The Dominican Republic is one of the main recipients of foreign direct investment (FDI) in the Central American and Caribbean region, with an annual average of around US$2.585 billion in the last twelve years.
The official statistics from the Dominican Central Bank (BC) indicate that last year the country attracted US$3,085 million in FDI, the third highest level to date since 2010, exceeded only by US$3,142.4 million in 2012 and US$3,570.7 million in 2017.
The fact that the Dominican Republic remains an attractive country for foreign investment, even in the midst of the effects of the COVID-19 pandemic, is a sign of the confidence that inspires the nation abroad.
President Luis Abinader stated as such in his State of the Nation speech during the Joint Meeting of the National Congress on February 27. The president stressed that the measures of greater transparency in the public administration and better management of spending have improved the country’s position in the eyes of the risk rating firms, which bodes well among foreign investors interested in both public debt and doing business here.
THE BIGGEST INVESTOR
Although the Dominican Republic is a country open to investment from any friendly country, the United States accounts for the greatest amount of foreign capital for business.
Figures indicate that from 2010 to 2021 the Dominican Republic received foreign investments worth US$31,020 million, of which at least US$7,433.7 million (as of September 2021) is from the United States, representing 24% of the capital, i.e., almost a quarter.
Second on the list in terms of private investment in the Dominican Republic is Canada, with a cumulative amount of US$4,908.1 million in the last twelve years.
* Foreign Direct Investment per country of origin. Figures in US$ millions. From 2010 to Sept.2021.
Among others, Barrick Pueblo Viejo allocated a significant part of this investment to the Cotuí gold mine, in Sánchez Ramírez province. Brazil is third on the list of source countries with foreign investments in the country with US $ 2,350 million accumulated. As well as Brazilian investments in the metallurgical area, especially rods, much of Brazil´s foreign investment is attributed to setting up the company Ambev here, which acquired the majority of shares in the Dominican National Brewery (CND).
The fourth country issuing investments to the Dominican Republic is Spain, with an accumulated contribution of US$2,035.2 million. The largest local investment from that nation is in the tourism sector.
ECONOMIC WEIGHT
In addition to being among the main generators of foreign exchange and taxpayers for the State, it is estimated that foreign-invested enterprises in the country account for around 35% of the gross domestic product (GDP).
FDI also plays an important role in the Dominican exports, contributing around 70% of total local sales abroad. This is because most of the exported goods are produced by free zone companies, which are more than 75% owned by foreign investors.
* Annual Foreign Direct Investment in DR. Figures in US$ millions. Source: Central Bank and ProDominicana.
The economic areas where the greatest foreign investment is focused are trade, mining, tourism, and the real estate sector, which covers both the construction of housing in urban areas, as well as projects also linked to retirement tourism.
These are followed by the free zones and electricity sectors, where most of the generating companies are foreign.
In addition to its impact in terms of job creation, purchase of goods and services from local companies or suppliers, and revenue, according to official figures, annual foreign investment averages about 4% of the size of the economy measured by GDP.
FOREIGN EXCHANGE DESK
Foreign direct investment is the fourth leg of the Dominican foreign exchange collection table, but it has an impact on two of the remaining three.
In 2021, remittances accounted for US$10,402.5 million of the country´s foreign exchange collection, exports of domestic products and free zones totaled US$11,831.5 million, tourism brought in US$5,680.6 million, while FDI accounted for US$3,085.3 million. Many of the companies in both tourism and exports are foreign invested.
Source:
El Dinero
