Dominican Republic: a fully developing country that offers opportunities for investment, tax incentives, peace, beauty, and much more – and where you will receive a warm welcome!

TOURISM INVESTMENT

GUIDE

Ministerio de Turismo

2 3

Isla Saona

Isla Beata

Atlantic Ocean

Hato Mayor

Higüey

Barahona

Bonao

Puerto Plata

Santiago

Montecristi

Nagua

Jarabacoa

Constanza

BocaChica

Punta Cana

Miches

Bahía deSamaná Cayo

Levantado

Río SanJuan

CabareteSosúa

Luperón

Parque NacionalIsla Cabritos

Oviedo

Laguna de Oviedo

Cabo Rojo

Parque NacionalSierra de Bahoruco

Jaragua

J. ArmandoBermúdez

José del Carmen Ramírez

Los Haitises

Bahía deManzanillo

Pico Duarte

San Pedro De Macorís

Monte Plata

Salto El Limón

Cabo Francés

Viejo

Damajagua

Cayo Arena (Paraíso)

Estero Hondo

La Vega

Laguna Rincón de Cabral

Loma QuitaEspuela

El Choco

Samaná

Laguna Limón

Lagunas Redonda y Limón

Hoyo dePelempito

Polo Magnético

El Seibo

Cabo CabrónCabo Samaná

CuevaFun Fun

María Montez (BRX)

Punta Cana (PUJ)La Romana

Casa de Campo(LRM)

La Isabela (JBQ)

Arroyo Barril

Laguna Redonda

Pedernales

SANTO DOMINGOLa Romana

Reserva CientíficaÉbano Verde

Cibao (STI)

JuanDolio

GregorioLuperón(POP)

Cueva LasMaravillas

IslaCatalina

Altos deChavón

El Catey (AZS)

Las TerrenasEl Portillo

Las Américas(SDQ)

La Caleta

Bocade Yuma

Dunasde Baní

Haiti

Lago EnriquilloIsla Cabritos

Caribbean Sea

Parque Nacionaldel Este

Azua

BANÍ

San Cristóbal

Cabrera

San Joséde las Matas

Dominican Republic

San FranciscoDe Macorís

City and Town

Point of Interest

Cruise Port

International Airport

Domestic Airport

Beach

Protected Area/Park

Golf Course

Whales

Highest Peak

KEY

Playa Grande

CayosSiete

Hermanos

Atlantic Ocean

Caribbean Sea

Gulf of Mexico

United States

Mexico

Cuba

Jamaica

Haiti

DOMINICAN REPUBLIC

PuertoRico

Atlantic Ocean

Caribbean Sea

Gulf of Mexico

United States

Mexico

Cuba

Jamaica

Haiti

DOMINICAN REPUBLIC

PuertoRico

© 2012 PRO RD S.A. • Email: info@dr1maps.com • Tel. 809.769.9560

Investment GuIde, contents:

Letter from the minister of tourism.................................................................. 4An Island with a History ............................................................................... 5A country equipped for tourism: •InternationalAirports ............................................................................. 6 •DominicanRepublic,theGolfMeccaoftheCaribbean ............................. 7 •CruisesintheDominicanRepublic .......................................................... 8 •SportsMarinas ..................................................................................... 8 –ArrivalProcess ................................................................................. 9 – existing marinas .............................................................................. 9 – Fishing .......................................................................................... 10A country that “Has It All” ........................................................................ 11International tourism Promotion: ................................................................. 12DominicanTourismbytheNumbers: ............................................................ 13 •Tourismincome .................................................................................. 13 •Hotels ................................................................................................ 13 •Historyofhoteloccupancy ................................................................... 13opportunities for Investment in tourism ........................................................ 17RealEstateTourismintheDominicanRepublic .............................................. 18ReasonsforInvestingintheDominicanRepublic ........................................... 19IncentivestheCountryandTourismOfferInvestors: ...................................... 20ForeignInvestmentAct ............................................................................... 21BenefitsforPensionersandAnnuitantswithaForeignSourceofFundsAct ....... 21AcquiringRealEstateintheDominicanRepublic ........................................... 22MortgageRegulatorySystem ...................................................................... 23MinistryofTourismannouncesOneStopWindow,tomakeinvestingeasier ..... 23Contact ................................................................................................... 24

4 5

LETTERFROMTHEMINISTEROFTOuRISM:

DearReader,

TheDominicanRepublicoffersattractiveconditionstothosewhoinvesthere:amongthese are legal security, a solid democracy, high investment profitability, and afavorablebusinessclimate.

TheDominicangovernmenthasplacedahighpriorityondevelopingtourisminthecountryoverthelastfortyyearsandpromotedpoliciesthatincentivizeinvestment.

ThemanyinvestmentincentivesincludetheForeignInvestmentLaw,whichgivesequalrightstoforeignersandDominicans;alawthatgrantstaxexemptionstopensionersandannuitantswhochoosetoresideinthecountry;additionally,specializedLaw158-01 offers generous tax advantages to new tourism projects and allows forrenovationandre-fittingofprojectsthatwereconstructed5ormoreyears,therebyguaranteeingcompetitiveness,sustainability,andreturnoninvestment.

The combination of its natural beauty and scenery, excellent climate, and thefriendlynatureofDominicans,inadditiontothehighincreasesinthevalueoftouristproperties,makethisthecountryofchoiceforinvestingandearninggoodprofits,or simply for safeguarding family savingswhileenjoyingownershipofa secondresidence.

WehopethatthisInvestmentGuidewillbealandmarkonthepathwaytakenbyinvestors.

WeinviteyoutovisittheMinistryofTourism,wherewearealwaysatyourservicetowelcomeyou,orientyou,andassistyouintheprocessofsuccessfullydevelopingyourprojectsinthiscountry.

Sincerelyyours,

FranciscoJavierGarcía DominicanRepublicMinisterofTourism

ANISLANDWITHAHISTORyOn December 5, 1492, Christopher Columbus discovered theisland that he later named Hispaniola. the indigenous people called it Quisqueya, which, in their language, means “MotherofAllLands.”TheDominicanRepublicoccupiestheterritorythathostedthefirstpermanentEuropeansettlementinAmerica;amongother“firsts”intheAmericas,itwashometothefirstuniversity,thefirstcathedral,andthefirstroyalcourt.

The Dominican Republic is located centrally in the CaribbeanSea, at the convergence of all the routes of theAmericas andtheworld; thismakes it a geographically advantaged locationfortradeandtourism.HispaniolaisthesecondlargestislandintheGreaterAntilles, and it is part ofCentralAmerica and theCaribbeanregion.

The Dominican Republic is a fertile country, with almost 80%coveredbymountain ranges that run from theNortheast to theSouthwest. Pico Duarte (3,175 m) is the highest point in theAntilles.TheCibaovalley,oneofthemostfertileandbestwateredregionsinthecountry,islocatedbetweentheCordilleraCentral[Central Range] and the Cordillera Septentrional [NorthernRange],arangethatrunsparallel tothenorth.Thecountryhasseveral watercourses, the yaque del Norte, [Northern yaque],yuna,andCamúinthenorth;theyaquedelSur[Southernyaque],Ozama,andSocointhesouth;andalargesaltwaterlake,theenriquillo, in the southwest.

Itenjoysatropicalclimate,moderatedbyprevailingeastwinds.Temperaturesofover23°Carerecordedintheplainsthroughoutthe year, except during the summer, when temperatures rangebetween27°Cand35°C.Inthemountainousregions,temperaturesarecooler,andinsomeplaces,cold.

TheDominicanRepublicreceivesmillionsofvisitorsannuallyfromforeignersandDominicansresidingabroad;itisoneofthemaintouristdestinationsinthewholeoftheAmericas.

6 7

INTERNATIONALAIRPORTS

Thecountryhasatotalofeightinternationalairports,sixofwhicharemanagedby“AeropuertosDominicanosSigloXXI” [Century21DominicanAirports] (AERODOM),acompanyoperatingunderaconcessionfromtheDominicanStateforaperiodofthirtyyears.Theremainingthreeairportsbelongtotheprivatetourismsector. •LasAmericasInternationalAirport,SantoDomingo •LaIsabelaInternationalAirport,Higuero •LaRomanaInternationalAirport •PuntaCanaInternationalAirport •ElCateyInternationalAirport,Samaná •GregorioLuperónInternationalAirport,PuertoPlata •SantiagoInternationalAirport •MaríaMontezInternationalAirport,Baharona

Therearealsothreerenovatedairportsforimproveddomesticflights.Theseare:

• Contanza Airport, also known as “Aeropuerto Nacional Expedición 14 de Junio” [June14ExpeditionNationalAirport] •OsvaldoVirgilMonteCristiAirport •PedernalesAirport,CaboRojo

THEDOMINICANREPuBLICISTHEGOLFMECCAOFTHECARIBBEAN

Golfattractsthekindoftouristwhohashighpurchasingpower,andwho, it is estimated, spends four times more a day than the average tourist,therebyincreasingtheprofitabilityoftouristactivity.Butgolftourismoffersadvantages thatarenotmerelyfinancial; it isalsolessseasonal,andallowsfordiversifiedproductsandmarkets.

Infact,golfersstandoutfortheirhigheraveragedailyspending,morethanhalfofwhichisusedforactivitiesnotrelatedtothesport.

Thecountry’sclimateadvantagemakesitpossibleforthissporttobeplayedatanytimeoftheyear;italsooffersmountainousconditionsandidealvegetationfordesignersofthesefacilities—amongwhomtheresonantnamesofPeteandPBDye,JackNicklaus,NickPriceandNickFaldo,amongothers,standout—totesttheirexperienceandimaginationbytakingadvantageofthenaturalterrain.They

havebeenabletousetheseelementstoproduceresultsthat,fromatechnical,sporting,andlandscapestandpoint,areasoriginalasthey are surprising.

Therapidexpansionofrealestatetourismpromotesthisactivity,anditisthefundamentalbasisofthestrategyplannedandimplementedbytheDominicanauthoritiesforsustainabletourism;at this time,thereare23golfcoursesinthiscountrythatarelinkedtosometypeof hotel and/or real estate tourism.

It should be pointed out that one of the golf courses beingremodeled, the Playa Grande Golf Course in Río San Juan, isamongthefavoritesofgolfloversandconsideredoneofthebestin the world.

Wecansayunequivocallythatgolfischangingthefaceoftourismin thiscountryand isbecoming thepowerbehindsecondhometourism.

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CRuISESINTHEDOMINICANREPuBLIC

TheDominican Republic is strategically located on cruise shiproutesandhasfourfunctioningcruiseports:SantoDomingo(DonDiego), Sans Souci, La Romana, and docking facilities at IslaCatalinaandSamaná.

TheCaribbean, thenumberoneoption for cruisedestinations,currentlyrepresents38.19%ofdestinationsselectedworldwide.

The average daily spending by passengers at ports of call is$98.10. crews spend approximately $74.56

According toarecentstudybyBusinessResearch&EconomicAdvisors(BREA),onelayoverbya2000-passengershipwithacrewof800contributes$190,476.00tothecityinpassengerspending.

Ifweaddservicesandporttaxestothisfigure,eachshiparrivingatoneofourportscontributesaround$260,000.00.

SPORTSMARINAS

TheDominicanRepublichasoneofthemostextensivecoastlinesin the Caribbean, with over 1,200 kilometers of diverseecologicalenvironments,rangingfromdesertstotropicaljungles.Regardlessofwherevisitorsdecidetodropanchor,theyaresureto encounter beautiful mountain views, turquoise waters, andwhite sands.

In the next two years, theDominicanRepublicwill double thenumberoffullservicemarinas,somewithfacilitiesneverbeforeavailableintheCaribbean.Thesenewstructuresaremuchmorethanplacestodockaboat,sinceseveralofthenewmarinasareopening inplaces in the country that neverbefore couldofferservicestolargevessels.

Currently, theDominicanRepublicisabletodockboatswithalengthofupto250feet.Infact,CapCanaHarborandMarinaisthelargestintheCaribbean,withthecapacitytodockmega-yachtsupto500feetlong.

ARRIVALPROCESSWhenarrivinginport,vesselsshouldpresentDominicanauthoritieswithalltherequirementsforinspection,namely: •Boatregistration •Documentationofdeparturefromportoforigin •Listofpassengersandtheirpassportnumbers •Immigrationfeeof$60peryacht •Everypassengermustpurchasea$10touristcard

Thesefeesareacceptedonlyinu.S.dollars,andshouldbepaidtotheportauthoritiesatthemarina.Tofacilitatetheimmigrationprocess, passengers and crew may not disembark until theinspectionhasbeencompleted.

For those who are planning to travel by boat to DominicanRepublic,herearethemarinasthatareopenorplannedtoopenshortly, allowing greater access to the northern, eastern andsoutherncoasts.

MARINAS

BARTOLOMéCOLONMARINAMarinalocatedinthePortofSantoDomingo.OperatedprivatelybythePortofSantoDomingo.

CAPCANAMARINALocated ten minutes away from the Punta Cana InternationalAirportanddesignedtobethemostcompleteandmodernintheCaribbean. Theonly full servicemarinawithina400kilometresradiusbetweentheTurksandCaicosIslandsandPuertoRico,theMarinahaveacapacityfor1,000boatsofvaryingsizes,includingmegayachtsupto250feetinlength.Surroundedbyworldclassrestaurants and luxury boutiques, it will include seven islandsdestinedforresidencesofthehighestlevel.www.capcana.com

CASADECAMPOMARINALaRomanaisaverypopularresortamongtherichandfamous.Casa de Campo Marina provides complete services to 350yachtsofupto250feetlong.Italsohasninestoresandapianobar that were constructed along the marina’s boulevard. In

addition,theyachtclubhasaddedasailingschoolwithinstructorsfrom the renowned Italian yacht club, the Costa Esmeralda. www.MarinaCasadeCampo.com

cLub náutIco de sAnto domInGoTheClubNáuticodeSantoDomingo[SantoDomingoyachtClub]operates threemarinas in the country:BocaChica,SanCristóbaland monte cristi. the marina also hosts several fishing tournaments andregattasthroughouttheyear.www.clubnautico.com.do

PuERTOBLANCOMARINA LocatedwestofPuertoPlatainLuperón,PuertoBlancoisacompletelyenclosedmarinawiththeabilitytomoorupto200yachtswitheight-footdrafts.ThemarinaislocallyownedandknownforitsnightsofDominicanfoodandfunforthosewhoseyachtsareanchoredthere.The Luperónarea is known tobe secure forboats in theeventofhurricanesandtropicalstorms.

OCEANWORLDADVENTuREPARk&MARINAAlsothewestofPuertoPlata,OceanWorldAdventureParkrecentlyaddedamarinatoitsfamedwaterpark.Severalinteractiveprograms,includingencounterswithdolphins,stingraysandsharks,makethisoneofthemostuniquemarinasintheworld.Thisfull-servicemarinahas83slipsforyachtsupto250feetlong,besidesaheliport,diveshop,casinoandotherattractions.www.OceanWorldMarina.com

10 11

ACOuNTRyTHATHASITALL

Not only does the Dominican Republic haveexceptionalregionswithunequaledtourismpotential,but it also offers investors a legal framework thatis well-suited for carrying out their projects. Thefantasticcombinationofdiversenaturalenvironmentswill inspire your imagination and refresh your spirit.

Tallmountains,exuberantjungles,pinewoods,coralreefs, immaculate beaches, and arid deserts allcoexistinthismagicalland.Thismagnificentnaturalworldisthesettingforluxuriousvillages,welcomingcities,andfirstclasslodgingsforvisitors.

PuNTACANARESORTCLuBMARINAPuNTACANA RESORT & CLuB has a full-service marina.Featuringtwodocksandspacefor43seventy-footyachts.Thismarinaisafavoriteofwell-knownfishermenandapopularspotin Dominican Republic for holding billfish tournaments. www.PuntaCana.com

PuERTOBAHIAMARINAPuertoBahiaMarinaiseverysailor’sdream,whereyoucansailtoamazingadventuresandliveyourpassionforthesea.Withacapacityfor107yachtsupto150feet long,itoffersall theservicesandamenitiesofaworld-classmarina,complementedbythefriendlinessofourtrainedstaff.www.puertobahiasamana.com/es/es/marina

LuPERóNNot far fromwhereChristopherColumbus tied up for the firsttime, thenewLuperónfull-servicemarinaisunderconstruction.Itwillhavespacefor250yachtsbetween30and80feetlong,and7yachtsupto100feetlong.TheBahíadeLuperón[LuperónBay], located a short distance from Puerto Plata, is a naturepreservethathasshelteredmanyvesselsduringtropicalstorms.www.MarinaTropical.com

ROCOkIMARINA JustnorthofPuntaCana,anothermarinaisunderdevelopment.Although the details on the number of slips and the length ofyachts it canacceptarenotyetavailable, theWestinRocoki

Beach&Golf Resortwill house amarina as part of itswatersportscenter.Inadditiontocompletemarinaservices,thecenterwillalsohaveaboogieboardlagoon,excursions,sailingclasses,fishingboatsandmuchmore.www.Rocoki.com

MARITIMEPORTOFSANTODOMINGOAspartoftheMaritimePortofSantoDomingoRevitalizationandExpansionProject,amarinawithacapacityfor500vesselsofupto140feetlongwillbebuilt.ThemarinawillbelocatedbetweenSanto Domingo’s Obelisk and the monument to Montesinos.www.SanSouci.com.do

FIsHInGDominican Republic is home to several international billfishtournamentseveryyear,includingthe“BillfishXtremeTournament,”sponsoredbytheu.S.televisionchannelESPNatthePuntaCanaResort & Club. Many world records for billfishing have beenbrokeninthewaterssurroundingthecountry.TheworldrecordforanAtlanticbluemarlinwassetoffthecoastofLaRomanawithacatchweighing385kg.

Despitethis,mostfishingenthusiastswhocometotheDominicanRepublicfortheirvacationsdonotrealizethecountryisoneofthebesthideoutsofdozensofcovetedfishspecies.Forthosewhodonotwanttobreakrecords,butwouldliketobattleabillfishorlandabarracuda,fishingexcursionsareofferedthroughoutthecountry.

12 13

INTERNATIONALTOuRISMPROMOTION

the ministry of tourism invests over 45 million dollars yearly inpromotingthisdestinationinternationallyintheprincipaltourism-originatingmarketsandotheremergingmarkets.

International promotion campaigns are often created bymeans of a strategic alliance with airlines and/or touroperatorsfromsuchcountries,usuallyonamatching50-50basis,therebydoublingthevalueofthecountry’sinvestment.This active promotional campaign is a decisive factor inkeepingthegrowingnumberoftouristsflowingtowardthecountry.

In order to assist both tourists and investors, theMinistryof Tourism has twenty-two Tourism Promotion Officesworldwide,locatedinprincipalcitiesinmajormarkets.

DOMINICANTOuRISMByTHENuMBERS

INCOMEFROMTOuRISMSince 1980,which is the first year that theCentral Bank reportedtourism statistics, revenues received by Dominican Republic fromtourismhave increasedgreatly, frombarely$172.6million toover$4.3 billion in 2011, which is the last complete year for whichstatistics are available. This averages out to a 5.1 percent annualgrowthratefortheperiodbetween2000and2011.

HoteLThecountrycurrentlyhasmorethan500touristhotels,whichcombinedhavemorethan67,000midtohighqualityhotelrooms;makingthecountrytheCaribbeanleaderinlodgingcapacity.

Thegrowthratefornewleisuretouristroomshasaveraged3.2percentannuallyover theperiodbetween1980and2011,arate thathasbeenlevelingoffasthetourismproductmatures.

HISTORyOFHOTELOCCuPANCyAt this timewecanshowoccupancy ratesofover69.8percent in2011, higher that what we had, for example, in 2001, when we had scarcely54,030touristrooms.

Weshouldnotethat,evenastheoccupancyratehasbeenincreasingalongwiththenumberofnewlyconstructedroomsandhotels,thereisnocontradictionhere,sincethenumberoftouristschoosingusastheirvacationdestinationhasbeengrowingatasimilarpace.Inaddition,itisnecessarytotakeintoaccounttherobustgrowthoftherealestatetourismsector,whichisalsoatypeoflodging,insecondhomes.

14 15

Income from Tourism, in Millions of US Dollars

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2,500

3,000

3,500

4,000

4,500

Non-resident Arrivals by Air

2,700,000

2,900,000

3,100,000

3,300,000

3,500,000

3,700,000

3,900,000

4,100,000

4,300,000

4,500,000

Employed in Hotels, Bars, and Restaurants

150,000

170,000

190,000

210,000

Hotel Occupancy Rate

62.0

64.0

66.0

68.0

70.0

72.0

74.0

76.0

Total Tourist Rooms

50,000

55,000

60,000

65,000

70,000

Gross Domestic Product (in Millions of Dominican Pesos, from 1991)

200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0

Income from Tourism, in Millions of US Dollars

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2,500

3,000

3,500

4,000

4,500

Non-resident Arrivals by Air

2,700,000

2,900,000

3,100,000

3,300,000

3,500,000

3,700,000

3,900,000

4,100,000

4,300,000

4,500,000

Employed in Hotels, Bars, and Restaurants

150,000

170,000

190,000

210,000

Hotel Occupancy Rate

62.0

64.0

66.0

68.0

70.0

72.0

74.0

76.0

Total Tourist Rooms

50,000

55,000

60,000

65,000

70,000

Gross Domestic Product (in Millions of Dominican Pesos, from 1991)

200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0

Income from Tourism, in Millions of US Dollars

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2,500

3,000

3,500

4,000

4,500

Non-resident Arrivals by Air

2,700,000

2,900,000

3,100,000

3,300,000

3,500,000

3,700,000

3,900,000

4,100,000

4,300,000

4,500,000

Employed in Hotels, Bars, and Restaurants

150,000

170,000

190,000

210,000

Hotel Occupancy Rate

62.0

64.0

66.0

68.0

70.0

72.0

74.0

76.0

Total Tourist Rooms

50,000

55,000

60,000

65,000

70,000

Gross Domestic Product (in Millions of Dominican Pesos, from 1991)

200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0

Income from Tourism, in Millions of US Dollars

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2,500

3,000

3,500

4,000

4,500

Non-resident Arrivals by Air

2,700,000

2,900,000

3,100,000

3,300,000

3,500,000

3,700,000

3,900,000

4,100,000

4,300,000

4,500,000

Employed in Hotels, Bars, and Restaurants

150,000

170,000

190,000

210,000

Hotel Occupancy Rate

62.0

64.0

66.0

68.0

70.0

72.0

74.0

76.0

Total Tourist Rooms

50,000

55,000

60,000

65,000

70,000

Gross Domestic Product (in Millions of Dominican Pesos, from 1991)

200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0

16 17

OPPORTuNITIESFORINVESTMENTINTOuRISM

Becauseofthesustainedprofitabilityofhotelsinourcountry,accommodationofferingsoutpacedthecapacitytogeneratenewcomplementaryofferings;thiscreatedanareaofinvestmentopportunityinthissector,inadditiontothecontinuingopportunitiesinlodging.Itshouldbenotedthattherecentlyconstructedhotelsaretop-endresorts,andthisimprovesthequalityoftheproduct.

There is no doubt that the country’s extensive hotelofferingsrequirecreationofcomplementaryfacilitiesthatoffer touristsawidevarietyofalternatives forvacationenjoyment.

Investment in this category of tourism product is anopportunity for investors, and the state grants them majortaxexemptionssotheycandeveloptheirtourismprojects.Infact,alargemeasureofthesuccessincreatingcomplementarytourismofferings,suchasthemorethantwentygolfcourses,thesportsmarinas,restaurants,andtheme parks, among others, were created within theframeworkofanexceptional systemof taxexemptionssetforthinLaw158-01,whichwewilldiscussinmoredetailbelow.

Today,therearebusinessnichesinthenewcomplementaryofferingssectorthatoftenrequirelowerinvestmentandoffer a higher rate of return than tourist hotels.

TheDominicanRepublicMinistryofTourismthroughitsdepartment for Investment Promotion and development, isalwaysavailabletothosewhowanttosoundoutnewpossibilitiesandopportunitiesforinvestinginourcountry;andwillsupportthemthroughouttheprocessofmakingasustainable,profitableandrewardinginvestment.

Income from Tourism, in Millions of US Dollars

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2,500

3,000

3,500

4,000

4,500

Non-resident Arrivals by Air

2,700,000

2,900,000

3,100,000

3,300,000

3,500,000

3,700,000

3,900,000

4,100,000

4,300,000

4,500,000

Employed in Hotels, Bars, and Restaurants

150,000

170,000

190,000

210,000

Hotel Occupancy Rate

62.0

64.0

66.0

68.0

70.0

72.0

74.0

76.0

Total Tourist Rooms

50,000

55,000

60,000

65,000

70,000

Gross Domestic Product (in Millions of Dominican Pesos, from 1991)

200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0

Income from Tourism, in Millions of US Dollars

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2,500

3,000

3,500

4,000

4,500

Non-resident Arrivals by Air

2,700,000

2,900,000

3,100,000

3,300,000

3,500,000

3,700,000

3,900,000

4,100,000

4,300,000

4,500,000

Employed in Hotels, Bars, and Restaurants

150,000

170,000

190,000

210,000

Hotel Occupancy Rate

62.0

64.0

66.0

68.0

70.0

72.0

74.0

76.0

Total Tourist Rooms

50,000

55,000

60,000

65,000

70,000

Gross Domestic Product (in Millions of Dominican Pesos, from 1991)

200,000.0220,000.0240,000.0260,000.0280,000.0300,000.0320,000.0340,000.0360,000.0380,000.0400,000.0

Housing Units

• Hotels• Real estate development• Mixed projects

Complementary Offerings

• Golf• Sports marinas• Theme parks

Support andInfrastructure

• Roadway infrastructure• Ports and airports• Tourism support industries

18 19

REALESTATETOuRISMINTHEDOMINICANREPuBLIC

ManytouristswhovisitDominicanRepublic,withitsmultipleandvariedattractions, and decide to choose it as their first or second place ofresidence.Whenthishappens,oneof theirfirstdecisionsis toinvest inrealestatebyacquiringavillaorapartmentinatouristarea.

Itshouldbementioned,asakeyfactorintherealestatedevelopment,thatpropertiesinthiscountryareexperiencingastrongincreaseinvalue.Thismakesthemhighlydesirableforthoseseekingonlytomakeaninvestmentthatwillprotecttheirmoneyandputittowork,instabilityintheworldwidefinancial picture, which is marked, among other factors, by a housingcrisis. InDominicanRepublic, thisdidnothave thenegativeeffects thatwereexperiencedinothercountries.

Ittakesjustonelookaroundanyofthetouristareastonoticethetremendousnumberofvillas,apartments,etc.,surroundedbytopgolfcoursesfromthebestdesignersintheworld.Numerousmodernandcomplexmarinasonourcoasts,toconfirmtheexpansionofrealestatetourisminthecountry,unparalleledbyanyotherislandintheCaribbean.

These investments flow mainly to Punta Cana, in the province of LaAltagracia,althoughtheyincludeareasofinfluenceoveralmosttheentirecountry:LaRomana,Bayahíbe,Samaná,PuertoPlata,JuanDolio,Miches,and santo domingo.

Toputthisdevelopmentintoperspective,sufficeittosaythatoverall,thenewinvestmentsapprovedby thiscountry’scompetentauthorities in thelast fewmonths haveaddedalmost25,000new rooms to thenation’stouristofferingsandwilldirectlycreatemorethan21,000stableandwell-paidjobs.

REASONSTOINVESTINTHEDOMINICANREPuBLIC

DominicanRepublicgeographicallyadvantagedlocationnearthemajorworldtourism-generatingcountries,allowingvisitorstocomeforaweekendorweeksandreturnhomequickly.

ApersonwhosettlesintheDominicanRepubliccanachieveahighstandardofliving,asthecountryhasthebenefitsofpeace,security,andcheerfulandhard-workingpeoplewhowanttogetahead in life.

Within the framework of its democratic system, DominicanRepublic offers the security that both domestic and foreigninvestors need. A large number of developers have takenadvantageof this factandchosenusasadestination for theircapital.

Ourdemocracy,nowfullymature,holdsfreeandopenelectionseveryfouryears,inwhichexecutive,congressionalandmunicipalauthoritiesarechosen.

The constitution of the Republic guarantees the free enterprisesystem, under which the free trade system is respected; thishas permitted the development of major companies, whodevelopprojects,producegoods,offerservices,andguaranteeemploymentformillionsofDominicans.

Wearehighlycompetitiveintermsofcosts,andwebenefitfromvariousfreetradeagreements.ForexampleCAFTA-DRwiththeunited States and Central America grants preferential accessto those markets, and an Economic Partnership Agreement (EPA) with theEuropeanunionassuresrobust.

We have one of themost advanced communications systems in all of LatinAmerica,witha teledensityofover100percentwhich isanadvantage fortoday’sbusinessworld.

QuALITyOFLIFE

STRONGINCREASEINPROPERTyVALuES

FREETRADEAGREEMENTWITHTHEu.S.

PROXIMITyTOLARGEMARkETS

POLITICALANDECONOMICSTABILITy

TRANSPARENTLEGALFRAMEWORk

LEGALSECuRITy

yOuNG,WELL-TRAINEDWORkFORCE

MODERNINFRASTRuCTuREDEVELOPMENT

APPROPRIATESuPPORTSERVICES

ADVANCEDCOMMuNICATIONSSTRuCTuRE

comPetItIve costs

TAXINCENTIVES

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INCENTIVESOFFEREDTOINVESTORSByTHECOuNTRyANDTHETOuRISMSECTOR

Since 2001, Tourism IncentiveAct 158-01 has been in placeinDominicanRepublic,revolutioningtheinvestmentclimateandallowinglargevolumesofcapitaltobeattractedtothetourismsector.

Thepurposeofthisactistopromotenewdevelopmentinareasofthecountrywhich,despitetheirmajorbasicattractions,havehadlimitedgrowth.Italsoservestocreatenewcomplementaryofferingsintouristcentersthathavealreadybeendevelopedandtosupport therenovationofhotelproperties thathavebeeninoperation for five or more years. this law grants an exemption fromallnationalandmunicipaltaxesfortenyears.Itismanagedbyapublic-privateagencythatmeetsperiodicallytoreviewtheapplicationsforproposednewdevelopments.

Infact,theTourismPromotionCouncil,Confotur,grantstwolevelsofapprovalsfornewtourismprojects:thefirstisprovisionalforstarting thedevelopment; theother isfinal,once theproject isadvancedenoughtobeconsolidatedandlaunched.

A)THEINCENTIVESFORPROVISIONALAPPROVALARE:1. Exemption from the requirement to legally establish thecompany2.Increaseinthesharecapital3.Propertytransfertax(3percentofthevalueoftheproperty)

B)LIkEWISE,FINALAPPROVALGRANTSTHESEEXEMPTIONS:1.Incometaxfortenyears2.Nationalandmunicipaltaxes3.Taxesonconstruction,plans,etc.4. taxes on the payment of loan interest5. Reinvestment tax of 20percent (tax savings onanotherexistingcompany,forfiveyears)6. Equipment import (exempt fromcustoms taxes, taxesontransferofindustrialgoodsandservices)7. the tax on luxury housing

Essentially, provisional approval exists so that companies canadd to their capital,purchase land,build (if they seekout thecorresponding construction permits, etc. at the same time), sothat when they get the final approval, they are already in a positiontostartwork.

FOREIGNINVESTMENTLAWForeignInvestmentAct16-95grantsequalrightsanddutiestoforeignersandDominicansandopensupallpossibletypesofbusinessesandtrade.Itrecognizesthatforeigninvestmentandtechnologytransfercontributetothecountry’seconomicgrowthandsocialdevelopmentbyfavoringcreationofemploymentand foreign currency, promoting the capitalization process,andcontributingefficientmethodsofproduction,marketing,and administration.

Thislawalsopermitsthefreerepatriationofinvestedcapitaland profits.

Thecountryalsohasfreecirculationandexchangeofforeigncurrencywithnoobstaclesofanykindor controlof foreigncurrencyexchange,withthefreemarketdeterminingthedailyexchangeratesagainstothercurrencies.

BENEFITS FOR PENSIONERS AND ANNuITANTSWITH AFOREIGNSOuRCEOFFuNDSACTthe benefits for Pensioners and Annuitants with a Foreign Source of Funds Act 171-07 grants the following to theseindividuals,asanincentivetobringandkeepthemhere:

•Aprogramofresidenceinthecountrythroughinvestment(thosewhoarebylawconsideredtobedependentsofthepensionerorannuitantalsobenefitfromthisprogram)•Exemptionfrompayingtaxesonhouseholdeffectsandpersonal items•Partialexemptionfrommotorvehicletaxes•For thefirstproperty that isacquired,exemption fromtaxesonpropertytransfers;•Exemptionof50percentofmortgagetaxes,whenthecreditors are financial institutions duly regulated by theMonetaryandFinanceLaw;• Exemption of 50 percent on real estate tax, whenapplicable;• Exemption from taxes encumbering the payment ofdividendsandinterest,whethergeneratedinthecountryorabroad;•Exemptionof50percentoncapitalgains,amongothers

In order to take advantage of this law, it is a requirementthat thepensionerorannuitant receiveamonthly incomeofno less thanuSD$1,500and$2,000,respectively. If theyhavedependents,anadditionalmonthlyincomeofuSD$250is required for each of them. These amounts,whichwill bedeclaredas income in order to take advantage of this law,shallbeexemptfromincometax.

ALSOSHELTEREDByTHISLAWARE: A)Dominicancitizenswhoarepensionersof,orretireesfrom,institutionsorgovernmentsofothercountries,orthosewhocanprovethattheyhaveincomeundertheconditionsestablishedbythelaw,andhaveresidedabroadpermanentlyfornolessthantenyears;and

B)Foreignersinthecountrywhoacquirethestatusofpensionerand/or annuitant.

This law recognizes the right thatpensionersandannuitantshavetoacceptremuneratedemploymentinthiscountry,subjecttopaymentoftheassociatedtaxestotheDominicanStateforthesalaryearnedbyeachactivity.

This contributes greatly by strengthening the country’s legalframework, thereby incentivizing foreign investment andpromotingtourismin theDominicanRepublic. Italsohas theeffectofsupportingthelargerealestateprojectsthathavebeenbeingdevelopedinourcountryoverrecentyearsandthatareintendedforforeigners,Dominicansandresidentforeigners.

22 23

ACQuIRINGREALESTATEINTHEDOMINICANREPuBLICForeigners have complete legal capacity to acquirepropertyorpropertyrightsundernospecialconditions.The rules that apply to Dominican purchasers are thesame as those for foreigners.

When there is interest in purchasing a property, thepropertyshouldbeverifiedattheDominicanTitleRegistryOffice.Thepurposeofthisistoobtainwrittenconfirmationoftheresultoftheinvestigationandtoestablishthatthispropertyhasnoanomaliesofanykind.ThiscanbedonebyrequestingacertificatefromtheRegistrarofTitles.Thisimportant step protects individuals or companies whowish to acquire a property, as it reveals the existenceofanysaleormortgage that isnotyet recordedat thetimethebuyersdeposittheirsalescontractforregistrationpurposes.

Rapidregistrationofthesaleisextremelyimportant.Forthis step, purchasers deposit an original deed of sale,duly legalized by a notary public, in the title registryoffice,alongwiththecertificateoftitle,whichshouldbeinthenameoftheseller.Thiswillthenbecanceledandreplacedbyanewcertificateoftitleinthenameofthepurchaser.

Thistypeoftransactioninvolvesapaymentoftaxesandfees to the title registry office, although according totheTourism Incentive Law, thesearedeductible. Issuingmortgages and encumbered purchases is regulated bytheLandRegistryLaw,theCodeofCommerce,theCivilcode and other related laws.

MINISTRyOFTOuRISMONE-STOPWINDOWMAkESINVESTINGEASIERThe start of the online one-stop-shop to facilitate andaccelerate investments in tourism have been announcedin may 2012. The facility is intended to make it easierforDominicanand foreign investors to get their projectsapproved.“Thisisanimportantstepwhereworkingside-by-sidewith technologywecanbenefitallandinvestors,even from abroad, can submit their projects and getanswers from the ministry of tourism.

ThecontentoftheplanisevidenceoftheimportancetheMinistry has given to planning, considering it essentialfor continuous development and the sustainability ofthe country’s tourism industry. Participative planningmethodologieswere used to develop the plans,workingcloselywithprivateandpublicsector.

userscanaccesswww.dpp-mitur.gov.doforthenewonlineservice. Informationon the legal frameworkandTourismdevelopment Plans of the ministry of tourism and the incentives offered under Tourism Promotion Law 158-01hasalsobeenpostedonline.

MORTGAGEREGuLATORySySTEMFor the purposes that may apply, all types of property rightsmaybemortgaged,betheytitle,operation,oruserrights.Facilitiesthatmaybeacquiredbyindividualsorcompaniesarealsoconsideredrealestateandmaybemortgaged. It is important to point out that mortgages on future properties are not accepted.Nevertheless,mortgagecreditorinterestisextendedtoimprovementsmadeonthepropertyafterthecontract.

Inorderforamortgagetobevalidandbindingagainstthirdparties,mortgagedebtorsshouldhavealegallyregisteredtitle.Personswithconditionalpropertyrightsmaygrantmortgagesunder thesameconditions thataffecttheirrights.

Mortgages should be registered at the title registryoffice for the place where the property is located;this is done by depositing the guarantee contractandthecertificateoftitle.Thedateofregistrationwillbe recorded as the date these are deposited, eventhoughthephysicalissuanceofthemortgagecreditorcertificatetakesplacesometimeafterwards.

DEPARTMENTFORINVESTMENTPROMOTIONANDDEVELOPMENT

Av.CayetanoGermosén,esquinaAv.GregorioLuperón,SantoDomingo,DominicanRepublic

Phone: 809-221-4660invest@godominicanrepublic.comwww.godominicanrepublic.com

www.sectur.gov.dowww.dpp-mitur.gov.do

Ministerio de Turismo