Tax advantages of the Dominican Republic

The Dominican Republic has emerged as an attractive destination for international investors — especially those from Spain. Its combination of economic stability, tax incentives, and a favorable legal framework positions it as a strategic country for business expansion and capital diversification.

Taxation in the Dominican Republic: what investors should know

One of the main reasons Spanish entrepreneurs choose to invest in the Dominican Republic is the existence of an Agreement to avoid double taxation and prevent tax evasion, signed between Spain and the Dominican Republic in 2011 and in force since 2014.

This agreement allows:

• Eliminating double taxation on income generated in both jurisdictions.
• Regulating the taxation of income, dividends, and capital gains.
• Ensuring a transparent tax framework, preventing tax evasion and guaranteeing the legality of international operations.

Tax incentives and advantages for foreign investors

Despite the existence of structured taxes, Dominican legislation has developed multiple tax incentives to encourage investment, especially in key sectors such as tourism, construction, and renewable energy.

Some of the main advantages for foreign investors include:

• Income tax exemptions of up to 15 years on qualifying tourism projects, under the country's investment incentive regimes.
• ITBIS (VAT) and tariff exemptions on the import of goods and materials for real estate projects.
• Facilities for the repatriation of capital and dividends, with no restrictions on fund mobility.
• Tax benefits for rentiers and retirees who establish residency in the country.

The Dominican Republic and its tax reform

The Dominican tax system is in constant evolution to ensure its competitiveness and sustainability. Currently, changes are being driven within the tax reform in the Dominican Republic, whose objective is to improve collection efficiency and broaden the tax base without affecting foreign investment.

In addition, the tax burden in the Dominican Republic remains at competitive levels within the Caribbean region, ensuring a balance between economic growth and state collection.

The Dominican Republic: a growing investment destination

With foreign direct investment that exceeded US$4.39 billion in 2023, the Dominican Republic continues to consolidate itself as the main investment recipient in the Caribbean.

The real estate sector is one of the most dynamic, with innovative projects like Larimar City & Resort, which offer high profitability opportunities in a market in full expansion.

In conclusion, the combination of tax incentives, legal stability, and a growing economy makes the Dominican Republic a strategic destination for Spanish investors. Despite its tax appeal, the country is not a tax haven — it has a structured tax system that's constantly being updated.

The ongoing tax reforms seek to improve the system's efficiency without affecting the arrival of foreign capital, which makes it a safe and profitable destination for real estate and business investment.

If you want to learn more about the investment opportunities at Larimar City & Resort, consult with our experts.

Contact us at info@larimarcity.com

By Macarena Perona

Deputy Director

Larimar City & Resort