| Dominican Republic | Feb 04, 2015
The Dominican Republic’s FTZs can be divided into three main categories: • Free Industrial Zones (FIZs) or services FTZs, located in specific non-metropolitan areas. • Border FTZs, located on the […]
The Dominican Republic’s FTZs can be divided into three main categories:
• Free Industrial Zones (FIZs) or services FTZs, located in specific non-metropolitan areas.
• Border FTZs, located on the border with Haiti, which are given special incentives such as: tax exemption for a 20-year period, application of preferential treatment and rates at the time of granting the funds for financing, lower rental rates for facilities, and preferential treatment for goods subject to import quotas in certain countries.
• Special FTZs, located outside Free Trade Zone parks, are enabled only in cases when their nature requires exploitation of immovable resources, for which processing would be difficult if not located near the sources of raw materials.
Foreign companies, investing in the Dominican Republic do not require a local partner, and their investments are not restricted in terms of participation in the organization’s capital, except for a few sectors, such as air transport and broadcasting.
The Dominican Republic’s FTZs are regulated by Law 8-90, enacted on January 15, 1990, which aims is to promote the establishment of new zones and further growth of the existing ones, and the corresponding regulations of Decree No. 366.97, issued on August 29, 1997. The official authority responsible for ensuring the correct application of Law 8-90 is the National Export Free Zone Council (CNZFE).
As part of its international integration strategy, the Dominican Republic has negotiated several bilateral and regional trade agreements, such as Partial Scope Agreement with Panama, the Free Trade Agreement between the Dominican Republic, Central America, and the US (DR-CAFTA), and the Economic Partnership Agreement between the EU and CARIFORUM (CARICOM and the Dominican Republic), which have been a key factor in FTZ sector development.
Registration of exporters in the Dominican Republic is not compulsory, however, as stated in Law No. 84-99 on boosting and promoting exports, exporters who wish to benefit from the incentives afforded by this Law must request their classification and registration license from The Centre for Export and Investment of the Dominican Republic (CEI-RD). Additionally, all export transactions in the Dominican Republic, including the ones from FTZs, require the submission of the Single Customs Declaration for the Dominican Republic (DUA) to the Dominican Republic’s Directorate-General of Customs (DGA).
Several manufacturing firms established in the Dominican FTZ have voluntary codes of conduct including worker rights protection clauses aligned with the International Labor Organization (ILO). Article 41 of Law 8-90 states that “operators and enterprises installed in the Free Zone under the protection of this Law, should obey all the laws, rules and current dispositions of the Work Code and labor laws. Likewise, they should satisfy the established duties stipulated by Social Insurance Law No. 116, which creates the National Institute for Technical Professional Education (INFOTEP), the international agreements subscribed to and rectified by the Dominican government and the Sanitary Laws for the industrial infrastructures.” Additionally, companies established is the Dominican Republic’s FTZs pay 1% of their monthly payrolls to INFOTEP. This obligation is imposed on FTZ-based companies in Article 41 of Law 8-90, under which these companies are also subject to all work and social security related matters such as: work contracts, work conditions, labor unions, economic conflicts, strikes, remuneration, and collateral benefits.