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reference section. To see the complete list of
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Geography,
Size
Climate
and Location Where is the Dominican
Republic ~ How many
People live there ~
What is the country like?
Money
& Currency
About the Dominican
Peso & The Central
Bank of the Dominican
Republic
History
and Culture
Learn about Domincan
History ~ Some facts and interesting
things about
the country's history ~
Did you know that
Santo Domingo was
the first European
Settlement in the New
World?
Government
& Politics
Structure of the
Government ~ The
Legislature and other branches of
the
government
The
Legal System &
Dominican
Courts
A review of the nation's
legal and courts system
The
Economy of
The
Dominican
Republic
Information about the
economy ~ Industries
and growth sectors
Trade,
Imports, Exports and Duty
Information
A quick reference guide
regarding Imports & Exports
information
About
Free Zone
Manufacturing
Some general information about setting
up operations in one of the duty free trade or manufacturing zones
The
Regions, Cities and Towns
A listing of the regions, cities
and different towns in the country
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Many
of our consulting clients have expressed an interest in establishing a
service or manufacturing facility in one of the many free zone compounds
located within The Dominican Republic. To answer some common questions
about this, we have prepared this summary information.
What Exactly is
a "Free Zone" ?
A Free Zone is an area or section that
the government has established in order to encourage foreign business to
create new facilities or operations. In most cases, Free Zones are
most attractive to those companies involved in assembly or light manufacturing.
However, many service oriented companies are also finding that a call center
or order processing operation can enjoy tremendous tax and other advantages
as well.
Some of the most common characteristics
of a Free Zone are:
-
Reduced or Zero Import / Export Tariffs
or Duties
-
Reduced or Zero Taxes on profits paid to
the government hosting the free zone
-
Relaxed regulations and restrictions
-
Lower labor and other costs than may be
found in the manufacturer's present place of business
-
Convenient access to transportation and
shipping facilities
There are a few countries offering these
type of Duty-Free business zones. The real question is - Why the
Dominican Republic?
The Dominican Republic is probably one
of the most progressive and best locations for any company seeking a location
to do business with minimum taxes and very reasonable labor costs.
It's proximity to the United States, special trade agreements with the
US, and special trade agreements with the European Union that offer little
or zero export duties for goods distributed in the European market ~ make
it an ideal location. The fact that the Dominican Republic has been ranked
as number four in the world with respect to number of free zone facilities,
is testament to the fact it has become a favored domicile for business.
Some advantages a company would receive
if it established operations in one of the Dominican Republic's Free Zones
include: EXEMPTION
from the following duties or taxes for a renewable 15 year period (starting
on the first day of production):
-
Corporate Income Taxes
-
Incorporation and Capital Increase Taxes
-
Municipal Taxes and Export Duties
-
Taxes on title transfer of real property,
construction and mortgages
-
Business taxes, included VAT
In addition, a company may import the following
free of any import duties:
-
Equipment and materials used to establish
and operate the company
-
Trucks and other vehicles, vans and buses
the company may wish to bring for worker transportation
-
Materials or equipment brought in to provide
special health care, cafeterias or child care facilities for workers
Companies may also sell up to 20% of their
production within the Dominican Republic if the goods and services are
produced within the country or imported by law (see law decree 8-90 for
additional details).
Costs for companies doing business in
the Dominican Republic's Free Zones (1997 Figures):
-
Leasing of Space ~ US $3.00 to $ 5.00 per
square foot of leased space in private free zone parks, US $ 1.50 to
US $ 2.75 per square foot for government owned free zone compounds
-
Electricity ~ US $ .18 per kilowatt/hour
(average)
-
Garbage Collection ~ US 25 cents per square
foot
-
Labor ~ The fixed minimum wage set by the
government for free zone workers is RD $1,932.00 Dominican Pesos monthly
or US $ 122.00 per month based on an exchange rate of 15.80 pesos to the
dollar
This is just a general highlight of the
benefits involved in establishing free zone operations. The government
has additional and more attractive incentives for zones or operations located
in certain parts of the country. One example is a 20 year exemption on
the taxes or duties mentioned above, plus many more additional benefits.
This Information has been prepared and
compiled by Mr. John Schroder as a service to his clients. Mr. Schroder
maintains an office in Santo Domingo and in Panama. His firm provides
assistance with company incorporations
in the Dominican Republic, Offshore incorporations in other tax haven jurisdictions,
Residency in the Dominican Republic and Panama, Assistance with Banking
and Investments, Real Estate matters and company representation. To contact
his firm, please click below:
Click
Here to Send an Email
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