Dominican Republic Market Entry

Dominican Republic Market Entry
Basic data
Capital Santo Domingo
Population 10.9 million
Language Spanish
Religion Roman Catholic (47.8%), Protestant (21.3%), Atheism (28%), Other (2.9%)
State system presidential republic
Head of State Luis Rodolfo Abinader Corona
Head of government Luis Rodolfo Abinader Corona
Currency name Dominican Peso (DOP)
Travel
Time shift – 6 hours
Economy 2021
Nominal GDP (billion USD) 219.4
Economic growth (%) 12
Inflation (%) 8.2
Unemployment (%) 7

According to cheeroutdoor.com, the Dominican Republic (DR) is a representative democracy with separate executive, legislative and judicial powers. It is a presidential republic, the president is the head of state and government. The president of the country is Luis Rodolfo Abinader Corona representing the Modern Revolutionary Party PRM. The country shows political stability. The DR has experienced significant economic growth in the last two decades, which was only briefly interrupted by the coronavirus pandemic. Between 1993 and 2019, GDP growth averaged 5.3% per year, but in 2020, due to the coronavirus pandemic, GDP fell by 6.6%. However, the DR was able to quickly emerge from the crisis and in 2021 showed economic growth of 12%, which represents one of the highest levels in Latin America and the Caribbean region. The Dominican economy is estimated to grow by 6.1% in 2022. The Dominican economy is closely integrated into the global economy with an external openness coefficient of 35%. It is an economy that depends heavily on international trade, capital flows, remittances and tourism. Services account for more than 60% of GDP, followed by industry at 24% and agriculture at 5.6%. Inflation was around 8% in 2021, unemployment is at the level of 7%. Remittances and tourism are the main engine of the Dominican economy and a significant source of income. A total of 5 million tourists visited the DR in 2021, and up to 7 million are expected in 2022. Due to the favorable economic development, the DR is currently one of the key countries in Latin America for the development of business cooperation. For Czech exporters, DR offers employment mainly in the field of importing traditional Czech food and industrial products and brands, involvement in the development and renewal of energy infrastructure or investments in tourism or healthcare. In order to establish a good relationship with business partners in the Dominican Republic, a good knowledge of Spanish is essential. Formality is expected in business dealings, despite the fact that Dominicans are very welcoming and friendly. Punctuality and maximum professionalism are expected from the foreign partner. Contact with the Dominican side must be maintained regularly, it is recommended if possible in person.

This Summary Territorial Information is processed for a country that is so-called accredited. The information is provided in an abbreviated form.

Basic conditions for the use of Czech goods on the market

Market entry

The Dominican market is very interesting for Czech exporters, despite the fact that it is a relatively small market, both in terms of population and area. The largest source of income for the national economy and the creation of GDP is tourism and related sectors, and especially the communications sector and free zones.

A successful entry into the Dominican market requires a local representative who knows the clientele in the industry as well as the local mentality and customs, which do not differ much from other Latin American countries. A distribution network, organized with the help of a local representative, is necessary for quality market processing.

There is no embassy of the Czech Republic in the DR, and this session is commercially developed on the basis of direct contacts of Czech exporters with Dominican partners, with the participation of some traditional business representatives. Initial contact can be made through the Santo Domingo Chamber of Commerce (https://www.camarasantodomingo.do).

Any importer must comply with Dominican law. For basic orientation, you can find information on the website of the customs office (https://www.aduanas.gob.do/) Foreign investments are governed by Act No. 16-95 of 1995. More information about investments in the DR can be found on the website ProDominicana (https://prodominicana.gob.do).

Forms and conditions of operation on the market

The Dominican market is liberal with an open market environment for business and for foreign investors to enter all sectors of the national economy. Foreign trade is governed by international rules, there are generally no administrative barriers to export or import, except for special material.

The documents usually required for import are: customs declaration, commercial invoice, transport documents, depending on the type of goods, quality certificate, sanitary, phytosanitary, origin of goods, etc. Special conditions apply to the import of goods into free zones. Export control has only a statistical and record-keeping purpose. Importing goods through Dominican customs can be slow and bureaucratic, and customs interpretation can provoke merchant complaints and arbitration. The government introduced the WTO customs valuation method in 2001. A health permit is required to import agricultural products. DR does not have aggressive export promotion schemes thanks to free trade zones.

To register a company, it is necessary to apply for registration in the commercial register, a completed application for registration, articles of association with the name and seat of the company, type of business, amount of capital, owner of the company, etc. is attached, through specialized legal offices. A registration number is then assigned and the business is registered as a local and has identical rights and obligations as any domestic business. The company must also be registered in the register of taxpayers. A foreign investor can establish a branch in the country. The registration of companies interested in activities in the free zone is specific, the permit and registration procedure is carried out by the Consejo Nacional de las Zonas Libres.

The Labor Code of 1992 regulates relations between companies and employees and other labor legal conditions. The conditions for employment of foreigners and local forces do not differ. At least 80% of the employees must be Dominicans, Dominican citizenship is not required for the foreign executives of the companies. Dominican employees have the same rights as foreigners. A normal work week has 44 hours, with 8 hours of work time. However, usually 40 hours are worked per week from Monday to Friday and the remaining 4 hours are usually shifted to Saturday by the company. The working week of part-time employees may not exceed 29 hours. After completing one year of employment, the right to 14 working days of vacation arises.

Marketing and communication

When entering promotional, marketing, advertising, etc. actions, it is recommended to use the services of specialized agencies in the Dominican Republic, which, in cooperation with a local representative, can choose operationally optimal forms of action on the market and the effectiveness of the invested funds for promotion. The following agencies were announced as the best-rated advertising agencies in 2020: 3Lemon, Paurmedia, GrupoAro.

All classic forms of promotion in the business sphere are used for advertising, and mass media are also used to a large extent. The telecommunications industry is at a high level in the DR and works with new modern top technologies, mainly from UDS. Promotional services in the DR are implemented through specialized agencies. Business correspondence must be conducted in Spanish, as a last resort in English, as well as catalogs, prospectuses and other promotional printed and advertising material.

The most watched channels are The are Color Visión (Canal 9), Circuito Independencia and Canal 6. The most read newspaper is Listín Diario. In the Dominican Republic, telecommunications are at a high level, the Internet is commonly available and residents use social networks.

Issues of intellectual property protection

The Dominican Republic strengthened intellectual property protection rights with a reform in 2000 and has relatively broad legislation to protect copyright and industrial property and a regulatory framework to protect patents, trademarks, trade names and industrial designs. By modernizing the commercial legal framework, it fulfills its obligations arising from membership in the WTO (TRIPS – Trade Related Aspects of Intellectual Property).

Article 8 of the Dominican Constitution establishes recognition and protection of property rights to scientific, artistic and literary works as a fundamental human right.

Copyright protection is ensured by Act No. 32-86 on intellectual property rights, which corresponds to the articles of the Universal Convention on Intellectual Property Rights, of which DR is a member. Copyright must be registered at the National Office of Copyright (ONDA). DR ratified the following international agreements in this area, namely in 1886 the Berne Convention for the Protection of Literary and Artistic Works, in 1952.

Universal Copyright Convention, in 1961 Rome Convention for the Protection of Artists, Producers of Phonographic Recordings and Radio Broadcasts, in 1996 WIPO Copyright Agreement and WIPO Performance and Phonogram Productions Agreement.

Public procurement market

Public contracts are awarded on the Dominican market in the form of international and national tenders, issued by line ministries and state institutions on the basis of the Law on Contracting, which primarily requires a transparent process, as well as an objective evaluation of their results. In some fields, the public procurement regime favors national companies that can compete with foreign suppliers on price, meet the technical parameters of announced projects and create new jobs for Dominican workers. Nevertheless, this regime allows foreign companies 50% participation in investment projects in general, and in selected cases where the Dominican supplier is unable to participate the other 50%, the share for foreign companies increases to 70%.

Public contracts are tendered mainly in the construction sector, in the construction and reconstruction of road and railway infrastructure, the communications sector and the mining industry (mining). A Dominican representative firm of a foreign manufacturer or exporter is almost always required to participate in these public procurements. The possibility of obtaining timely information about tenders even before the conditions are published is greatly limited due to the lack of representation of the Czech Republic in the country. A limiting factor is also the fact that the Czech Republic is not a member of the Inter-American Development Bank, which participates to a considerable extent in government development projects of the DR.

Payment terms, payment ethics and resolution of commercial disputes

Payment by irrevocable and confirmed letter of credit opened at a Czech bank in the Czech Republic, or with deferred maturity according to the type of traded goods, is a completely usual and practiced payment condition in the Dominican market. Maximum prudence is recommended when choosing a business partner and providing loans, and therefore a higher form of ensuring foreign exchange return on the realized deliveries of goods and services. For deliveries of investment goods on credit, it is recommended to ensure maturity with a bank guarantee or bank guarantee, payment of an advance payment of 5-30% of the value of the delivery and purchase contracts with a lien until full payment by the importer. Advance payment is recommended for deliveries of perishable or seasonal goods.

The payment morale of Dominican partners is good, however, one must take into account certain features specific to the country’s geographical location, climatic conditions and the resulting mentality, when the quality and, above all, the timeliness of the issued vouchers do not always correspond to the contracted conditions and European customs.

Commercial disputes arising in the framework of supplier-customer relations are resolved by a commercial court, usually by regional chambers of commerce. To solve them, it is necessary to use the services of local law offices authorized to represent foreign and local companies in all commercial disputes.

Visas, fees, specific conditions for traveling to the territory

It is advisable to check the conditions for entering the Dominican Republic at the Embassy of the DR in Vienna, Prinz Eugen Strasse 18/1/33, 1040 Wien, phone +43 1 5058555, [email protected]

Czech citizens do not need a visa to enter for a period not exceeding 120 days (4 months). For stays of more than 30 days, an extension of stay up to 120 days must be requested at the Dirección General de Migración office. Since April 2018, the obligation to purchase a tourist card has ceased to exist, it is already included in the ticket price. When entering the country, it is necessary to inform the immigration officer of the purpose and expected duration of the stay. Money must be changed only in commercial banks and certified exchange offices. When leaving the country, it is not allowed to take more than 10,000 USD in cash or its equivalent in another currency.

Valuables left in a car unattended on a beach or public place can be stolen. Burglaries of private residences are on the rise. Some resorts have seen an increase in muggings. However, large resorts with private security are completely safe.

Taxi service is relatively cheap and safe. A network of reliable and relatively cheap private carriers can be used for transport between cities.

The tourist police is always willing to help in any problems, and in addition to Spanish, they usually speak English as well.

An international driver’s license is required to rent a vehicle.

Employment of citizens from the Czech Republic

Citizens of the Czech Republic who are interested in working in the DR must have a valid work visa and a certificate from the Ministry of Labor of the Dominican Republic stating that the company meets the requirements for recruiting the worker in question.

Dominican Labor Code Article 16-92 specifies how foreigners can be hired. Act No. 285-04 on migration deals, among other things, with the legal situation of foreigners working in the DR.

Fairs and events

A Caribbean tourist exchange (Bolsa Turística del Caribe) is regularly organized in Santo Domingo, which can interest entrepreneurs in tourism for the entire Caribbean region. The Feria Agroalimentaria fair is regularly held in May for entrepreneurs in the food industry and agriculture.

Dominican Republic Market Entry