign investment, and take advantage of its geography to become a regional leader in tourism.
The country’s politics have been generally in the center of the aisle for more than 60 years, with a focus on opening the market, attracting investment, and implementing long-term state policies. The tendency to stick to the center will continue in a few weeks, with President Luis Abinader running for a second four-year term (and will most likely win). He will face former President Leonel Fernández and Abel Martínez, mayor of the country's second-largest city, Santiago. The three top candidates are all on the center-right of the spectrum and represent mainstream parties.
2. Which countries have you previously collaborated with and do you see potential for future collaboration with on cross-border matters within the region?
Due to our location, we have historically worked with the USA, the country's top trading partner, and where most of our foreign direct investment comes from. The country also attracts a lot of investment from Europe, mainly working with Spain and Italy, but also France, Germany, and the UK.
However, during the last decade, we have been working more and more with our Latin American colleagues, particularly Colombia, Panama, Costa Rica, and the rest of Central America, due to regional groups growing towards the Dominican Republic or vice versa.
3. What legislation has recently changed or is changing that a potential international client should be aware of?
Due to its geographical position and closeness to the USA, the Dominican Republic has been focused on selling itself as a nearshoring location for the past few years. It benefits that its closest neighbors (Haiti, Cuba, and Puerto Rico) are not the most suitable nearshoring locations for the US. Therefore, in 2021, a new customs law was enacted to promote nearshoring and, particularly, the concept of a "logistics hub" for the region.
While the concept of nearshoring has been pushed for some time, the pandemic accelerated this transition, leading many companies to move operations, manufacturing, and/or distribution to closer countries to offset high transportation costs and logistical uncertainty. For the past year, the Dominican Republic has also been trying to attract semiconductor investments to the country within the scope of nearshoring.