Nearshoring in the Dominican Republic

Commercial advantage of the Dominican Republic: international agreements that promote investment and nearshoring

In a global environment marked by changes in trade policies, geopolitical tensions, and new regulations, the Dominican Republic stands out as a reliable and increasingly attractive destination for foreign investment. Thanks to a network of strategic trade agreements, the country offers real and timely advantages for companies seeking stability, preferential access, and logistical efficiency.

Network of trade agreements that position the Dominican Republic

DR-CAFTA: preferential access to the US market
The treaty with the United States and Central America guarantees reduced tariffs, protection for foreign investment, clear rules, and legal mechanisms for dispute resolution. It provides a legal basis for dealing with new tariffs and strengthening legal certainty for investors.

EPA: quota-free access to the European Union
The Economic Partnership Agreement offers tariff-free access for numerous Dominican products. It also promotes technical cooperation, shared standards, and sustainable development in sectors such as agribusiness, tourism, and renewable energy.

CARICOM: regional integration with 15 Caribbean countries
This agreement facilitates exports with preferential tariffs, promotes regional value chains, and improves access to strategic island markets for food, manufacturing, and logistics.

The Dominican Republic as a strategic gateway to global markets

Thanks to its location less than two hours from Florida and modern port infrastructure, the country is a natural logistics hub for companies seeking to reduce their dependence on Asia. Trade triangulation between the United States, the European Union, and the Caribbean provides simultaneous access to millions of consumers.

Key investment sectors with legal backing

- Manufacturing exports from free trade zones
- The production of medical devices, textiles, and electronics benefits from tax exemptions (Law 8-90) and preferential access to international markets. The Dominican Republic is the leading exporter of medical devices in the Caribbean, and textile inputs from the US strengthen integration.

Value-added agroindustry

Products such as cocoa, avocados, and tropical fruits enter the EU duty-free and with reduced tariffs in the US. There is growth in processed foods certified as organic and fair trade, which respond to demand in premium markets.

Renewable energy and sustainable infrastructure

Law 57-07 provides robust incentives for solar, wind, and biomass projects. Equipment such as solar panels and turbines can be imported duty-free, boosting one of the most dynamic industries in terms of foreign direct investment.

Tourism and hospitality

As a leading tourist destination in the Caribbean, the country offers incentives for hotel infrastructure, ports, and tourist services under Law 158-01. The EPA also favors open trade in tourist services.

Digital economy and BPO services

The bilingual workforce, together with the benefits of international agreements, make the country an ideal destination for technological development, software, call centers, and fintech operations. Data protection, intellectual property, and access to services are covered by the agreements.

Strategic responses to global disruptions

The Dominican Republic has been able to adapt to challenges such as European environmental regulations, trade tensions between the US and China, and supply chain disruptions. Highlights:

- Clear and binding rules under DR-CAFTA and EPA
- Adaptation to ESG standards and traceability required by international buyers
- Efficient export infrastructure with modern ports and simplified customs procedures
- Dispute resolution mechanisms that protect investors
- Regulatory transparency and equal access under national treatment and most-favored-nation clauses

Amid global changes, the Dominican Republic offers regulatory stability, modern infrastructure, and real growth opportunities for companies that value predictability and competitiveness. With solid trade agreements and expanding sectors, the country is positioned as a strategic partner for international business.

Why consider nearshoring in the Dominican Republic?

The relocation of operations to nearby countries, known as nearshoring, has become a key strategy for US companies. With trade tensions between the US and China, rising tariffs, and disruptions from the pandemic, many companies have begun to reevaluate their global supply chains. The Dominican Republic is emerging as a smart, resilient, and cost-effective alternative.

Strategic location and agile access

The Dominican Republic is only 2 to 4 hours by plane from the US East Coast, and products arrive in 3 to 5 days, without detours through the Panama Canal. This proximity speeds up delivery times and reduces logistics costs.

Benefits of the DR-CAFTA agreement

Thanks to the DR-CAFTA free trade agreement, Dominican products enter the US duty-free or with very low tariffs, unlike Asian exports.

World-class infrastructure

The country has a robust logistics network: ports such as DP World Caucedo and Haina, international airports in key regions, and a modern road network. Companies such as IKEA already rely on this infrastructure for their regional operations.

Political and economic stability

The Dominican Republic offers a favorable environment for investment, with sustained growth, pro-business reforms, and a predictable legal framework backed by international agreements.

Competitive operating costs

The country stands out for its low labor and operating costs. Industrial workers earn an average of $70 per week, and technicians earn $100. Companies in free trade zones receive renewable tax incentives for 15 years, which improves the profitability of operations.

Disaster resilience

Industrial parks are designed to withstand hurricanes and have their own power generation, ensuring operational continuity during weather events.

Tax advantages of the free trade zone regime

Companies located in free trade zones benefit from total exemption from income tax, import duties, VAT, municipal taxes, and export taxes. These conditions significantly reduce the cost of doing business.

Economic performance in 2024

The free zone sector generated exports worth US$8.6 billion in 2024, up 43% from 2020. It currently accounts for 67% of national exports, with more than 850 companies in 90 industrial parks and nearly 195,000 direct jobs. Seventy-two percent of these exports go to the United States.

Expanding sectors

- Medical devices: $2.76 billion (+52%)
- Tobacco: $1.32 billion (+53%)
- Jewelry: 61% growth
- Agricultural products: +252%
- Cardboard and paper: +855%

Conclusion: the time is now

Nearshoring is not a trend; it is a strategic necessity. The Dominican Republic offers unmatched advantages in cost, location, infrastructure, and commercial alignment. Space is filling up quickly, and those who act first will reap the best opportunities.

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