New Free Trade Zones in the Dominican Republic: Driving Economic Growth, Job Creation, and Intellectual Property Protection

By Guzmán Ariza, Attorneys at Law

Free trade zones in the Dominican Republic are delimited geographical areas where companies primarily engage in the production of goods and services for export. These zones offer a favorable environment for foreign investment and international trade, facilitating economic development and job creation. Companies operating within free trade zones enjoy several fiscal and customs benefits, including exemptions from income taxes, import and export duties, and the Tax on the Transfer of Industrialized Goods and Services (ITBIS) on local purchases.

Free trade zones have become instrumental in boosting the Dominican Republic's economy. In 2018, there were Free Zone Parks located in 27 out of the country's 32 provinces. Notably, this sector has witnessed significant growth, with 126,095 imports, 75,091 exports, and 157,284 merchandise transfers between companies. These activities have not only generated substantial foreign trade but have also contributed to the creation of over 40,000 direct jobs, particularly in sectors such as medical equipment, electronics, textiles, and services.

The National Free Zone Council (CNZFE) is actively working to expand the free zone sector in the country. The Council has recently signed contracts to develop five industrial parks in different locations across the nation which are expected to create an additional 1,512 direct jobs and generate approximately US$16,941,562.55 in revenue.

In addition to the park developments, the CNZFE approved the operation of 12 new companies in various sectors such as tobacco processing, lightweight beam and column manufacturing, assembly and design of luminaires, recycling collection, towing services, logistics and warehousing services, cigar production, textile manufacturing, and polyethylene product manufacturing. These companies are expected to contribute to the overall growth and revenue generation within the free trade zone sector.

As free trade zones grow throughout the country, efforts are being made to raise awareness and educate companies operating within these zones about intellectual property laws and regulations. These measures aim to prevent infringements and ensure compliance with the legal framework. By safeguarding intellectual property, free trade zones contribute to maintaining a fair and competitive business environment, promoting innovation, and fostering creativity.