Guidance

Overseas business risk: Dominican Republic

Updated 17 February 2021

Information on key security and political risks which UK businesses may face when operating in Dominican Republic.

1. Political and economic

1.1 Political

The Dominican Republic (DR) is a representative democracy with national powers divided among Executive, Legislative, and Judicial branches. The President appoints the Cabinet and Attorney General, enacts laws passed by the legislative branch and is Commander in Chief of the Armed Forces.

The President and Vice President run for office on the same ticket and are elected by direct vote for 4-year terms. Legislative power is exercised by a bicameral Congress – the Senate (32 members) and the House of Representatives (190 members). Municipal authorities are also elected for the same period and in the same elections. State governors are appointed by the President.

The DR has a multi-party political system but in the last 19 years two parties have dominated the political scene: the Partido de la Liberación Dominicana (PLD) and the Partido Revolucionario Dominicano (PRD).After political divisions within the PRD, a new party, the Partido Revolucionario Moderno (PRM) was formed in 2015.

International observers have found that elections since 1996 have been generally free and fair, but not totally without incidents of corruption. Elections are organised by a Central Elections Committee (JCE), with 5 presiding members appointed by the Senate. Legislation relating to political parties and financing, corruption and related laws are yet to be approved by Congress.

Since August 2020, the President of the Dominican Republic has been Luis Abinader and the Vice President is Raquel Peña, both of the PRM.

1.2 Judicial

The court system in the Dominican Republic is divided territorially into Judicial Departments and Judicial Districts. The Supreme Court of Justice is the highest jurisdictional authority in the Judicial Branch and has nationwide jurisdiction. It holds exclusive jurisdiction for criminal actions against highest-ranked members of public, diplomatic and judicial officers, as determined by the Constitution of the Dominican Republic, and it functions as a cassation court to review the application of the law by lower courts.

There are 11 Judicial Departments, and each Department has a Court of Appeals that may be divided in chambers by areas of law (civil and commercial chamber, criminal chamber, for labour matters, infants and adolescent matters), or have plenary jurisdiction. In 2010, the Constitutional Court was created to handle cases that allegedly contravene the Constitution. This might include Supreme Court of Justice decisions.

There is also a Judicial Council composed of members of all levels of the judiciary, with powers to nominate and oversee performance of lower court judges. This Council is a permanent organ of administration and discipline of the Judicial Power.

Justice is administered freely, in the name of the Republic, by the Judicial Power. The most common types of litigation encountered by foreign entities are employment claims and claims for breach of contract. The Constitution and the Civil Code recognise the same rights and remedies to foreign entities as national entities. The judicial system in the Dominican Republic can be slow, complicated and expensive.

1.3 Economic

The Dominican Republic is the largest economy in the Caribbean and Central American region with a total nominal GDP of USD 88.94 billion (2019). With a population of 10.74 million, distribution of income is highly unequal. The economy maintained its rapid expansion in the years leading up to the COVID-19 pandemic; between 2015 and 2019, the annual growth rate of the Dominican GDP averaged 6.1 percent.

Tourism (the leading foreign exchange earner), mining, financial services, agricultural business, construction, and free-trade-zone manufacturing are the most important sectors. The country is highly dependent on the US, both in terms of exports and imports, as well as remittances from the considerable Dominican diaspora. In 2019, the country was on track to meet the goal of reaching high-income status by 2030.

However, the global impact of the COVID-19 pandemic significantly affected the economy of the Dominican Republic, causing a sharp contraction in all critical sectors, such as tourism, construction and mining in the second quarter of 2020.

he Dominican Republic is a founding member of the WTO. It is also a signatory of the Cariforum-UK Economic Partnership Agreement. Furthermore, the DR has a Free Trade Agreement with Central America and the United States of America (DR-CAFTA) and is party to the Economic Partnership Agreement between CARICOM & Dominican Republic and the European Union. In addition, the country has a partial international treaty with Panama.

The Dominican Republic is one of the largest recipients of FDI in the Caribbean and Central America. FDI represents roughly 3.2% of the GDP and continues to be a primary source of foreign exchange. Despite the effects of the pandemic the DR was still able to bring in over US$ 2 billion in FDI for 2020. The US, Canada, Mexico and Spain are the largest investors. The main sectors of investments for UK companies are consumer goods, security, creative industries, telecommunications and pharmaceuticals. The Dominican Republic and the UK do not have a Bilateral Investment Treaty.

2. Human Rights and business

The Dominican Republic operates under the rule of law and has Human Rights legislature in place to safeguard the rights of its citizens. However, there are issues regarding the implementation of these rights across the country.

President Abinader has consistently reiterated his commitment to protecting human rights. Since taking office, he has successfully banned child marriage, in a country where 12% of girls marry by the age of 15, and signed the Declaration of Chapultepec and Salta in defence of media freedom.

LGBT persons in the Dominican Republic do not enjoy the same rights as non-LGBT residents in the country and may encounter legal and social challenges. While the Dominican Criminal Code does not expressly prohibit homosexuality, it does not address discrimination or harassment on account of sexual orientation or gender identity, except for a few legal instruments that prohibit discrimination in very specific cases. The constitution only recognizes heterosexual marriage.

The law provides for the freedom to organise labour unions; all workers, except the military and the police, are free to form and join unions of their choice, although in practice this is unevenly applied depending on the sector in question.

3. Terrorism threat

Please consult the information provided on our terrorism page.

4. Bribery and corruption

Bribery is illegal. It is an offence for a British national or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership to bribe anywhere in the world.

In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a British national or resident in the UK or a body incorporated or formed in the UK. In this case, it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

Dominican law penalises corruption; nonetheless the World Bank has confirmed that there is an existing problem with institutionalised corruption. In 2019, the World Economic Forum ranked the Dominican Republic as 110 of 141 countries for incidences of corruption.

Current President Abinader ran on a platform of anti-corruption and human rights. Since taking office in August 2020, he has empowered his independent prosecutors to pursue corruption cases, and taken concrete action, including the suspension of officials who do not declare their assets and tackling the issue of “ghost” roles in the public sector (i.e. instances where salaries are drawn without actually doing the job).

Individuals in the Dominican Republic were also implicated in the ongoing Lava Jato investigation in Brazil into the alleged payment of bribes by Brazilian firm Odebrecht to officials in exchange for securing contracts for large infrastructure projects. Officials in the Dominican Republic were alleged to have received US$ 92 million for contracts for the Piedra Blanca-Cruce de Ocoa Highway and the Punta Catalina coal power station. The Dominican Attorney General has been working with Brazilian authorities to investigate the reports and to identify those responsible. In 2020, under the new Abinader administration, the Odebrecht trials have resumed.

Please consult the information provided on our Bribery and Corruption Page

5. Copyright and Intellectual Property

The Copyrights Law and Industrial Property Law have been amended in order to comply with the Central American - Dominican Republic Free Trade Agreement (CAFTA-DR), which is a free trade agreement between the United States and a group of smaller developing economies. Other international legislations applicable are the Treaty on Patent-Related cooperation; The Budapest Treaty on the International Recognition of the Deposit of Microorganism for the purposes of Patent Procedure; the International Convention for the protection of New Varieties of Plants (UPOV); the Berne Convention; and the Universal Copyright Convention.

The 2010 Constitution reconfirmed the right to Intellectual Property. Law 20-00 of 8 May 2000 on Industrial Property grants protection to Patents (for products and procedures and at the same time linkage and data exclusivity protection is also provided) and Distinctive Signs among other titles. Several regulations have been enacted in connection to enforcement. Law 65-00 regulates Authorship/Copyright and related aspects.

The Government body in charge of granting patents and registering distinctive signs and patents is the National Office of Industrial Property (Oficina Nacional de Propiedad Industrial, ONAPI). The National Office of Author’s Right/Copyright (Oficina Nacional de Derecho de Autor ONDA) is the other Government body in charge of intellectual rights.

Civil and criminal sanctions may be applicable in case of violations to the industrial property rights and include compensation, as well as fines and/or prison. Despite the legal framework, international pharmaceutical companies continue to complain about serious counterfeiting and breach of intellectual property laws.

6. Organised crime and Protective Security Advice

Please consult the information provided on our organised crime and Protective Security page.

Sources: US Embassy, World Bank, the International Monetary Fund, the United Nations, Central Bank of the Dominican Republic, UN Human Rights Report, Transparency International, Jimenez Cruz Peña Attorneys, National Statistics Department.

7. Contact

Contact the Department for Business and Trade (DBT) team in the Dominican Republic for further information.