As we continue to address the historic mortgage issues which face thousands of foreign property owners in the UK, we have in recent days successfully settled another French mortgage issue for one of our clients. After many years of worry and anxiety for our...
Dominican Republic - the country
The Dominican Republic is strategically located at the centre of the Caribbean, between Cuba and Puerto Rico, on the eastern two thirds of the island of Hispaniola; the western third is occupied by Haiti. It is the second-largest nation in the region (after Cuba), with 48,445 square kilometres (18,705 square miles), approximately the same size as the combined area of the states of Vermont and New Hampshire in the United States, and slightly larger than Switzerland.
For a small nation, the Dominican Republic exhibits exceptional geographical diversity. It is home to the highest peak in the Caribbean (Pico Duarte at 3,098 meters or 10,417 feet), its lowest elevation (Lake Enriquillo at 45 meters or 374 feet below sea level), rugged mountain chains, fertile valleys, semi-deserts, and about 1600 kilometres (1000 miles) of coastline and beaches.
Due to this diverse topography, its climate is the most varied in the region. The annual average temperature is 25 °C (77 °F). At higher elevations the temperature averages 18 °C (64.4 °F) while near sea level the average temperature is 28 °C (82.4 °F). Low temperatures below 0 °C (32 °F) have been recorded in the central mountains. January and February are the coolest months of the year; August, the hottest.
The Dominican Republic has a total population of 10.7 million people, of which about 75% live in urban areas. Racially, Dominicans are predominantly of mixed origin (73%), with sizeable white (16%) and black (11%) minorities. Recent genealogical DNA testing has shown that the overall genetic pool of the Dominican Republic is 49% Sub-Saharan African, 39% European, and 4% Native American.
The largest population centres in the country are Santo Domingo de Guzmán (the Dominican capital and the largest city in the Caribbean and Central American region, with a population of three million), Santiago, La Romana, San Pedro de Macorís, Higüey, San Francisco de Macorís, Puerto Plata and La Vega.
The Dominican Legal System
The Dominican Republic is a representative democracy, with three branches of government, each with separate and independent powers and areas of responsibility: a legislature, an executive, and a judiciary. For administrative purposes, the country is divided into 31 provinces and a National District (the capital of Santo Domingo). The provinces are divided into 124 municipalities and municipal districts.
The legislature or National Congress is bicameral, composed of a Senate and a Chamber of Deputies. The Senate has 32 members, elected by simple majority vote, one for each province ant the National District. The Chamber of Deputies has 190 members, elected directly in multi-seat constituencies by proportional representation vote. Both senators and deputies serve four-year terms and may be re-elected for additional terms.
The Dominican Republic has a civil law system based on the French Napoleonic Codes composed of the Civil, Criminal, Civil Procedure and the Commercial Code. Although the most recent statutory law (Criminal Procedure, Corporate, Trusts, etc.) is based on codes and statutes from different jurisdictions (Latin America and Europe), French jurisprudence and case law still plays an important role in the interpretation and application of the law. The Dominican constitution from 2010 establishes a general guarantee for foreigners to be treated equally to Dominican citizens. Therefore, any foreign investor has the same rights as any Dominican citizen to acquire real estate or to engage in business activities and is taxed equally.
The country has a formal written Constitution which was enacted in 1844 but has had a number of amendments to it since then.
A Receptive Environment for Investors
During the last two decades, the Dominican Republic has sought to foster a highly receptive environment for international investors, adopting policies that minimise regulatory obstacles and, at the same time, provide assistance and incentives to foreign companies and individuals to bring capital into the country. As a result, the Dominican Republic has become the number one recipient of foreign direct investment in the region: 24 billion dollars’ worth from 2006 to 2016.
Equal Treatment
The Dominican Constitution accords foreign and local investors equal treatment under the law, stating expressly that foreigners in the Dominican Republic are entitled to the same rights as Dominican nationals, except for participating in local political activities. At the same time, foreign investors are bound by the same rules and regulations applicable to local investors. Foreign investors can freely hold equity in local businesses and joint ventures, as well as buy real estate in their names.
Legal Framework
Foreign Investment Law 16-95, enacted on November 20, 1995, and its enabling regulations, eliminated all barriers formerly imposed on international investments in the Dominican Republic. Investors contributing capital to companies operating in the Dominican Republic are granted unlimited access to all sectors of the Dominican economy, except to those related to national security and certain sensitive industries. Registration of foreign investments is optional, and no government approval is required for the repatriation of profits.