Geography
The Dominican Republic occupies roughly two-thirds of the island of Hispaniola. The land surface area is 48,442 km2, making it the same size as Holland, Luxembourg and Northern Ireland all together. It is bathed by the Atlantic Ocean in the north and the Caribbean Sea in the south.

Language
The official language of the Dominican Republic is Spanish; although English, French, and Italian are widely spoken.

Currency
The Dominican Peso - its symbol is RD$. Exchange rates: 1 USD = RD$33
1 Euro = RD$44 1 £ = RD$64.

Population
9 million

Religion
The official religion is Roman Catholic.

Institutions
Presidential system with a Parliament made up of a Chamber of Deputies and a Senate. The President is elected for a period of 4 years.
The current President is Dr. Leonel Fernandez, elected in 2004 for a 4-year term.

The Dominican Republic has enjoyed continued democracy since 1961 with free elections held every four years and is recognised by several international organisations to be the most politically stable country in the Central American, Caribbean and Latin American region. This political stability is a guarantee to foreign investment.

Climate and Temperature
The Dominican Republic has a sub-tropical climate. However, there are also “micro climates” making it a very diverse country with mountains, lakes, waterfalls, rivers. The average temperature the whole year round is between 18°C and 27°C. It can be said that the Dominican Republic knows only one season: summer. The hottest month is August and the coolest is January. There are “tropical showers” all year round which keep the country green, with lush tropical foliage.

History
Christopher Columbus discovered the Dominican Republic in 1492, when the island was inhabited by the Taino Indians, who called it “Quisqueya” which means: “Mother of all lands”. It was under Spanish colonial rule until it became independent in 1844. Ruled by a series of dictators, the island became the Dominican Republic in 1961.

How to Get There
There are numerous airlines with direct regular flights to the Dominican Republic. Flying time from Europe is 8 hours; from New York, 3 hours; from Miami, 2 hours. Direct charter flights go from the U.K. There are 9 international airports on the island.

Economy
The Dominican Republic is one of the fastest growing economies in Latin America and the Caribbean. The GDP (Gross Domestic Product) for 2006 was +11.3%.

Key Sectors

  • TOURISM
  • TELECOMMUNICATIONS
  • INDUSTRIAL FREE ZONES
  • CONSTRUCTION

Main Exports
Sugar, coffee, cacao, tobacco (N°1 cigar producer in the world), ferronickel, silver, industrial free zones (apparel, electronic components), foodstuffs

Tourism
FOREIGN TOURIST ARRIVALS TO THE DOMINICAN REPUBLIC - 2006 (pdf)

  • Began late 70s/early 80s with 300,000 foreign visitors annually – in 2006, there were 4,000,000 visitors – a 1,200% increase
  • 48% tourists from North America (Canada and the United States)
  • 42% from Europe

While tourism began in the early 1980s with the all-inclusive hotel resorts offering package deals, there is now a demand for more upmarket, residential style accommodation. This is leading to major investment in high-end tourism-residential projects as more people realise the potential of this beautiful country in comparison to other Caribbean destinations.

Choose from luxury resorts with world-class spas, sparkling marinas accommodating mega yachts, signature golf courses, polo (the only country in the Caribbean with polo), tennis, rafting, climbing, horseback riding, four-wheel riding, windsurfing, surfing, kite surfing, diving, snorkelling, deep-sea fishing, whale-watching, ….

The Dominican Republic boasts over 22 golf courses, some of which were designed by world-renowned golf champions (Pete Dye, Gary Player, Jack Nicklaus, Robert Trent Jones, Tom Fazio).

The Dominican government is spending US$45 million on its international marketing campaign to promote tourism and investment from all over the world. This means that tourism will continue on its spiralling 8-10% annual growth mark, with guaranteed rental revenue for investors who want to rent out their properties. Plus, capital growth on property investment is a sure bet.

Real Estate
The property market or real estate, either in hotel projects or individual properties, is the number one investment opportunity in the D.R., as it’s called. The savvy Spanish, recognizing the boom in tourism in this country, have been investing in tourism real estate over the past decade or so and to date, Spanish investors have invested US$220.6 million in the hotel infrastructure. They are followed by investors from Italy, France, the United States and Canada.

The Dominican government officially welcomes foreign investment in nearly all sectors of the economy. There are no restrictions on foreigners purchasing property.

Investment incentives related to the promotion of tourism development in developing regions or areas (Law 158-01) means you enjoy the following tax breaks for a period of 10 years:

  • NO INCOME TAX
  • NO CAPITAL GAINS TAX
  • NO PROPERTY PURCHASE TAX
  • GUARANTEED RENTAL RETURNS AND NO TAX ON RENTAL REVENUE
  • REPATRIATION OF THE TOTAL AMOUNT OF CAPITAL INVESTED
  • REPATRIATION OF THE TOTAL AMOUNT OF PROFITS DECLARED DURING THE FISCAL YEAR

For those in the know, the Dominican Republic truly is the last great investment opportunity in the Caribbean.

Property in the Dominican Republic is still very competitively priced compared to many Caribbean islands which have priced themselves out of the market. Recognised real estate agents say existing properties in the Dominican Republic are a quarter of the price of those on more ‘blue-chip’ Caribbean islands (Bahamas, Bermuda, Barbados, Cayman Islands, Virgin Islands, Turks & Caicos). Buying property in Spain is about double the price you would have to pay for the same quality in the Dominican Republic.

Bachata Properties has listings of beachfront apartments starting at €90,000. Real estate goes hand in hand with tourism as most properties are located in tourist areas, with major hotel chains, so the investor gets between 7% and 9% guaranteed annual rental revenue which is non-taxable. Plus, property appreciation is high, as much as 25% per annum.

Buying property in all-inclusive hotel resorts guarantees rental returns throughout the year as tourism continues to grow at breakneck speed. Also, hotels are currently signing contracts with villa and apartment complexes to expand both their room capacity and provide accommodation to their employees. Thus, dynamic rental management companies can guarantee very attractive tax-free rental revenue to you, the owners of these properties. These contracts are renewable (and generally renewed) on a yearly basis.

Financing is available with international and Dominican banks. This is usually arranged by the company selling or promoting property. Generally, the buyer pays 10% of the property value as a down-payment, the bank finances 80% of the property value over 10 years, and the annual interest rate is about 10%. There are also international mortgage companies in the D.R. through which you can finance your Dominican Republic property.

The banking system is highly regulated and security is deemed good.

If you would like to find out more about property investment opportunities in Dominican Republic and how Bachata Properties can help you, please contact us.