A range of UK businesses currently operate out of the Dominican, including AEI Energy, BT, Aggreko International, Bupa International, Diageo, Ernst & Young, Pinewood Studios and Unilever – if you want to set up out there, here are a few things you need to consider…<\/p>\n
The pros and cons of doing business in the Dominican Republic<\/h2>\n
There are a number of UK businesses operating out of the Dominican Republic, including big names like BT, Diageo, Ernst & Young, Pinewood Studios and Unilever. The benefits of exporting to this part of the Caribbean include:<\/p>\n
- \n
- low wage costs<\/li>\n
- English widely spoken as a business language<\/li>\n
- strong legal framework<\/li>\n
- direct flights from UK to Punta Cana and routes via Paris, Madrid or the US into Santo Domingo<\/li>\n
- free trade agreement with the European Union (EU<\/abbr>)<\/li>\n
- no exchange controls<\/li>\n
- open economy with strong appetite for imported goods and technology<\/li>\n
- stable political environment<\/li>\n
- currency stability<\/li>\n
- modern transportation infrastructure<\/li>\n
- advanced and reliable telecommunications infrastructure<\/li>\n<\/ul>\n
It’s not without it’s challenges though, including:<\/p>\n
- \n
- scores 123rd on Transparency International\u2019s Perceptions of Corruption Index<\/a><\/li>\n
- bureaucracy<\/li>\n
- energy crisis which could affect operations<\/li>\n<\/ul>\n
The UK is currently the sixth largest foreign investor in the Dominican Republic, with exports worth almost \u00a380 million in 2014, a year-on-year increase of \u00a310 million.<\/p>\n
The top five exports from the UK to the Dominican Republic are:<\/p>\n
- \n
- beverages (mainly whisky)<\/li>\n
- books, newspapers, pictures and other products of the printing industry<\/li>\n
- road vehicles (including air cushion vehicles)<\/li>\n
- boilers, machinery and mechanical appliances<\/li>\n
- glass and glassware<\/li>\n<\/ul>\nIf you\u2019re doing business in the Dominican Republic, you\u2019ll need a reliable and cost-effective teleconference<\/a>\u00a0provider to help keep in touch when travelling isn\u2019t an option. Here\u2019s\u00a0How to set up a conference call between the UK and the Dominican Republic<\/a>.<\/em><\/div>\n\n
And remember, you can now screen share and video conference, using Crankwheel<\/a>.<\/p>\n
Tax and customs<\/h2>\n
Tax<\/h3>\n
Taxes and other mandatory contributions in the Dominican Republic are applied equally and at the same rates to both local and foreign investors.<\/p>\n
- \n
- VAT\u00a0<\/strong>(known as ITBIS) – charged at 18%. Goods and services that are exempt from ITBIS include basic foods, medicines, fuel and books.<\/li>\n
- Corporation tax<\/strong> – charged at 27% of taxable profit, and local corporations are also taxed on incomes from both the Dominican and abroad, including foreign investments and financial gains.<\/li>\n
- Asset and withholding tax<\/strong> – If your assets amount to more than RD$ 700 million (about GBP 114) an annual tax of 1% of the total will be levied, but can be credited against corporation tax. Dividends are subject to 10% withholding tax.<\/li>\n
- Selective consumption tax (ISC)<\/strong> –\u00a0applied on the purchase price or import of certain goods. The rate of ISC tax varies according to the item being taxed.<\/li>\n<\/ul>\n
Social Security must be paid for employees.<\/p>\n
Customs<\/h3>\n<\/div>\n
For countries belonging to the WTO, The customs office of the Dominican Republic uses the\u00a0General Agreement on Tariffs and Trade<\/a>\u00a0(GATT) for any countries belonging to the World Trade Organisation, which uses the value of the goods including Insurance and Freight (CIF) listed on the commercial invoice. Find out more about import tariffs at\u00a0Market Access Database<\/a>\u00a0(MADB).<\/p>\n
There are currently 53 Industrial Parks, housing over 500 companies in the Dominican Republic, and a law encouraging the establishment and growth of free zones means they are exempt from various taxes. For more information, take a look at\u00a0Law 8-90<\/a>.<\/p>\n
- Corporation tax<\/strong> – charged at 27% of taxable profit, and local corporations are also taxed on incomes from both the Dominican and abroad, including foreign investments and financial gains.<\/li>\n
- VAT\u00a0<\/strong>(known as ITBIS) – charged at 18%. Goods and services that are exempt from ITBIS include basic foods, medicines, fuel and books.<\/li>\n
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