Tourism in the Dominican Republic - a legal guide - Pellerano ...

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Foreign investment Net capital flows have increased from US$ 200 million in 1996 to US$ 684 million in 1999, as a result of the growing trend of FDI flows into the economy that reduced the impact of the current account deficit and allowed the growth of international reserves. In 1998 FDI flows reached US$ 691 million, an increase of US$ 270 million in relation to the year before. In 1999 foreign investment reached the record amount of US$ 1.4 billion, as a result of the investments related to the privatization process, which represented a 99% increase in relation to 1998. For the year 2000, since the privatization rhythm had slowed down, FDI reached US$ 850 million. In 2001, a year when FDI flows in Latin America went down by 10%, FDI in Dominican Republic increased by 25.8%. 10 8 6 4 2 0 8 7.8 5.1 3.9 Sources: Central Bank / The Economist During the last years, FDI has been mainly directed to industrial sectors like free zones, as well as tourism. However, the privatization process attracted foreign investment to the energy, airport, sugar and domestic manufacture sectors. According to Central Bank data, during last the six years industrialists from Canada, the United States and Spain, have contributed 84% of the direct foreign investment made in the Dominican Republic. International trade GDP Growth 1999-2004 (%) 2.7 0.4 4 2.4 International trade plays a key role in the Dominican economy. Imported components are estimated to account for 60% of the value of the goods consumed in the local market, while exports have increased considerably in the last years mainly through the development of free zones. 4.3 2.3 1999 2000 2001 2002 2003 2004 5 3.8 DR Latin America PELLERANO & HERRERA ATTORNEYS AT LAW The country imports products from all over the world, but close to 40% comes from the United States. The most usual imports include gas, oil, wheat, soya beans, etc. Many raw materials are imported for assembly and then re-exported. These products include textiles, shoes, medical equipment, etc. As to exports, the preferential export rights enjoyed by the Dominican nation to enter the United States (CBPTA, GSP) and European (Cotonou Agreement) markets, together with the process of regional integration undertaken by the Dominican Republic, have largely contributed to the development of the external sector and offer a wide range of export opportunities. National and free zone exports have been a very important sector for the Dominican Republic. Traditional exports include sugar, molasses, syrup, green coffee, tobacco and cacao. However, free zones are the main source of exports such as garments, shoes, electrical components, medicines and foods. The country also exports minerals such as gold, tin, silver and copper. During the year 2000 exports increased by 14.3%. Traditional exports suffered a reduction of 18.75%, as a result of low international prices, while non-traditional exports increased by 10.10%. Mineral exports increased by 33.83% mainly resulting from the increasing international demand of ferronickel and limestone. In the year 2001, exports were affected by the international economic recession and decreased by 7%. Free zone exports went down by 4.9%, while other exports dropped by 17.7%. In this reduction had a big influence the reduction of ferronickel exports (38.8%) due to the drop in international prices. Coffee and tobacco exports went down by 12.6%. On the contrary, cacao exports increased by 63.6%, while sugar exports stayed at similar levels than the previous year. The main destinations for exports were United States of America, Puerto Rico, Haiti, Belgium and Luxembourg, South Korea, The Netherlands, Canada, United Kingdom, Spain, Italy and Cuba. PROCESS OF LEGAL MODERNIZATION AND TRADE LIBERALIZATION The Dominican Republic has not been left untouched by the globalization, and since the year 1991 has been involved in a reform process oriented towards the modernization of the legal and economic framework under which businesses operate in the country, with the view of adapting its economy to the new competitive 13
Legal Guide of Tourism in the Dominican Republic 14 standards, accelerating its insertion within global and regional economic groups, and promoting the flow of foreign capital. New tax, labor and customs code were adopted, but the turning legal point for the liberalization of the Dominican economy was undoubtedly the passing of Law 16-95 on Foreign Investment, which eliminated all restrictions to foreign investment, and marked the beginning of many other significant reforms. The Dominican Republic was behind schedule in implementing some important reforms, but during the last three years, the legislative train has accelerated and many areas have been subject to comprehensive or partial reforms that have enhanced the competitiveness of the Dominican economy, and provided the institutional basis for its development. The main comprehensive reforms carried out during the last three years include a telecommunications law, a stock market law, an industrial property law, a copyright law, a law for export promotion, an environmental law, a tax and customs reform, an electricity law and a monetary and banking reform. The liberalization trend has not however been the sole concern and, especially in the last two years, social reform has also had an important place in the legislative agenda, which has been involved in the passing of laws in the fields of education, civil rights protection and health. In this regard, one of the most important reforms was the new social security law, which modernized and expanded the social security system in the country. On the other hand, the Dominican Republic has been making efforts to widen its trade relations with, and join the different economic groups of the region, having become one of the most dynamic and innovative countries within the process of regional integration in the area. These efforts have already produced concrete results, mainly noticeable in the signature of free trade agreements with Central America and CARICOM, which entered into effect last year. Finally, it should be noted that as member of the World Trade Organization (WTO), one of the main objectives of the reform program executed by the country is to adapt its legal and economic framework to WTO postulates, so as to ensure its participation within the process of economic globalization that is taking place throughout the world.
Page 2: PELLERANO & HERRERA ATTORNEYS AT LA
Page 6 and 7: INDEX DOMINICAN REPUBLIC: CULTURAL,
Page 10 and 11: Geography Dominican Republic: Cultu
Page 12 and 13: participation. All poverty indicato
Page 16 and 17: Tourist attractions TOURIST OFFER T
Page 18 and 19: However, in the last years hotel of
Page 20 and 21: At the end of the sixties, the drop
Page 22 and 23: Incentives An incentive policy adop
Page 24 and 25: that may be needed for the developm
Page 26 and 27: c) To comply strictly with the rese
Page 28 and 29: FINANCIAL AND LEGAL FRAMEWORK OF TO
Page 30 and 31: When all or part of the shares are
Page 32 and 33: companies. Individuals benefit from
Page 34 and 35: Tourist projects that require envir
Page 36 and 37: technology, as established in Law 1
Page 38 and 39: SCOPE OF APPLICATION As it will be
Page 40 and 41: • To evaluate requests and issue
Page 42 and 43: SAFEGUARDS OF ENVIRONMENTAL PROTECT
Page 44 and 45: Gross Domestic Product (in million
Page 46 and 47: NATIONALITY TOTAL NORTH AMERICA Uni

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