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  • By LAC Blog
  • Friday 29, July 2022

Looking for a foothold in both the Caribbean and Latin American markets? Exporting to the Dominican Republic could be your answer.

It is not considered the ‘hub’ of the Caribbean for nothing. The Dominican Republic enjoys a fast-growing economy, a free market, a booming tourism sector, and quality transportation infrastructure.

It could also prove to be your home-from-home. North American products are popular and highly regarded in the Dominican Republic, with additional demand fuelled by the many thousands of U.S. vacationers.

Want to know more? Trust Latin American Cargo to get you started. We have the experience and know-how to export your goods to the Dominican Republic in the most efficient way possible.

Business opportunities to consider when exporting to the Dominican Republic

The Dominican Republic is attractive to exporters for many reasons:

  • Its economic strength. It is the largest market in the Caribbean and Central America and has one of the region’s most stable and fastest growing economies, increasing 12.3% in 2021.
  • Its strategic location. The Dominican Republic is widely considered the ‘hub’ of the Caribbean, with its modern shipping and port infrastructure capitalizing on its position on key trade routes that link North and South America and the Far East with Europe.
  • Other benefits it offers, including free trade zones, a well-established and growing tourism sector, good infrastructure, improved telecommunications, and competitive labor costs.

The Dominican Republic’s Free Trade Agreements

In terms of trade incentives, U.S. exporters have gained a significant advantage in the Dominican market thanks to the CAFTA-DR free trade agreement – a bilateral agreement between the USA and the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.

Since 2016, tariffs have been removed on 97% of goods imported from the U.S. It has also simplified the customs process.

The Dominican Republic also benefits from free trade agreements with:

More trade agreements are currently being negotiated, including one with Curacao which also recognizes their desire to be strategic tourism partners.

Meanwhile, despite being in negotiations on a free trade agreement since 2007, Canada and the Dominican Republic are yet to reach a consensus. However, Dominican exporters to Canada can still benefit from its General Preferential Tariff System.

Key sectors for exports to the Dominican Republic

So what are the key areas for trade? The Dominican Republic is the top tourist destination in the Caribbean, with more than six million visitors each year. This naturally creates opportunities for exporters in construction, hotel and restaurant equipment, agricultural products, and other sectors supporting the tourism industry.

Other exporting opportunities arise from the U.S. and Dominican Republic’s close ties and shared culture. In 2018, U.S. tourists made up more than a third (39.8%) of all foreign vacationers, and Dominicans frequently travel to the States. There is a high demand for U.S. products which have a reputation for quality.

Key sectors for exports to the Dominican Republic include:

Top exports to the Dominican Republic

As one of the key economies in the Caribbean and Central America, the Dominican Republic has healthy import and export markets.

The USA is its largest trade partner, with the Dominican Republic importing $10.7bn of U.S. goods in 2021. Meanwhile, the U.S. is the destination for more than half (56%) of Dominican goods exports.

In terms of goods traded, fuels top the Dominican Republic’s import list, with gold, medical instruments, and bananas as its most significant exports.

The following are the primary exports to the Dominican Republic in 2021, according to the United Nations COMTRADE database, compiled by Trading Economics:

  1. Mineral fuels, oils, and distillation products ( $4.26B)
  2. Plastics ($2.10B)
  3. Motor vehicles, trucks, and cars ($1.92B)
  4. Machinery and mechanical appliances ( $1.92B)
  5. Electrical and electronic equipment ( $1.76B)
  6. Pharmaceutical Products ($1.27B)
  7. Iron and Steel ($1.04B)
  8. Precious stones and metals ( $880M)
  9. Paper and articles made of pulp ($720M)
  10. Cereals ($662M)

Alongside the U.S. (44%), other key trading partners include China (15%), Mexico (3.6%), Brazil (3.4%), and Spain (2.9%).

Perhaps surprisingly, the small European country of Switzerland is the Dominican Republic’s second-largest export market with an 8.2% share. This is fuelled predominantly by its demand for gold.

Challenges to consider when exporting to the Dominican Republic

The Dominican Republic offers many trade opportunities. However, it is crucial to inform yourself of possible challenges that this market may present. A few of them are:

  • Notable poverty and inequality
  • Corruption and transparency issues, including concerns over Government procurement procedures
  • Disruptions in fuel supplies and frequent blackouts – a result of industry-level accounting and subsidy issues
  • Bureaucracy slowing down decision-making and legislative approvals
  • Instances of products being misclassified or subject to non-standard customs valuations potentially off-setting CAFTA-DR benefits for the importer.

Import restrictions and prohibitions

The Dominican Republic has few restrictions on imported goods which is encouraging for importers.

  • Automobiles or motorcycles more than five years old
  • Good vehicles five tons or over (e.g., pick-up trucks) more than 15 years old
  • Used clothing, although enforcement is rare
  • Used household appliances

Do be aware that some goods – including all agricultural and dairy products – are subject to import licenses and may be restricted if they are competing with domestic products.

If you need clarification on rules and guidance relating to your product, we advise seeking the services of a reputable customs broker.

Ship your exports to Dominican Republic by the Multimodal Port of Caucedo

Located east of Santo Domingo, the Caucedo multimodal terminal is the main port of the country. Copyright: 320-ROC

Export to the Dominican Republic: Customs Clearance

As the Dominican Republic is signed up to the Central American Uniform Customs Code, the customs process and documents will be familiar if you are already doing business in the region.

The Dominican permit and certification requirements are generally straightforward compared to other countries in Central America and the Caribbean. That said, some exporters have reported delays and bureaucracy in obtaining documentation from Dominican officials, slowing their route to market. However, the situation is improving.

Customs Duties

If you are a U.S. exporter, you will likely be attracted to the Dominican Republic’s ‘no tariff’ stance on a vast array of goods, thanks to the CAFTA-DR free trade agreement.

The agreement allows all U.S. consumer and industrial goods to enter duty-free. The same applies to textile and apparel goods that meet CAFTA-DR’s origin requirements.

In addition, most U.S. agricultural products can enter duty-free, with remaining tariffs due to be phased out over the next few years. Tariffs on chicken leg quarters, certain dairy products, and rice will be eliminated by 2025.

Interestingly, some agricultural products subject to the tariff phase-out can already enter duty-free if they meet set quantity limits. These include non-fat dry milk and yogurt.

For non-U.S exporters, the situation varies. EU exporters currently benefit from low or no tariffs thanks to the CARIFORUM-EU agreement and duties on EU exports are due to be phased out gradually by 2033. However, EU goods that could threaten local production will still be subject to restrictions

If you are exporting to the Dominican Republic from a country without a trade agreement, such as Canada, you will be bound to the tariff structure and standards of the World Trade Organization, with some exceptions (sugar, garlic, rice, corn, onions, chicken, pork and milk powder). Tariffs range from zero to 40% with an added customs fee of 0.4% of the cost, insurance, and freight (CIF) price.

Finally, be aware that luxury or ‘non-essential’ goods entering the Dominican Republic – even from CAFTA-DR and CARIFORUM-EU countries – are subject to an excise tax of between 15 and 60%. It applies to vehicles, perfumes, alcoholic drinks, jewelry, and tobacco.

Visit the Dominican Republic’s official Customs Portal for more information about customs duties.

Imports requirements and documentations

Many documents required for exporting to the Dominican Republic should already be familiar to North American exporters, such as:

  • Commercial Invoice
  • Bill of lading
  • Phyto or zoo-sanitary certificates for live plants and agricultural material. They must be issued by recognized authorities in the country of origin.
  • Certification to support eligibility for preferential CAFTA-DR tariff, e.g., tariff classification and proof of origin.

If you are exporting agricultural and pharmaceutical products to the Dominican Republic, you will need to provide some additional documentation for safeguarding or to ensure they are market-ready:

  • Import licenses – for pharmaceutical products (drugs, cosmetics, skincare, and cleaning products), agricultural products, and agro-chemicals.
  • Sanitary Register – for each pharmaceutical trademark/product. It must be obtained from the Ministry of Public Health and is valid for five years.
  • Veterinarian documentation to show animal imports are disease-free.
  • Spanish language label – attached at origin for all consumer-ready food imports. It should include product name, ingredients, net and drained weight (metric), Dominican Industrial and Sanitary registration number, usage instructions, and name and address of manufacturer and/or distributor.

And while not compulsory, it may be beneficial to seek the ‘Seal of Compliance‘ for your product to demonstrate that it meets Dominican quality standards. INDOCAL provides product certification, requiring proof that an internationally accredited laboratory has tested and approved your product. The organization also leads on product labeling and marking.

Modes of transportation to and within the Dominican Republic

The Dominican Republic’s extensive transport infrastructure is a major advantage for exporters.

In 2019, the World Economic Forum’s Global Competitiveness Report ranked the Dominican Republic’s transport infrastructure as one of the highest in Latin America, highlighting its 12 ports, nine international airports, and more than 20,000km of highways and roads.

Maritime Facilities

The Dominican Republic’s ports are vital for its economic success, with 90% of the country’s imports arriving by sea.

Caucedo, on the south coast, is the Dominican’s largest, newest, and most strategically placed port. It is a container port and international distribution point, located less than 40km from the capital Santo Domingo.

Its coastal location and enviable facilities attract sea traffic on north-south and east-west routes. In 2018, it processed 1.3 million 20-foot equivalent units (TEUs) and will soon have even greater capacity through a $200m upgrade.

Meanwhile, just 15km from the capital is Rio Haina – the country’s second major multimodal port designed for handling containerized, RORO, and breakbulk cargo. Set on the banks of the river from which it takes its name, it processes 400,000 TEUs annually. It is also developing climate-controlled warehousing – the first of its kind in the Dominican Republic.

Other key ports include Santo Domingo – a popular choice for RORO vehicle transportation –, and Puerto Plata – the biggest port on the Dominican’s north coast. It is versatile, handling containers, general cargo, bulk cargo, fuels, and welcoming tourist cruises.

Airport infrastructure

The Dominican Republic is also well served for air freight, with Santo Domingo – Las Américas International Airport its main cargo airport. Operated by VINCI Airports and AERODOM, Las Américas – together with five other Dominican airports in the group – is one of the busiest cargo hubs in the Caribbean and Central America, handling more than 80,000 tons of air freight in 2021 – 15% more than the previous year. Santo Domingo – Las Américas new cargo terminal will expect to increase this volume even further.

Road network

Regarding highways, the Dominican road network is amongst the best in Latin America. Investment has been significant since the start of the tourism boom in the 1980s, with roads, airports, and docks all benefitting. Well-maintained roads connect Santo Domingo with the north coast, the Haitian border, and the eastern tourist resorts.

That said, roads in more rural areas are often low quality, poorly maintained, and susceptible to the effects of tropical storms. There are plans to improve regional connectivity, especially in more remote communities, including through a $140 million loan from the Inter-American Development Bank (IDB)

Rail transport

Finally, in contrast to most other Caribbean and Central American countries, the Dominican Republic has a functioning freight and passenger rail network. It is, however, limited, with the remaining branches concentrated around San Pedro and La Romana. Meanwhile, Santo Domingo is served by a metro rail system that opened in 2008 and is set for expansion. Santiago de los Caballeros – the Dominican Republic’s second-largest city – will soon also have its own light rail system.

Export to the Dominican Republic now!

Does the Dominican Republic sound like your kind of market? Trust us to help you enter it with stress-free shipping.
We have freight forwarding services to meet your needs, whatever your product, and whatever your requirements.
Latin American Cargo is your specialist Dominican Republic logistics partner. Contact us now!

 

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