What does foreign investment consist of?
They are the contributions from abroad, owned by foreigners or nationals residing
abroad, to the capital of a company that operates in the national territory.
What are the forms of foreign investment?
- Contributions in freely convertible currency, exchanged in a duly authorized financial institution;
- In kind contributions, such as industrial plants, new and reconditioned machinery, new and reconditioned equipment, spare parts, parts and pieces, raw materials, intermediate products and final goods, as well as intangible technological contributions (brands, patents, technical assistance, managerial assistance and of franchises);
- The financial instruments to which the Monetary Board attributes the category of foreign investment, except those that are the product of contributions or internment of a conversion operation of Dominican external debt.
To which items could the foreign investment be destined?
- To investments in the capital of a Dominican company, including the establishment of branches. In this case, the investment must be represented in registered shares.
- To investments of real estate located in the Dominican Republic.
- To investments intended for the acquisition of financial assets, in accordance with the general regulations issued on the matter by the monetary authorities.
Should the investment be registered?
The foreign investor can present to ProDominicana his or her request for investment registration, accompanied by the information required for the issuance of the registration certificate.
Must know: The registration of the foreign investment entails a cost set by ProDominicana determined based on the amount of the investment made.
The registration of the investment in ProDominicana is not mandatory, this is done rather for statistical and protocol purposes. However, some processes do require it, such as obtaining residence due to foreign investment.
What is the capital repatriation treatment?
- The foreign investor will have the right to send the total amount of the invested capital, as well as the fees, royalties, and net dividends declared during the fiscal year, once the local fiscal requirements have been met, without the need for prior authorization.
- The foreign investor may remit abroad an amount of profits that exceeds the benefits corresponding to his investment, as well as repatriate his capital when he sells his shares, participations or rights, to national or foreign investors, or when the liquidation of the investment in the company in which he had made his investment, provided that he has complied with his tax obligations.
- Investors who have their foreign investment registered will have to contact Pro Dominicana within sixty (60) days after the repatriation is made, to update the corresponding records.
What are the benefits of the foreign investment law?
- favorable business environment
- national treatment – equal and non-discriminatory between nationals and foreigners (not onl natural person but also legal entity)
- free repatriation of capital
- registration certificate – which guarantees the validity and transparency of your investment
- residence permit for investment
For foreigners with a residence permit:
- Exemption from taxes and tariffs on the importation of trousseau and household goods
- Partial tax exemption for importing vehicles (if you buy in the local market, ITBIS, ISC exemption)
For foreign source pensioners, in addition:
- Partial exemption from transfer, mortgage and capital gains tax in some cases dividend taxes
