Dominican Free Zones: Advantages of Their Operations Under Law No. 8-90

 

The Dominican Republic has developed a solid legal and economic infrastructure to support free zones, which represent a cornerstone of economic growth and job creation in the country. Regulated primarily by Law No. 8-90 on the Promotion of Export Free Zones, these areas have proven to be an effective tool for attracting foreign direct investment and promoting the export of goods and services. In this article, we explore the main operational advantages of these zones, highlighting the benefits offered by Law 8-90 and their appeal to both national and international companies.

 

I. Tax Exemptions and Benefits

One of the main attractions of Dominican free zones is the fiscal incentives provided by Law 8-90. This law allows companies operating in these areas to benefit from tax exemptions that enhance their competitiveness. Key benefits include:

• Income Tax Exemption: Companies in free zones are exempt from income tax payments, significantly improving profitability.
• Customs Duties Exemption: Goods and raw materials imported for production or transformation in free zones are exempt from duties, enabling companies to reduce production costs.
• Exemption from Asset Taxes and Other Local Levies: Free zones enjoy exemptions from asset taxes and other municipal and national taxes that typically apply outside these areas.

These exemptions create an attractive fiscal environment for businesses, encouraging their continued presence and increased investment in the country.

 

II. Access to International Markets

The Dominican Republic benefits from trade agreements such as DR-CAFTA, which facilitates access for Dominican products to key markets like the United States. Combined with the country’s strategic geographic location, this makes free zones a commercial hub linking North America and Europe. For companies seeking market expansion, operating in a Dominican free zone allows them to leverage export advantages without the additional costs and barriers commonly encountered in other territories.

 

III. Infrastructure and Services

Dominican free zones are equipped with top-tier infrastructure specifically designed to support the operations of companies across various sectors, including manufacturing, technology, textiles, and pharmaceuticals. Key features include:

• Industrial Parks with Quality Facilities: The Dominican Republic boasts over 80 free zone parks offering modern and secure facilities for companies in diverse industries.
• Logistics and Transportation Services: Proximity to ports and airports facilitates the transportation and export of goods, ensuring an efficient supply chain.
• Access to Skilled Human Resources: Free zones employ a significant number of workers and contribute to workforce training and skill development. This ensures companies have access to trained talent with experience in key industries.

 

IV. Job Creation and Economic Development

Free zones are among the largest sources of formal employment in the country, significantly contributing to economic and social development. Thanks to Law 8-90, the sector has experienced steady growth, providing stable jobs and training opportunities for thousands of Dominicans. This benefits not only the workers but also their communities, driving regional economic growth and improving the quality of life for many Dominican families.

 

V. Innovation and Technology Transfer

Dominican free zones are designed to promote technology transfer and the development of local capabilities. Multinational companies established in the country bring technological innovations and best practices that benefit local industries. Law 8-90 encourages these synergies and collaborations, exposing local talent to advanced technologies and cutting-edge production methods. This increases the country’s competitiveness on the international stage.

 

Conclusion

Dominican free zones, under the framework of Law No. 8-90, have solidified their position as a key component of the national economy. The combination of tax benefits, modern infrastructure, access to international markets, and job creation makes these zones an attractive option for companies seeking to expand in the Caribbean and Latin America. Beyond being a tool for economic development, free zones also strengthen the Dominican Republic’s position as a reliable destination for investment and innovation.