{"id":11562,"date":"2025-06-29T21:41:36","date_gmt":"2025-06-29T21:41:36","guid":{"rendered":"https:\/\/dmklawyers.com\/?p=11562"},"modified":"2025-06-29T21:41:38","modified_gmt":"2025-06-29T21:41:38","slug":"61-of-the-inputs-used-by-free-zones-come-from-the-united-states","status":"publish","type":"post","link":"https:\/\/dmklawyers.com\/en\/61-of-the-inputs-used-by-free-zones-come-from-the-united-states\/","title":{"rendered":"61% of the inputs used by free zones come from the United States"},"content":{"rendered":"\n<p><strong>In 2024, 61% of Raw Materials Used by Dominican Free Zones Came from the United States<\/strong><\/p>\n\n\n\n<p>During the year 2024, 61% of the raw materials imported for the operations of free zones in the Dominican Republic originated from the United States, consolidating its role as the main supplier of inputs to the country&#8217;s export-oriented industrial sector.<\/p>\n\n\n\n<p>This proportion reflects a strong dependence on the U.S. market for the supply of intermediate goods for local manufacturing destined for international markets. China ranked second as a country of origin, though with a significantly lower share of 10%. Italy followed with 9.1%, positioning Europe as a relevant but still distant player compared to North America&#8217;s leadership. Puerto Rico contributed 3%, while other countries each accounted for less than 2%.<\/p>\n\n\n\n<p>Ecuador (1.8%), Mexico (1.4%), Germany (1.2%), and Honduras (1.0%) were among the main suppliers after the top three. Countries with shares below 1% included South Africa (0.9%), Brazil, Indonesia, and Spain (each with 0.7%), and Colombia, South Korea, India, France, and Nicaragua (each with 0.5%). This information comes from a review by&nbsp;<em>elCaribe<\/em>&nbsp;of data from the National Council of Export Free Zones, published in its 2024 report released earlier this week.<\/p>\n\n\n\n<p>Notably, only 0.4% of raw materials came from the Dominican Republic, indicating a very limited integration of domestic inputs into the free zones\u2019 production chains. This figure was matched by the Philippines, Turkey, and the Netherlands and surpassed by Guatemala, Taiwan, Argentina, Haiti, and Costa Rica (each with 0.3%).<\/p>\n\n\n\n<p>El Salvador, the United Kingdom, Malaysia, Japan, and Canada each contributed 0.2%, while the \u201cother countries\u201d category\u2014not listed individually\u2014accounted for 2.1%, highlighting the diversity of sources, though with low relative weight.<\/p>\n\n\n\n<p><strong>Company-Level Analysis<\/strong><\/p>\n\n\n\n<p>In 2024, a total of 579 free zone companies imported raw materials from the United States, representing an increase of 11 companies compared to 2023. Although the year-over-year increase is not dramatic, it reaffirms the strength of the commercial link between Dominican free zones and the U.S.<\/p>\n\n\n\n<p>Conversely, China experienced the largest absolute drop in this category: 497 companies imported from China in 2024, down from 581 in 2023\u2014a decrease of 84. This drop suggests a significant adjustment in sourcing strategies, potentially driven by logistics costs, strategic diversification decisions, or geopolitical factors.<\/p>\n\n\n\n<p>Despite accounting for a very low percentage of raw material origin, the Dominican Republic recorded a significant increase: 234 companies sourced domestically in 2024, compared to 209 in 2023, representing a rise of 25. Other countries that saw an increase in companies supplied include Spain (+15), Germany (+17), Puerto Rico (+8), the Netherlands (+14), Belgium (+17), and Panama (+13).<\/p>\n\n\n\n<p><strong>Countries Losing Ground<\/strong><\/p>\n\n\n\n<p>Among the countries that lost ground in terms of companies supplied were Canada (-29), Taiwan (-16), Japan (-17), El Salvador (-12), Chile (-11), and Pakistan (-9). While these figures do not reflect the volume of imports, they do show a clear redistribution of sourcing decisions by companies.<\/p>\n\n\n\n<p>One of the most notable changes occurred with Sri Lanka, which went from supplying 22 companies in 2023 to 79 in 2024\u2014an increase of 57. Growth was also observed in the use of raw materials from Guatemala (+10), Turkey (+10), Thailand (+14), and the Czech Republic (+8), indicating a diversification pattern toward new markets.<\/p>\n\n\n\n<p>The number of companies that relied on \u201cother origins\u201d decreased from 213 in 2023 to 194 in 2024, a drop of 19. Taken together, these figures not only identify the most relevant countries of origin for raw materials but also reflect the dynamic adjustments in the logistics and commercial strategies of free zone enterprises.<\/p>\n\n\n\n<p><strong>Free Zones as a Strategic Pillar of Economic Growth<\/strong><\/p>\n\n\n\n<p>The free zone sector remains one of the strategic pillars of economic and social growth in the Dominican Republic.<\/p>\n\n\n\n<p><strong>Service Contributions<\/strong><\/p>\n\n\n\n<p>In 2024, free zone companies paid a total of RD$23.3545 billion for services, distributed as follows:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Social Security: RD$14.7697 billion<\/li>\n\n\n\n<li>Electricity: RD$6.4132 billion<\/li>\n\n\n\n<li>Telecommunications: RD$1.3398 billion<\/li>\n\n\n\n<li>INFOTEP: RD$613.7 million<\/li>\n\n\n\n<li>Water supply: RD$218.1 million<\/li>\n<\/ul>\n\n\n\n<p>These payments correspond to the contributions made by free zone companies and industrial parks to various public and private institutions in exchange for services received.<\/p>\n\n\n\n<p><strong>New Company Approvals and Economic Impact<\/strong><\/p>\n\n\n\n<p>In 2024, 74 new companies were approved in the free zone sector, with a projection of 7,086 direct jobs, estimated investments of US$196.0 million, and foreign exchange generation of US$103.1 million. These data reflect the continued dynamism and growth of the sector, further consolidating its impact on the national economy.<\/p>\n\n\n\n<p><strong>Leading Sub-Sectors<\/strong><\/p>\n\n\n\n<p>The sub-sector with the highest number of companies approved in 2024 was Tobacco and its derivatives, with a total of 18 companies, followed by Call Centers (15), Services (8), Apparel and Textiles (6), Electrical and Electronic Products (5), and Medical and Pharmaceutical Products (4), among others.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In 2024, 61% of Raw Materials Used by Dominican Free Zones Came from the United States During the year 2024, 61% of the raw materials imported for the operations of free zones in the Dominican Republic originated from the United&#8230;<\/p>\n","protected":false},"author":9,"featured_media":11560,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":""},"categories":[149],"tags":[],"class_list":["post-11562","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment-in-dr"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>61% of the inputs used by free zones come from the 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