The Dominican Republic Offers Investors an Attractive Proposition
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The Dominican Republic offers investors an attractive proposition with a stable and growing economy, world-class infrastructure and a strong inflow of foreign investment Largest open economy in the Caribbean Fastest growing economy in the Caribbean Stable and growing economy offers a GDP (nominal, 2016, $bn) GDP growth (nominal, 2015 – 2016, yoy %) compelling investment environment 72.2 5.9% . Largest and fastest growing open 5.0% economy in Caribbean 4.4% 3.8% . Significantly larger economy and land 3.3% mass than other Caribbean islands, supporting a more diversified economy 21.0 . Proximity to large markets (9 14.0 8.9 8.3 10.6 international airports with 70+ daily 0.5% flights to North America and Europe) Superior infrastructure with continued Haiti & Rep. Rep. government and foreign investment Jamaica Grenada Rest of Rest Tobago Barbuda average Bahamas Barbados Antigua Antigua & Caribbean Caribbean Trinidad & Trinidad Dominican Dominican St. St. Vincent . High level of government investment in Grenadines tourism-related infrastructure – National highway network has Recipient of almost half of all foreign investment inflows into the Caribbean undergone a significant upgrade – Multi-million dollar restoration to 48% 16% 11% 8% 5% 13% by country of origin by destination sector Santo Domingo’s colonial district 2,407 . Principal FDI recipient in the FDI inflows 2016 (US$m) 20% 17% Caribbean, with a well-diversified % of total Caribbean source of funds 47% 13% 15% . A number of countries who have 69% historically invested more heavily in 12% 790 2%5% 617 other parts of the region are beginning 522 406 to focus on the Dominican Republic 228 – In 2017, the UK announced it had allocated £500m to invest in Canada United States Natural resources infrastructure projects in the Spain Mexico Manufacture Dominican Republic Rep. Jamaica Rest of Rest Tobago Bahamas Barbados Italy Other Services Caribbean Trinidad & Trinidad Dominican Sources: Foreign Direct Investment in Latin America and the Caribbean 2017 (ECLAC); Trading Economics; Caribbean Tourism Organization (CTO); Dominican Republic Tourist Board Notes. Economic data shown for top five ranked Caribbean countries per category; data excludes Cuba 7 The Dominican Republic enjoys a highly favourable business environment based on its ‘ease of doing business’, competitive cost base and range of available investment incentives Outperforms region on ‘ease of doing business’ Highly competitive cost base Intrinsic characteristics inherent to the Dominican Latin America country create a favourable business Republic & Caribbean Bahamas $0.99 environment Setting up a company . Proximity to major markets and Barbados $0.94 excellent airports makes it easy to transport goods and people in and out Overall score 83.3 / 100.0 78.5 / 100.0 St. Lucia $0.71 . Abundant work force, including both Procedures (#) 7.0 8.3 non-skilled and highly skilled staff and Grenada $0.68 a large number of bilingual workers Time (days) 14.5 31.6 . Strong financial sector and well- St. Kitts & Nevis organized business community Registering property $0.67 Straightforward investment process Procedures (#) 6.0 7.1 Dominica $0.66 . Buying process is uncomplicated and without restrictions on foreign Time (days) 45.0 68.6 St. Vincent & $0.61 nationals (see Appendix C for further Grenadines detail) Cost (% value) 3.5 5.8 . Titles are fully owned and there is a Antigua & Barbuda $0.60 transparent legal framework in place Construction permits . Overseen by a notary, the property Belize $0.58 buying process generally takes 6 – 8 Overall score 75.2 / 100.0 65.7 / 100.0 weeks but can be accelerated Jamaica Building quality 13.0 / 15.0 8.4 / 15.0 $0.58 Competitive costs and range of investment incentives Cost of living Corporate taxation Trinidad & Tobago $0.56 indicator . Lowest cost base in the Caribbean (equivalent cost of bundle Payments (#) 7.0 28.9 Haiti . Investments in the tourism sector are $0.46 of goods & supported by the Tourism Incentive Act services 158‐01 and the Foreign Investment Act Admin (hours) 317.0 342.6 Dominican Republic $0.45 costing $1 in 16-95 (see Appendix C for further the US) detail) Rate (% profit) 42.4 46.3 Sources: Foreign Direct Investment in Latin America and the Caribbean 2017 (ECLAC); Trading Economics; Caribbean Tourism Organization; Dominican Republic Tourist Board; IMF World Economic Outlook Database; Doing Business Latin America and Caribbean 2017 (World Bank) 8 The Dominican Republic is the Caribbean’s leading tourist destination with a well diversified tourism source base and continued strong arrivals growth #1 tourist destination in the Caribbean in 2016 Americas continue to be key source markets Strongest tourism industry in the 6.4% 13.5% 2.8% 0.7% 6.7% 0.0% 25% 56% 5% 14% 0% Caribbean 11% 4% 16% 4% 6% 6.0 . The Dominican Republic attracted 37% 2.9 of all non-resident tourism stop-over Tourist stop-over arrivals (m) Origin of arrivals (m) (air) arrivals in the Caribbean in 2016, 4.0 Growth (yoy %) % contribution bringing in $7.0bn in tourism receipts Growth (yoy %) 2.2 1.3 . Growth continued in 2017, with a 6.5% 1.9 1.5 increase between January and June 0.7 0.6 . The Ministry of Tourism is targeting ten 0.2 0.0 million stop-over arrivals by 2020, and invests ~$50m annually on promotion in international markets Cuba North South Europe Jamaica America America Rest of Rest Central Bahamas Barbados Republic of World Caribbean Caribbean America & America . Cruise arrivals have also shown strong Dominican Asia & Rest Asia & growth, up 52% in 2016 Secret to success lies in inherent Arrivals have exhibited steady historical growth Visitor spending is significantly above region characteristics of the country which give it a sustainable competitive advantage 2010 – 2016 . Surrounded by the Atlantic Ocean to its +44% growth 6.0 7.0 north and the Caribbean Sea on its 5.6 south, the lush tropical island paradise 5.1 4.6 4.7 boasts 1,600+ km of coastline, and its 4.1 4.3 sandy-white beaches, diverse landscape, and colonial history attracts 2.8 visitors from around the world 2.6 2.5 . Largely bilingual population caters to 1.2 1.4 all key source markets, and positions the Dominican Republic as the destination of choice for tourists from Central & South America and the 2010 2011 2012 2013 2014 2015 2016 Cuba Caribbean who are more comfortable Rep. Jamaica average Bahamas Barbados Caribbean with a Spanish speaking destination Dominican Sources: Asociación Nacional de Hoteles y Restaurantes (ASONAHORES); Economic Commission for Latin America and Caribbean (ECLAC); RBC Caribbean Economic Report June 2015; Caribbean Tourism Organization (CTO); Dominican Republic Tourist Board Notes. ‘Tourist stop-over arrivals’ is calculated as number of non-resident arrivals by air, cruise ship arrivals and resident arrivals are not taken into account 9 The Dominican hotel industry continues to show strong growth with above average occupancy rates and a number of prestigious resorts recently opened or under development Strong growth in occupancy rates with consistent outperformance versus the broader region Continued growth of the hotel industry Dominican Republic hotel occupancy rates Caribbean hotel occupancy rates . Investment in tourism infrastructure continues to pour into the country, 2012 – 2016 2012 – 2016 68.3% 78.0% 68.0% with a number of resorts and hotels +11% growth +0.6% growth planned or currently being developed 75.5% – In 2016, 5,500 new rooms entered 74.8% 67.1% the market with another 6,500 under 66.7% 71.7% construction at year end 66.3% – In the first half of 2017, 69 new 70.3% hotel projects were approved, which could add an additional 8,000 rooms . Despite the strong increase in hotel rooms, occupancy levels continue to 2013 2014 2015 2016 2012 2013 2014 2015 2016 rise and remain significantly above the 2012 Caribbean average – In 2017, occupancy increased to Lowest hotel construction costs in the Caribbean Several high-end resorts have recently opened 87%, with the Puerto Plata region showing 90% occupancy levels $ per sqm Mid market – high Luxury Antigua & Barbuda 2,900 – 4,600 3,300 – 5,900 North Coast in the spotlight Bahamas 2,200 – 6,200 2,800 – 7,400 . A number of high-end resorts are being Barbados 2,300 – 3,700 2,700 – 4,500 (re)developed on the North Coast, Cuba 2,700 – 4,000 3,000 – 4,700 2017: Punta Cana 2017: Punta Cana which will greatly boost the prestige Dominica 2,400 – 3,100 2,700 – 3,500 and visibility of the area Dominican Rep. 1,600 – 3,200 1,900 – 3,900 – The 2015 opening of Aman Resorts in Playa Grande put the North Coast Grenada 2,700 – 3,600 2,900 – 3,900 ‘back on the map’ for luxury tourism Haiti 1,500 – 2,300 2,000 – 2,900 – The ongoing $1 billion development Jamaica 2,100 – 3,100 2,600 – 3,900 of a new Discovery resort at Playa St. Kitts & Nevis 3,000 – 4,200 3,400 – 5,200 Grande represents the largest St. Lucia 2,900 – 3,600 3,400 – 4,300 2017: North Coast 2015: North Coast tourism investment ever undertaken St. Vincent & Gren. 2,300 – 2,900 2,500 – 3,300 Billion dollar First Aman Resorts with in the Dominican Republic Trinidad & Tobago 2,500 – 3,500 3,100 – 4,300 development underway integrated golf course Sources: Economic Commission for Latin America and Caribbean (ECLAC); Trading Economics; Caribbean Tourism Organization (CTO); Dominican Republic Tourist Board; Ministry of Tourism Dominican Republic; Whitebridge Hospitality Latin American & Caribbean Hotels Monitor May 2017 10 The North Coast of the Dominican Republic is well-established with tourists and expats and will continue to grow in desirability on the back of ongoing infrastructure investments North Coast airports receive high inflow North Coast renowned as a top destination North Coast is popular with both tourists and Non-resident stopover arrivals by airport (2016) Best Places to Travel in 2015 expats looking to live part- or full-time in the DR Puerto Plata .