This chapter analyses the institutions, policies and regulations that shape the Dominican Republic’s advanced manufacturing ecosystem. Drawing on desk research and stakeholder interviews, the chapter examines challenges and opportunities relating to the country’s institutional framework, free zone regime, business environment, science, technology and innovation ecosystem, and infrastructure.
Review of the Dominican Republic's Enabling Environment for the Semiconductor and Microelectronics Industries
Abstract
This chapter analyses the institutions, policies and regulations that shape the Dominican Republic’s advanced manufacturing ecosystem. It is divided into five sections – the institutional framework; the free zone regime; the business environment; science, technology and innovation; and infrastructure – and each section contains recommendations to support the development of semiconductor and microelectronics industries in the Dominican Republic. In this way, this chapter provides the evidence and policy analysis to substantiate the recommendations summarised in Chapter 1.
3.1.1. Co‑ordination across institutions
The institutional framework for the Dominican Republic’s emerging semiconductor ecosystem was first outlined in Presidential Decree 324-24 (henceforth, the Decree). Issued in June 2024, the Decree classifies the development of a semiconductor industry as a high national priority and aims to position the Dominican Republic as a strategic, competitive and trusted location for semiconductor firms and foreign investment. The Decree commits to publishing a National Strategy for the Promotion of the Semiconductor Industry (henceforth, the National Semiconductor Strategy), which was launched in August 2025. The National Semiconductor Strategy is structured around five pillars: industrial development; governance; workforce and human capital; country promotion; and strategic partnerships. The Dominican Republic engaged with the OECD in developing certain sections of the National Semiconductor Strategy, which was also informed by the analyses and recommendations contained in this report. See Box 1.1 in Chapter 1 for more details on the National Semiconductor Strategy.
The Decree also highlights the key role of the Ministry of Industry, Commerce and Micro, Small and Medium-Sized Enterprises (MICM), which is responsible for developing, implementing and evaluating the National Semiconductor Strategy. According to Article 3 of the Decree, the MICM must co‑ordinate all cross-sectoral initiatives and projects related to the semiconductor industry (Presidencia, 2024[1]). The MICM has a mandate for industrial development, manufacturing and foreign trade and is ultimately accountable for many of the government agencies with functions that are highly relevant to the semiconductor ecosystem (Table 3.1).
MICM-affiliated agencies with the potential to support the development of the semiconductor ecosystem
Note: In total, the MICM organigram lists 14 affiliated agencies.
Source: MICM (2024[2]), Organigrama, https://micm.gob.do/wp-content/uploads/2024/10/organigrama_micm_2024.pdf.
While the MICM and the relevant expertise of MICM-affiliated agencies are key for the development of the National Semiconductor Strategy and implementation of the government’s semiconductor policy, many other institutions will play an important role in supporting the development of the semiconductor ecosystem (Table 3.2).
Note: This table lists the agencies which are expected to have a significant role in the development of the Dominican Republic’s semiconductor ecosystem. This list is not intended to be exhaustive; other agencies are also likely to contribute.
Given the breadth of the agencies listed in Table 3.2, the MICM is likely to require some form of support to co‑ordinate these agencies’ perspectives and expertise into coherent cross-government semiconductor policy. Internationally, other countries recognise the need for strong inter-institutional co‑ordination in relation to semiconductor policy, for example Panama’s Commission for Innovation in Microelectronics and Semiconductors or Viet Nam’s National Steering Committee for Semiconductor Industry Development (MICI, 2024[3]; Government of Viet Nam, 2024[4]).
Domestically, the Dominican Republic has two recent precedents for establishing mechanisms for successful cross-governmental co‑ordination in other policy areas: Decree 71-21 created the Cabinet for Digital Transformation to co‑ordinate the implementation of the Digital Agenda 2030 and Decree 464-21 created the Innovation Cabinet to co‑ordinate the National Innovation Policy 2030 (Presidencia, 2021[5]; 2021[6]). These two cabinets could serve as models for the co‑ordination mechanism for the National Semiconductor Strategy.
In contrast, the case of the Dominican Republic’s former Strategic Plan for Science, Technology and Innovation 2008-18 (PECYT+I) illustrates the risks that arise from a lack of central policy co‑ordination. The PECYT+I was a major whole-of-government initiative that required inter-institutional co‑ordination, just like the National Semiconductor Strategy. A single ministry, MESCyT, was given full responsibility for the implementation of the PECYT+I, similar to the MICM’s current role with respect to the National Semiconductor Strategy. However, MESCyT struggled to deliver the PECYT+I because the main policy levers and sources of funding were under the responsibility of other government agencies, without MESCyT having access to the structures to direct and co‑ordinate the actions of these other agencies. In evaluating the PECYT+I, the United Nations recommended developing a more effective co‑ordination mechanism between the various government institutions in the Dominican Republic (UNCTAD, 2021[7]).
Therefore, the Dominican Republic should create a formal co‑ordination mechanism to enable the MICM to design and deliver the National Semiconductor Strategy with the support of, and in close consultation with, a wide range of government agencies. If the Dominican Republic chooses to create a new cabinet, its membership should be restricted to a small number of government agencies to ensure effective and agile decision making. By way of comparison, the recent Cabinet for Digital Transformation was composed of 10 government agencies, named in Decree 71-21; the Innovation Cabinet was composed of 15, named in Decree 464-21.
The new cabinet’s functions could include the approval of National Semiconductor Strategy policies, implementation plans, budget, goals and indicators. It should be empowered to hire experts to form a technical secretariat to inform its decision-making process. As with the other cabinets, the new cabinet could be chaired by the President of the Republic, even if the running of the cabinet is delegated to the MICM. Such visible support from the president could further strengthen the MICM’s co‑ordinating capabilities and increase the National Semiconductor Strategy’s political capital.
The Dominican Republic should nevertheless give careful consideration to the scope of any new cabinet. On the one hand, a dedicated Semiconductors Cabinet could be too narrow, as the Dominican Republic does not yet have a semiconductor industry and there are risks associated with devoting resources to an unproven sector with an uncertain future. On the other hand, an Advanced Manufacturing Cabinet could be too broad as it would encompass a broad range of sectors with diverse requirements, even though the implementation of the National Semiconductor Strategy needs targeted policy support. A Microelectronics Cabinet could be a good compromise, as its scope would include semiconductors and other related industries, such as printed circuit boards (PCBs) which already have an emerging presence in the country. The scope of the cabinet should also be adaptable, in case policy priorities or industry trends evolve over time. For example, in 2023, the Cabinet for Digital Transformation and the Innovation Cabinet were merged into a new Cabinet for Innovation and Digital Development (Presidencia, 2023[8]). While it is important to futureproof the cabinet in this way, the Dominican Republic should also avoid the unnecessary creation and abolition of institutions as this could lead to policy instability.
In addition to strong co‑ordination within government, the National Semiconductor Strategy also requires effective collaboration with external institutions. Government collaboration with industry, academia and civil society would allow the Dominican Republic’s semiconductor policy to benefit from external expertise and secure their support. There is currently no formal channel for external input into the National Semiconductor Strategy, which is a gap that the Dominican Republic should address. The existing cabinet model could again provide a helpful precedent. The Cabinet for Digital Transformation and the Innovation Cabinet were supported by six and four working groups (mesas de trabajo) respectively that brought together government agencies, firms, business associations, higher education and research institutions, and civil society. For any new semiconductor-related cabinet, it would also be important to seek the perspective of labour representatives on how they could support the development of the semiconductor and microelectronics industries.
For the two previous cabinets, each working group focused on a specific policy area related to the cabinet’s mandate and developed concrete policy recommendations and implementation plans. The working groups presented their proposals to the cabinet, which voted on whether to adopt them and make them government policy proposals. Governmental and non-governmental stakeholders, interviewed for this report, praised the working groups as a means of increasing the structure and transparency of public-private engagement. Therefore, working groups – which might address themes such as R&D, human capital, infrastructure or investment – could also be created to support the new cabinet responsible for the National Semiconductor Strategy. Elsewhere in the region, Costa Rica has also formed cross-sectoral working groups to implement its Semiconductors Roadmap (COMEX, 2024[9]).
3.1.2. Alignment with other strategies
It is also important to align the new National Semiconductor Strategy with other government strategies. However, relevant government strategies published in recent years make no reference to semiconductors. These include the National Competitiveness Strategy (published in 2021), the Digital Agenda (2022), the National Innovation Policy (2022) and the National Artificial Intelligence Strategy (2023). While this is understandable – because semiconductors are a new area of focus for the Dominican Republic – better alignment with other strategies reduces the risk of policy contradictions, duplications or gaps. Therefore, the Dominican Republic should ensure that forthcoming strategies in related fields are consistent with the National Semiconductor Strategy and acknowledge that the semiconductor industry is a high national priority.
There are nevertheless encouraging signs from more recent strategy documents. For example, an outline of Objective DR 2036 (Meta RD 2036) – the Dominican Republic’s plan to double its gross domestic product (GDP) by 2036 – was published in late 2024 and suggests that semiconductors could be a priority sector (CNC, 2024[10]). The MICM Annual Operating Plan for 2025 – which sets the programme of work for each government agency for the year ahead – acknowledges the need for firms in the free zone regime to develop semiconductor skills and talent (MICM, 2024[11]). Other forthcoming strategies – including the National Multi-Year Plan for the Public Sector (Plan Nacional Plurianual del Sector Público) and National Multi-Year Plan for Public Investment (Plan Nacional Plurianual de Inversión Pública), revisions to the Digital Agenda and revisions to the National Pact for the Reform of the Electricity Sector – should also consider how they can contribute to the development of the Dominican Republic’s semiconductor ecosystem. Alignment of key government strategies with the National Semiconductor Strategy sends a clear signal to industry and prospective investors that semiconductors are a whole-of-government priority. Moreover, such alignment would help secure cross-government support for the National Semiconductor Strategy and act as an additional co‑ordination mechanism.
3.1.3. International collaboration
In parallel to co‑ordinating semiconductor policy across domestic institutions, the Dominican Republic should also co‑operate with international institutions. Co‑operation with like-minded countries would enable the Dominican Republic to both share its expertise and learn from best practice. There is already some evidence of international collaboration in the field of semiconductors. In 2024, the MICM signed a memorandum of understanding with Purdue University, based in the United States, to promote research and academic exchange opportunities in the fields of semiconductors and microelectronics (Purdue University, 2024[12]). In 2025, the University of the Caribbean (UNICARIBE) opened with US firm Keysight Technologies a Centre of Excellence in Santo Domingo aimed at developing skills in semiconductor technologies (UNICARIBE, 2025[13]). The Dominican Republic also hosted the Third Americas Partnership for Economic Prosperity (APEP) Semiconductor Symposium in 2025, with a focus on financial strategies in the semiconductor ecosystem. The APEP event brought together representatives from government, the private sector, financial institutions and international organisations (MICM, 2025[14]).
Building on this, the Dominican Republic should engage with a range of potential government partners to co‑ordinate semiconductor supply chains and develop complementary semiconductor policies. This type of intergovernmental collaboration already occurs amongst countries in other regions, such as the Semiconductor Coalition, launched in March 2025 by nine European Union members (EC, 2025[15]). An industry association interviewed for this project suggested that the Alliance for Development in Democracy (ADD), which the Dominican Republic founded alongside Costa Rica and Panama, could help to co‑ordinate regional semiconductor policies. In 2024, the ADD convened a dialogue on supply chains for medical devices; a future ADD meeting could focus on semiconductor supply chains, of particular importance given that the Dominican Republic’s semiconductor-related imports are highly concentrated from a small number of countries (see Section 2.2.1). Additionally, the Dominican Republic could use its membership of the Ibero-American Program of Science and Technology for Development (CYTED), which supports cross-country co‑operation in the fields of science, technology and innovation (STI), to work with others to strengthen the regional semiconductor industry. The Dominican Republic is also a participant in the OECD Semiconductor Informal Exchange Network, which promotes international collaboration and exchange of semiconductor market data and policy information.
3.1.4. Priorities for the National Semiconductor Strategy
Decree 324-24 outlines a bold vision for the Dominican Republic’s semiconductor industry, aiming to establish itself in every part of the value chain. While the Dominican Republic is right to be ambitious, the National Semiconductor Strategy must define its priorities. Clear prioritisation would strengthen the Dominican Republic’s institutional framework by allowing policymakers, industry, academia and other stakeholders to co‑ordinate and focus their resources on a logical entry point into the global semiconductor value chain, in a way that aligns with the Dominican Republic’s skills and industrial capabilities. Therefore, the Dominican Republic should prioritise specific segments of the value chain. In broad terms, there are three main segments of the semiconductor value chain: design; wafer fabrication; and assembly, testing and packaging (ATP) (see Annex A).
One possible priority segment is semiconductor ATP. ATP is relatively labour-intensive and, on average, less capital-, water- and electricity-intensive than front-end manufacturing (EC, 2023[16]). In this way, ATP could be a good fit for the Dominican Republic’s domestic context. ATP has also allowed other countries to integrate the semiconductor global value chain, such as Costa Rica or Malaysia. In the case of Malaysia, the country initially established itself as a global hub for semiconductor ATP, which strengthened its ability to move up the value chain. In recent years, firms such as Arm – which provides intellectual property (IP) cores used in the design segment of the value chain – and Infineon – an integrated device manufacturer (IDM) active in the wafer fabrication and ATP segments – have announced their intentions to establish a presence in Malaysia (Reuters, 2025[17]; Infineon, 2024[18]).
The National Semiconductor Strategy should view semiconductor ATP as a medium- to long-term objective, as it can take years for outsourced semiconductor assembly and test (OSAT) firms or IDMs to establish new ATP facilities. In the nearer term, the Dominican Republic could also focus on PCB manufacturing and assembly, as the country’s PCB industry is already beginning to emerge.
3.1.5. Policy monitoring and evaluation
Finally, Article 9 of the Decree also directs the MICM to establish a new unit to monitor the National Semiconductor Strategy’s progress. The MICM must ensure that this new monitoring and evaluation (M&E) mechanism is properly equipped – with both data and human resources – to support the strategy’s successful implementation. There are likely to be challenges: as set out above, semiconductor policy is a cross-government initiative, yet relevant datasets tend to be held by individual government agencies.
The Dominican Republic should break down these data silos by ensuring that the new M&E mechanism has access to firm-level and other highly granular data from the relevant agencies (including the National Statistics Office [ONE], the General Directorate of Internal Taxes [DGII] and the Central Bank of the Dominican Republic) to enable the effective monitoring of the National Semiconductor Strategy’s impact on the industry. This impact could be measured across a range of indicators, including firm performance (such as value added, productivity and export volumes), labour market dynamics (including employment generation, labour market mobility and changes in real wages), levels of investment (both domestic and foreign) and innovation outcomes such as R&D activity.
The ability to access and analyse these granular data – while preserving data privacy and confidentiality – is important for designing and adapting policy. In this way, the Dominican Republic would be in a stronger position to update the strategy on a periodic basis, if necessary, in accordance with Article 10 of the Decree. In addition to enhancing the micro-data infrastructure, the Dominican Republic should develop the analytical capabilities of the new M&E mechanism, for example by mapping its analytical needs and skills gaps and encouraging secondments from relevant institutions (OECD, 2023[19]).
The granular data and analytical skills required for conducting M&E of semiconductor policy are broadly similar to the data and skills required to monitor and evaluate other aspects of economic and industrial policy. There could therefore be a strong argument for broadening the scope of this new M&E mechanism beyond just the National Semiconductor Strategy and placing the mechanism at the centre of government, for example under the responsibility of the Ministry of the Presidency. This would be similar to the model of France Stratégie, which evaluates public policies and reports directly to the French prime minister.
In establishing the M&E mechanism, the MICM should follow best practice and give regard to the OECD Recommendation of the Council on Public Policy Evaluation, which suggests conducting policy evaluation with a systematic, whole-of-government approach, establishing quality standards and mechanisms for evaluations, and developing institutional skills and capacities to conduct, commission and use evaluations (OECD, 2022[20]).
Free zones have been at the core of the Dominican Republic’s industrial development for decades. The free zone regime refers to the firms and industrial parks which are overseen by the National Council of Free Zones (CNZFE) and benefit from tax exemptions and other advantages.1 Since the opening of the country’s first free zone industrial park in 1969, the regime has expanded to include 93 industrial parks and 843 firms by the end of 2024 (CNZFE, 2025[21]).
Most, but not all, free zone firms are located inside an industrial park. Of the 843 free zone firms, 651 – focused primarily on manufacturing – operate in an industrial park. Firms that are classified as belonging to a services free zone (73 firms) or a special free zone (119 firms) can, but do not have to, operate in an industrial park.2 Given the generous tax exemptions and provision of serviced industrial land, it is likely that a semiconductor or microelectronics firm that decides to establish itself in the Dominican Republic would choose to operate in a free zone industrial park.3 This section analyses how the free zone regime can support the development of the country’s semiconductor and microelectronics industries.
3.2.1. Free zone incentives
The free zone regime was formalised in 1990 by Law 8-90. Firms have many incentives to establish operations in the free zones, including simplified customs procedures (see Section 3.3.3) and support for workforce recruitment and development. Notably, firms in the Dominican Republic free zones are exempt from a wide range of taxes (Table 3.3). The tax exemptions last 15 years, with the possibility of renewal (see Section 3.2.2 for a discussion of the renewal process).
Source: OECD analysis of Congreso Nacional (1990[22]), Ley 8‑90 sobre Fomento de Zonas Francas, https://dgii.gov.do/legislacion/leyesTributarias/Documents/Leyes%20de%20Incentivos%20y%20Fomentos/8-90.pdf.
The eligibility criteria that firms must fulfil to be able to apply for a free zone operating permit are very broad. Article 4 of Law 8-90 states that, in theory, any firm can apply for an operating permit as long as they “contribute to the country’s development by increasing its production and generating employment”. Free zone firms should be export-oriented and, according to Article 13, “allocate their production and/or services for export purposes”, but the requirement that firms in the free zones export a minimum of 80% of their sales internationally was removed by additional legislation in 2007 and 2011 (Congreso Nacional, 2007[23]; 2011[24]).
The generous 100% tax exemptions and broad eligibility criteria have led to both advantages and, it could be argued, disadvantages for the Dominican Republic. On the one hand, the free zones and their incentives regime have been credited with driving much of the country’s growth and economic development in recent decades, supporting foreign direct investment (FDI) and job creation (World Bank, 2016[25]). Analysis in Section 2.2.2 shows that FDI inflows to the free zones increased substantially between 2010 (USD 100.6 million, expressed in constant 2018 USD) and 2024 (USD 294.6 million), even if the free zones’ share of total FDI into the Dominican Republic (about 9%) remained broadly constant over this period. The expansion of the free zone regime under Law 8-90 has also coincided with strong GDP growth (see Section 2.1.1).
Additionally, the 15-year duration of the Dominican Republic’s free zone tax exemptions is relatively long, which further enhances the attractiveness of the country’s business support. The OECD Investment Tax Incentives Database compares corporate income tax incentives across 70 mostly emerging and developing economies. The average tax exemption is 7 years, with most tax exemptions applying for 5 years (29% of temporary tax exemptions) or 10 years (25%) (OECD, 2025[26]). The 15-year Dominican tax exemptions, with the possibility of renewal, are likely to align well with the long time horizons of semiconductor industry.
On the other hand, a possible disadvantage of the free zone tax exemptions is their generic nature. The current incentives regime provides the same support to labour-intensive, low-value-added manufacturing as it does to advanced manufacturing. For example, free zone firms can access the same 100% tax exemptions regardless of whether they manufacture cigars and other tobacco products (160 free zone firms) and textiles (98 firms) or medical devices (40 firms) and electrical devices (30 firms) (CNZFE, 2025[21]). Similarly, the free zones’ top exporting sectors are a mixture of advanced manufacturing and other manufacturing: medical and pharmaceutical devices (33% of total free zone exports by value), tobacco (14%), electrical and electronic devices (14%), textiles (11%) and jewellery (9%) (CNZFE, 2025[21]). Furthermore, 41% of firms in the free zones are Dominican, which indicates that the free zone regime is not tailored to attracting multinational corporations or FDI, even though semiconductor firms will necessarily be international. The one-size-fits-all nature of the incentives means that the free zone regime does not support specific policy objectives or sectors.
The Dominican Republic should first clarify the objectives of the free zone regime. Currently, the primary objective of the free zones as set out in Law 8-90 – to promote export-led growth – is very broad and dates back to 1990. In the intervening years, the Dominican Republic has experienced significant economic growth and industrialisation. It is therefore necessary to consider whether the free zones’ objectives should be refined or modified for the next phase of the country’s development, and how the semiconductor industry aligns with these objectives.
Based on these clearly defined objectives, the Dominican Republic should then tighten the eligibility criteria for firms to operate under the free zone regime. Relatedly, the CNZFE could increasingly act as a “filter”, prioritising free zone operating permits (see Section 3.2.2) for firms that contribute directly to the core objectives of the free zones. In this way, the tax exemptions will benefit primarily the firms and the sectors that the Dominican Republic considers to be high priority. Other countries in the region already take a similar approach. For example, under Costa Rica’s free trade zone regime, firms must meet minimum investment requirements to be eligible for lower corporate income tax rates and firms manufacturing integrated circuits and other advanced electronics can benefit from full exemptions on import and consular duties (SCIJ, 1990[27]). In Mexico, some regional special economic zones offer tax incentives to strategic sectors such as electronics and semiconductors (UNCTAD, 2024[28]).
Finally, if necessary and consistent with the free zone objectives and eligibility criteria, the Dominican Republic could consider introducing more targeted incentives to complement the current regime of tax exemptions. These targeted incentives could be designed to encourage specific types of high-value investment or expenditure, such as in R&D or capital formation. For example, some economies in southeast Asia offer specific incentives for high-technology firms to support their capital and R&D expenditure. Viet Nam’s Investment Support Fund provides cash grants towards the R&D costs and fixed asset investments of eligible firms (UNCTAD, 2024[29]). Malaysia’s Investment Tax Allowance supports firms’ capital expenditure (LHDN Malaysia, 2024[30]). This new system of more targeted incentives could co-exist in parallel with the Dominican Republic’s current system of tax exemptions, on the condition that they are clearly delineated and mutually exclusive. That is to say, a firm would need to choose to apply for either the existing tax exemptions or the new targeted incentives scheme, but not both. The co-existence of parallel incentive schemes should be revisited in the medium term alongside an assessment of whether the Dominican Republic should transition towards a single well-targeted investment scheme.
In considering any modifications to the free zone incentives, the Dominican Republic should also be mindful of their fiscal cost. Currently, the country’s free zone tax expenditure – the government’s tax revenue foregone as a result of the tax exemptions – is equivalent to 0.60% of GDP, the second-highest tax expenditure on special economic zones in Latin America (behind Costa Rica, 0.95% of GDP) (Campos Vázquez, 2022[31]). The high free zone tax exemptions contribute to low tax revenue in the Dominican Republic (13.8% of GDP in 2022), less than the Latin America and Caribbean (LAC) regional average (14.3% of GDP) (World Bank, 2023[32]). Consequently, the Dominican Republic has the highest tax expenditure as a percentage of tax collection in Latin America (36.6%), although the free zones are not the sole cause of this and other tax expenditures (for example, subsidies to households) also contribute (Campos Vázquez, 2022[31]). In this way, high tax expenditure on free zone incentives could limit the country’s ability to support the development of other parts of the semiconductor and microelectronics ecosystems, such as innovation, infrastructure, a skilled workforce or access to finance. This is especially important in light of the country’s 2024 Fiscal Responsibility Law (Box 3.1).
In 2024, the Dominican Republic passed the Fiscal Responsibility Law (Law 35-24) to strengthen the country’s fiscal sustainability.
The law establishes a debt ceiling, limiting the government’s debt to GDP ratio to 40%. The government is required to meet the debt ceiling by the end of 2035 (for context, consolidated public sector debt was 59.3% of GDP in 2023). A related measure is the establishment of an expenditure ceiling: as the government transitions to its debt ceiling by 2035, its expenditure growth is capped at the annual inflation rate plus 3 percentage points. After the government reaches its debt target, its expenditure is calibrated annually to adhere to the debt ceiling.
In parallel, the law aims to increase transparency, as the Ministry of Finance commits to publishing quarterly reports on spending, revenues and financing. The law also provides for the creation of a Fiscal Responsibility Supervisory Committee to ensure compliance with the fiscal rules.
As the Dominican Republic works to attract semiconductor and microelectronics firms to the country – for example through tax incentives, R&D funding or infrastructure investment – it must consider how these expenditure decisions align with the requirements of the Fiscal Responsibility Law.
Sources: Congreso Nacional (2024[33]), Ley 35-24; IMF (2024[34]), Dominican Republic: 2024 Article IV Consultation - Press Release and Staff Report, https://www.imf.org/-/media/Files/Publications/CR/2024/English/1domea2024001-print-pdf.ashx.
3.2.2. Free zone administrative processes
While the previous section discusses the design of suitable free zone incentives for semiconductor and other advanced manufacturing firms, it is also important to ensure the efficient administration of these incentives in a way that reduces the bureaucratic burden on firms and enhances the Dominican Republic’s competitiveness.
The National Council of Free Zones (CNZFE) is ultimately responsible for determining which firms can operate under the free zone regime and so benefit from these tax incentives. Created by Law 8-90, the CNZFE oversees free zone industrial parks and firms, and its functions include evaluating, approving or rejecting firms’ applications for a free zone operating permit (permiso de instalación) and promoting the development of the free zone regime. The CNZFE Executive Council, which has decision-making authority, is composed of representatives from the public and private sectors. The Executive Council is chaired by the MICM and includes, amongst others, the Ministry of Finance, ProDominicana, ProIndustria and representatives of industrial parks, free zone firms and the Dominican Association of Exporters (ADOEXPO) (Congreso Nacional, 1990[22]).
To attract the semiconductor, microelectronics or other advanced manufacturing industries to the Dominican Republic, it is critical that firms can establish operations in the free zone regime smoothly. The evidence on this is mixed. Most firms and industrial parks interviewed as part of this research noted that the CNZFE granted the free zone operating permit relatively quickly, which is in line with the CNZFE’s commitment to granting operating permits approximately 30 days from the date that all required documents are received (CNZFE, 2024[35]).
Although the operating permit is essential for a firm to establish itself in the free zone regime, it is not sufficient. In addition to the CNZFE, firms must also engage with other government agencies to comply with their administrative requirements. Firms and industrial parks interviewed as part of this research raised concerns about the delays and administrative burdens faced by firms trying to establish free zone operations. This is broadly consistent with the findings of recent analysis showing that medical device manufacturers wait an average of 44 weeks to begin their operations in the Dominican Republic’s free zones (World Bank, 2023[36]). This analysis is not perfectly applicable to the semiconductor industry because it includes sector-specific interactions with the Ministry of Public Health, required for medical device manufacturers. Nonetheless, medical device firms are amongst the Dominican Republic’s most advanced manufacturers and so offer a reasonable indication of the administrative processes that semiconductor firms can be expected to face (Table 3.4).
Notes: This table excludes sector-specific processes required for firms in certain sectors, such as the Ministry of Public Health’s requirements for medical device manufacturers.
All administrative processes are sequential (i.e. they cannot begin until the previous process has finished) with the exception of the no objection to the cost-benefit analysis (one week) and customs registration (one week), which can be done in parallel with other processes. Therefore, the total estimated time for all of these processes is 24 (sequential) weeks.
Source: OECD analysis of World Bank (2023[36]), Reporte sobre tramitología para el establecimiento de empresas en tres regímenes especiales de República Dominicana, https://documents1.worldbank.org/curated/en/099112224175036219/pdf/P178504-76925377-6a5d-4130-ae65-f21ef927c822.pdf.
Table 3.4 suggests that in order to benefit from the free zone tax exemptions, firms must, as a minimum, engage with 5 government agencies (including multiple interactions with three agencies) to comply with 8 processes and 47 administrative requirements over a 24-week period. This is complex and burdensome and risks making the free zones less competitive. In very broad terms, the Dominican Republic should focus on two areas to address this problem: both enhancing the process of establishing operations in the free zones and improving firms’ understanding and expectations of this process. These reforms to the free zone administrative processes could benefit from the support of the Zero Bureaucracy programme (Burocracia Cero), the Dominican Republic’s flagship regulatory reform initiative (see Section 3.3.4). Stakeholders consulted for this report suggested that the Zero Bureaucracy programme had not yet delivered substantial streamlining to the free zone regime and so there was significant scope to accelerate regulatory reforms in this area.
To improve the processes summarised in Table 3.4, the Dominican Republic should commit to greater digitisation. Currently, some processes – such as registration for the free zone special tax regime with the DGII – rely primarily (but not exclusively) on in-person interactions (World Bank, 2023[36]). Greater digitisation would also facilitate a second major reform: greater data-sharing, as information submitted to one digital portal could be shared across multiple agencies. Some pockets of good practice do already exist – for example, the CNZFE and DGA have an interoperability agreement, and the DGII is able to access the database of the Santo Domingo Chamber of Commerce – but this is relatively rare. Improved data sharing would also reduce duplication, as it is estimated that 29 of the administrative requirements faced by medical device manufacturers are repeat requests, asked multiple times by different agencies (World Bank, 2023[36]). In this way, data sharing – which should comply with data privacy requirements – can increase the speed of establishing operations in the free zones, reduce administrative errors and minimise the administrative burden.
A third important way to streamline free zone administrative processes is to ensure that, as far as possible, the processes can be done in parallel. Currently, six of the eight processes in Table 3.4 occur sequentially which significantly extends firms’ wait-times. Relatedly, the Dominican Republic should aim to stop firms having to interact multiple times with the same agency – as is currently the case with the CNZFE, the Ministry of Finance and the DGII – because this increases the bureaucratic burden on the firm and the agency.
To improve firms’ understanding of what is required to establish free zone operations, the Dominican Republic should also make the processes in Table 3.4 much more transparent. The Dominican Republic does not currently publicise the full set of processes that firms must comply with to begin operations in the free zones. Although the CNZFE’s website explains how to obtain the free zone operating permit, it does not situate the operating permit in the context of the other processes in Table 3.4. As a result, firms are unsure about the time or resources they need to set aside to comply with all of the administrative requirements. Similarly, the CNZFE does not set clear, public criteria for evaluating firms’ applications for free zone operating permits or explain its rationale for rejecting applications, which makes the process seem opaque to firms. Improving the transparency of these processes will also help to manage firms’ expectations.
Similar concerns arise in relation to the renewal of the 15-year tax exemption, which depends on the renewal of a firm’s free zone operating permit by the CNZFE. One industrial park operator explained that the renewal process is opaque and a firm’s probability of renewal is uncertain. Law 8-90 only states that the “CNZFE can extend the operating permits when it considers this necessary and in keeping with the spirit of this Law” (Congreso Nacional, 1990[22]). Regulation 366-97, which explains how Law 8-90 should be applied, makes no reference to the renewal process (CNZFE, 1997[37]). It is plausible that the uncertainty around whether firms can continue benefitting from tax exemptions beyond 15 years will be a barrier to prospective investors. Therefore, the CNZFE should set objective criteria and clarify the steps in the renewal process, including the estimated time required. The CNZFE should also consider publishing data on the renewal rate for operating permits, so that semiconductor and microelectronics firms can make informed investment decisions.
3.2.3. Linkages between the free zone regime and local economy
Despite this section’s focus on the free zone regime, it is important to state that free zone firms represent a minority of firms in the Dominican Republic. The 843 free zone firms account for 0.7% of all (formal) firms in the Dominican Republic and 4% of total employment (CNZFE, 2025[21]; ONE, 2024[38]). The vast majority of firms and workers in the Dominican Republic operate under the national tax regime, also known as the local economy. Manufacturing also occurs in the local economy and the MICM has a dedicated Vice‑Ministry for Industrial Development focused on supporting the local manufacturing industry. Many of these local manufacturing firms operate in non-free-zone industrial parks, overseen by ProIndustria.
Firms in the local economy have very different characteristics to their free zone counterparts. Compared to the export-oriented free zone firms, the average transaction value of local firms’ exports and imports is substantially lower, and they trade a smaller number of products with a smaller number of countries. Moreover, firms in the local economy manufacture less technologically sophisticated products than firms in the free zone regime (World Bank, 2016[25]). Local firms also have a much higher rate of informality, as many choose not to register their business.
To drive further economic growth, these two parts of the Dominican economy – the free zones and the local economy – should be well integrated. However, this appears not to be the case, based on the decreasing proportion of inputs that free zone firms have sourced from the local economy over time. In 2005, free zone firms purchased 22% of their total inputs locally; by 2018, this had fallen to 18% (OECD, 2020[39]). There is significant variation across sectors in the free zones. Textile and footwear firms in the free zones source respectively 28% and 22% of their inputs locally, but more technologically advanced sectors like medical and electric device manufacturers source less than 3% of their inputs locally (World Bank, 2018[40]). This strongly suggests that semiconductor and microelectronics manufacturers are likely to also source most of their inputs internationally and not from the local Dominican market. Currently, local firms tend to supply only basic goods such as paper or cardboard packaging to the free zones. It is important to enhance linkages between the two parts of the Dominican Republic’s economy to expand the potential for spillover effects from the semiconductor and microelectronics industries and amplify its economic impact.
Interviews with Dominican government agencies, firms and industry associations emphasised three main barriers to linkages. First, firms in the local economy struggle to become suppliers to firms in the free zone regime because of their difficulty in meeting international standards. For example, one electronics manufacturer in a free zone industrial park explained that local firms are unable to comply with the AS9100 aerospace standard and so the electronics manufacturer is obliged to source components from overseas. Given the semiconductor industry’s strict quality standards, local firms could also find it challenging to supply semiconductor manufacturers, without initiatives to increase local standards. Other free zone firms noted that local firms lacked the technical skills to supply precision components or lacked suitable storage or transportation procedures and infrastructure.
A second barrier to strengthening linkages is the bureaucratic burden faced by local firms. An industry association explained that local firms typically face greater administrative requirements to supply free zone firms than international firms or other free zone firms do. This is principally because Article 2 of Law 8-90 states that sales from the local economy to the free zones are deemed to be exports and vice versa (Congreso Nacional, 1990[22]), which requires local firms to engage in additional bureaucracy with the DGII and DGA, straining the local firms’ more limited resources.
The third barrier is cost. The free zone tax exemptions create a bias towards inputs from overseas, as they make the cost of high-quality foreign inputs relatively lower (World Bank, 2018[40]). In contrast, inputs from local firms to the free zones are usually considered imports and not necessarily exempt from all taxes, which can lead to higher costs or requires the local firm to apply for an exemption to the tax (such as the value-added ITBIS). An additional cost barrier to linkages comes from the fact that firms in the local economy are affected by more expensive and less reliable electricity (see Section 3.5.1), which drives up the cost of their manufactured goods. An unreliable electricity supply also reinforces the local firms’ challenges with quality standards (described above): losses due to power outages decrease a firm’s likelihood of holding an internationally recognised quality certification (World Bank, 2018[40]).
The Dominican Republic should promote linkages by supporting the development of suppliers in the local economy and connecting them with semiconductor and microelectronics firms in the free zone regime. The MICM and ProIndustria should launch a supplier development programme to provide technical assistance to upgrade local manufacturers to meet international quality standards and gain internationally recognised quality certifications. The MICM should also collaborate with the DGII and DGA to remove unnecessary administrative requirements on local suppliers to the free zones, thereby contributing to levelling the playing field between local and international suppliers.
To build connections between firms, the Dominican Republic should expand its matchmaking programme. In January 2024, the MICM organised Encadena.DO, an online fair with 1 850 registered participants aimed at matchmaking commercial relationships between local and free zone firms (MICM, 2024[41]). The MICM should now formalise this programme by making it an annual event and including offline, in-person events too, similar to the Encadenados programme in Costa Rica.
The Dominican Republic should also enhance its existing supplier database, which lists local suppliers and the goods or services they provide. This Tool for Categorising Suppliers (herramienta de categorización de proveedores, hereafter the herramienta), managed by the MICM, evaluates local firms and allows them to become part of a network of potential suppliers to the free zones. Currently, the herramienta is targeted specifically at the medical and pharmaceutical devices sector, so the Dominican Republic could consider extending the herramienta to sectors relevant to the needs of semiconductor and microelectronics firms (see Annex A for a list of key inputs for semiconductor production). Additionally, local firms have struggled to engage successfully with the herramienta: as of 2023, only 18 local firms had been categorised, of which just 5 fulfilled requirements to become free zone suppliers, indicating a gap between the standards of local firms and the standards expected by free zone firms (IFC, 2023[42]). Therefore, the Dominican Republic could consider relaunching the herramienta alongside the new supplier development programme (mentioned above) to raise the standards of local firms.
In the short term, it will be challenging for firms in the Dominican Republic’s local economy to supply the semiconductor industry, given that semiconductor firms already have global networks of trusted suppliers and given the technological sophistication and quality standards of some semiconductor inputs. At first, it is possible that local firms will only supply services such as utilities, transportation, food or construction (Sturgeon, 2025[43]). In the medium term, however, if some of the above recommendations are successfully implemented, deeper linkages may begin to form and the country as a whole can start to benefit from the presence of foreign semiconductor and microelectronics firms.
More concretely, free zone firms involved in semiconductor ATP could look to source some of their packaging consumables from firms in the local economy. Semiconductor packaging consumables such as lead frames and encapsulants are less complex and have lower purity requirements than inputs for front-end manufacturing. Furthermore, semiconductor firms qualify encapsulants like mold compounds and underfills at the package level, not for the whole ATP facility, allowing chemical suppliers to gain entry with small batches rather than high-risk, high-volume commitments.
3.2.4. Industrial park land constraints
The majority of free zone industrial parks are privately owned (76%), with the remainder owned by the government, public-private ventures or not-for-profit organisations (IFC, 2023[42]). The parks provide a wide range of facilities and services to the firms operating inside them. These can include a dedicated customs office, workforce pre-selection and recruitment, recycling and waste disposal and access to electricity, water and connectivity infrastructure (see Sections 3.5.1 and 3.5.2). Critically, the parks also provide their firms with dedicated space for manufacturing and other industrial processes. However, free zone parks cited very limited industrial space as a top concern. One park in the San Cristóbal province consulted for the purpose of this report expressed concerns that it had run out of serviced industrial land and so would find it difficult to attract more firms. Several parks in the Santo Domingo province noted that land was scarce and expensive, acting as a major barrier to their expansion. This anecdotal evidence is supported by data: in 2023, the Dominican Republic’s industrial parks had a 98% occupancy rate, indicating very little space for new firms (CNZFE, 2023[44]). Without addressing these land constraints, the industrial parks could struggle to attract semiconductor and microelectronics firms.
The Dominican Republic should pursue two complementary solutions. Land constraints are particularly acute in Santo Domingo and the surrounding areas. One option for tackling the lack of industrial land is the Santo Domingo 2050 (SD2050) initiative (see Box 3.2). As part of the SD2050, the Dominican Republic should consider selling or making long-term leases of state-owned land to industrial parks to support their ability to attract semiconductor or other advanced manufacturing firms. A draft plan for the SD2050 suggests that this land could support four new industrial parks, home to a variety of sectors including pharmaceutical devices and the manufacturing of (unspecified) technologies. The SD2050 is also expected to include a wastewater treatment plant and a solar park, valuable infrastructure for the development of a semiconductor industry (see also Section 3.5).
In addition to the creation of this industrial corridor, the SD2050 aims to redevelop land for housing and other social purposes. Given that the state-owned land is finite, the MICM and MEPyD will need to balance these multiple, potentially competing, goals. The initiative has not yet allocated land to any redevelopment projects, but this process is due to begin by the end of 2025. The Commission and Public Trust responsible for the SD2050 – both ultimately accountable to MEPyD – are in the process of designing their methodology for land allocation. They must ensure that this methodology allows the allocation of land to industrial parks with advanced manufacturing firms including those related to semiconductors and microelectronics, while also fulfilling the broader social, economic and environmental goals of the SD2050.
The overarching objective of the Santo Domingo 2050 (SD2050) initiative is to redevelop state-owned land situated near the capital city in a manner that advances the government’s social, economic and industrial goals.
More specifically, the government has identified 44 million square metres (m2) of state-owned land around the Avenida Circunvalación motorway, some of which could be used to create an industrial corridor to support new industrial parks. This is one of several goals of the SD2050, which also aims to use the land to develop housing and health services, sports and cultural centres and offices and business facilities. Underpinning these goals is a commitment to improved public services, better public transport to reduce congestion and sustainable land use.
This initiative dates back to 2022, when Decrees 595-22 and 596-22 acknowledged that Santo Domingo was in need of sustainable development, created a commission to manage the SD2050 and identified the tracts of state-owned land that could be redeveloped. The commission works closely with a public trust (fideicomiso público), created by Decree 353-23, which administers the state-owned land and other assets.
The SD2050 remains at a relatively early stage – as its objectives are not expected to be achieved in full until 2050 – and it has not yet allocated land to any development projects. However, it is an important initiative that, if properly implemented, would contribute to addressing the land shortage in the Greater Santo Domingo area and support the development of new free zone industrial parks.
Sources: OECD analysis of the presentation SD2050 delivered by MEPyD in February 2025; Presidencia (n.d.[45]), Decreto 595-22; Presidencia (n.d.[46]), Decreto 596‑22; Presidencia (n.d.[47]), Decreto 353-23.
Although the SD2050 may be the Dominican Republic’s most high-profile initiative to redevelop land around Santo Domingo, other projects to address the shortage of industrial land are also ongoing. For example, in 2025, the Dominican Republic signed a memorandum of understanding with logistics firm DP World to expand its free zone industrial park and port in Caucedo, close to Santo Domingo (DP World, 2025[48]).
In parallel, the MICM should study the feasibility of locating semiconductor and microelectronics firms in industrial parks outside of the Greater Santo Domingo region, considering the potential costs and benefits. As explained in Section 2.1.2, the province of Santo Domingo (20 industrial parks) and the neighbouring San Cristóbal (12) together account for 34% of the country’s free zone industrial parks (CNZFE, 2025[21]). While this means that land is scarce and the roads tend to be congested, the two provinces have significant advantages such as proximity to universities and R&D institutions, a larger and more skilled labour market and access to international transport hubs. The Dominican Republic’s Eastern Corridor faces the opposite situation, with abundant land but very limited industry and no cluster developments. It remains an open question as to whether the MICM views the semiconductor and microelectronics industries as an opportunity for local industrial development in regions without existing industrial ecosystems, which would probably require complementary place-based policies.
Table 3.5 summarises the potential costs and benefits of three regions where a semiconductor or microelectronics cluster could be located. This report chooses to analyse these three regions because they are located in different geographic areas, capture a broad range of the Dominican Republic’s local economic and industrial conditions, and have distinct advantages and disadvantages from one another (Sturgeon, 2025[43]). The regions are not mutually exclusive, as semiconductor and microelectronics firms could theoretically establish themselves in all three locations. However, it is also clear that all three regions entail some trade-offs.
Note: Greater Santo Domingo includes the provinces of Santo Domingo, San Cristóbal and the National District. Cibao Norte includes the provinces of Santiago, Puerto Plata and Espaillat. The Eastern Corridor includes the provinces of San Pedro de Macorís, La Romana and LaAltagracia.
Sources: OECD analysis of FHI360 (2020[49]), Dominican Republic Labor Market Assessment, https://www.fhi360.org/wp-content/uploads/2024/02/resource-dr-lma-report.pdf? (accessed on 14 April 2025); IFC (2023[42]), Creating Markets in the Dominican Republic: Country Private Sector Diagnostic, https://www.ifc.org/content/dam/ifc/doc/2023/dominican-republic-country-private-sector-diagnostic-en.pdf (accessed on 11 February 2025); Sturgeon, T. (2025[43]), “Industrial Ecosystem Review and Strategic Assessment for the Dominican Republic - Preliminary findings and recommendations”.
This section considers the institutional, legal and regulatory conditions that shape the environment in which firms and investors in the Dominican Republic operate. The section analyses five areas that would influence the business environment for the semiconductor and microelectronics industries: government investment promotion initiatives; the legal framework for foreign investment; trade and customs policy; construction and environmental permitting procedures; and access to finance for firms and industrial parks.
3.3.1. Investment promotion
The Dominican Republic’s ability to attract FDI is critical to its ambitions to develop semiconductor and microelectronics industries. Section 2.2.2 shows that the country has performed reasonably well in FDI attraction, with stable and moderate FDI inflows. In 2023, net inflows to the Dominican Republic were equivalent to 3.9% of GDP, above the average for the LAC region (3.0% of GDP) (World Bank, 2023[50]). Many factors contribute to the Dominican Republic’s good FDI performance, including the tax exemptions outlined in Section 3.2, the country’s increasingly well-established democratic norms and institutions (International IDEA, 2024[51]), a stable investment environment and its strategic geographic location close to large export markets in the Americas. Inward FDI has many potential benefits for an upper-middle-income country like the Dominican Republic, including access to new technologies, R&D and knowledge spillovers, human capital development, job creation and establishing productive linkages between domestic and foreign firms.
Multiple organisations – both inside and outside the Dominican government – are involved in investment promotion efforts. ProDominicana is ostensibly the country’s national investment promotion agency, whose mission is to “promote the Dominican Republic’s exports and investment opportunities to attract FDI” (ProDominicana, 2025[52]). Affiliated with the MICM, ProDominicana offers a range of services to prospective investors, including guidance on initiating and developing new (greenfield) FDI projects, assistance to expand existing (brownfield) FDI projects, accompaniment throughout the processes managed by other government agencies, advice on export requirements and investment aftercare. The agency also publishes the annual investment guide to the Dominican Republic, which summarises investment incentives and regulations across a wide range of economic sectors (ProDominicana, 2024[53]). ProDominicana increasingly uses digital tools to provide these services: for example, ProDominicana Connect aims to connect Dominican exporters with international customers and ProInteligencia aims to aggregate the latest information on market access, FDI trends and investment and trade statistics (ProDominicana, 2025[54]).
Despite ProDominicana’s role as the national investment promotion agency, the CNZFE has a very similar mandate. The CNZFE’s mission is to “drive the growth and development of the free zones sector by promoting and attracting new investments”, with a particular focus on “driving an increase in exports” (CNZFE, 2025[55]). In theory, the two agencies have distinct remits, with the CNZFE supposed to support FDI solely in the free zone regime and ProDominicana in other parts of the economy; but in practice their remits are blurred. Firms, industrial parks and government agencies interviewed for this report all acknowledged that ProDominicana and the CNZFE’s overlapping mandates sometimes lead to ambiguity and duplication.
The two agencies attempt to minimise the risk of confusion by working closely together. ProDominicana is a member of the CNZFE’s Executive Council and vice versa, and the CNZFE informs ProDominicana of all foreign investments in the free zones so that ProDominicana can update the national register of foreign investment. Nonetheless, the institutional landscape is made even more complicated by the involvement of other institutions. For example, one industrial park commented that the Directorate of Trade and Investment Promotion at MIREX is also highly active in this policy area. The lack of a unified investment strategy from government causes industry associations, such as the Association of Foreign Investor Firms (ASIEX), to engage in their own investment attraction efforts.
Other recent reports have highlighted the same weakness in the Dominican Republic’s investment promotion efforts. The OECD previously called for a single co‑ordinating agency for all FDI attraction in the Dominican Republic (OECD, 2020[39]). The International Finance Corporation advocated for a much clearer division of responsibilities between ProDominicana and the CNZFE (IFC, 2023[42]). This new OECD report recommends that, in the short term, the Dominican Republic should nominate one agency to be wholly responsible for guiding semiconductor and microelectronics firms through the entire legal and regulatory process, from establishing operations in the Dominican Republic through to export. Over the medium term, the Dominican Republic should also map the mandates of ProDominicana and the CNZFE and clarify the agencies’ activities across all sectors, not just semiconductors and microelectronics. Depending on the outcome of this mapping exercise, the Dominican Republic could consider empowering a single agency for all FDI attraction activities.
In reorganising how ProDominicana and the CNZFE interact with each other and other relevant institutions, the Dominican Republic should draw on best practices for investment promotion agencies (IPAs). Literature suggests that good IPAs share four main characteristics. First, they benefit from a strong institutional arrangement, with considerable autonomy, strong connections to the private sector and partnerships with other government agencies. Second, they have a clear mandate, focused narrowly on FDI attraction and prioritising investment in specific sectors of high importance to the country. Third, effective IPAs need to be well resourced and staffed, including by people with private sector experience. Fourth, they offer high-quality services to investors by using appropriate tools and M&E processes (OECD, 2018[56]; Heilbron and Kronfol, 2020[57]; Steenbergen, 2023[58]). Currently, ProDominicana and the CNZFE do not exhibit all of these characteristics.
An additional way of achieving greater policy coherence is through a national strategy. Work on the National Strategy for Investment Attraction (ENAI) began in 2021 but has since been paused. The Dominican Republic should consider updating, finalising and publishing the ENAI so that the relevant public and private organisations can co‑ordinate their resources and efforts towards attracting FDI in advanced manufacturing and other sectors.
Another, related challenge facing the Dominican Republic’s objective of attracting investment from foreign semiconductor and microelectronics firms is the presence of multiple one-stop shops (ventanillas únicas). A one-stop shop is often viewed by policymakers as a means of delivering user-friendly services and lightening the administrative burdens on firms. For example, since the Dominican Republic’s One-Stop Shop for Investment (VUI) was formally launched in 2021, it has brought together 33 processes from 21 government agencies to a single online platform, and ProDominicana partly attributes the increase in inward FDI to reforms such as the VUI (Presidencia, 2024[59]). However, stakeholders consulted for this report stressed the importance of having a single one-stop shop, with one industry association noting that having many one-stop shops can be worse than having no one-stop shop at all.
The Dominican Republic has at least four one-stop shops with some relevance to the semiconductor and microelectronics industries (Table 3.6). Semiconductor and microelectronics firms will plausibly need to navigate through all four of these and deal with four different government agencies, which risks complicating their process of establishing operations in the Dominican Republic and exporting their products.
Selection of one-stop shops with relevance to the semiconductor and microelectronics industries
The Dominican Republic’s current arrangement still requires firms to engage with multiple online platforms. In comparison, one-stop shops in other countries are genuinely single points of contact, as ePortugal offers over 1 000 government services provided by 590 entities, Norway’s Altinn signposts users to 1 000 government forms and services, and GOV.UK acts as the starting point for 152 essential government services (OECD, 2020[60]).
To address this potential challenge, there is a near- and medium-term recommendation. In the near term, the Dominican Republic should nominate one “single window” to act as a genuine one-stop shop for all services required by semiconductor firms. This one-stop shop should be managed by the lead investment promotion agency for the semiconductor and microelectronic sectors chosen by the Dominican Republic (see above). One possible way to achieve this is by creating a sector-specific portal on one of the existing one-stop shops. For example, Mexico’s Single Window for Investors has dedicated portals for strategic sectors, including semiconductors (at the time of writing, this portal was still under construction). It is therefore encouraging that ProDominicana has already created a website for semiconductor investments (ProDominicana, 2024[61]), although it appears incomplete as it does not provide any information on applying for free zone operating permits, thereby requiring firms to be aware of the need to apply for this operating permit and proactively navigate to the CNZFE website (see Section 3.2.2 for analysis of the free zone operating permits).
In the medium term, the Dominican Republic should move towards unifying the multiple one-stop shops into an overarching single point of contact for government services, similar to the system of other countries. In this scenario, individuals or firms access a single online page which then signposts them to their sector of interest or the services of the relevant government agency. Again, the Dominican Republic is already making progress in this respect, as its Single Portal for Dominican Government Services unifies 598 services from 176 institutions (Government of the Dominican Republic, 2025[62]). The next step could be to bring all four of the one-stop shops in Table 3.6 under the Single Portal too.
3.3.2. Investment legal framework
In addition to these institutional improvements to the investment environment, the Dominican Republic could also consider facilitating foreign semiconductor and microelectronics investments by clarifying the country’s legal framework. In general, the Dominican Republic is considered a stable location for investments in the LAC region. The country has made a concerted attempt since 2020 to strengthen democratic and judicial norms and the constitutional amendments in October 2024 aimed to enshrine presidential elections as a fundamental right, strengthen the limits on presidential terms and increase the independence of the judiciary’s selection process (Presidencia, 2024[63]). Recently, the Dominican Republic has seen an increase in its Rule of Law score from the Global Innovation Index, from 35.3 (in 2019) to 39.2 (2022). Its ranking has climbed from 91 to 76 over the same period, now placing it above the regional average (84.5) (World Bank, 2023[64]).
Despite this progress, there remain areas in the Dominican Republic’s legal framework which could deter potential investors. Article 51 of the country’s constitution allows the expropriation of property and land by the Dominican government on the grounds of public utility or social interest, on the condition that the government offers full compensation (Tribunal Constitucional, 2015[65]). In theory, this expropriation provision is not a source of concern. Many countries, including OECD Members, have legal provisions that allow their governments to take private property for public use, as long as certain conditions are met. Moreover, the Dominican Republic-Central America-Free Trade Agreement (DR-CAFTA) between the Dominican Republic, the United States and five Central American countries (see Section 3.3.3) prohibits the expropriation of foreign investors without compensation (CAFTA-DR-USA, 2004[66]).
In practice, however, the expropriation process in the Dominican Republic has led to disputes and arbitration between investors and the government, and insufficient or delayed compensation (U.S. Department of State, 2024[67]). One recent example is the case Lee-Chin v. Dominican Republic. In 2023, a tribunal of the International Centre for Settlement of Investment Disputes ruled that the Dominican Republic had breached international investment agreements relating to indirect expropriation, fair and equitable treatment and the umbrella clause (ICSID, 2023[68]; UNCTAD, 2024[69]). Given the large investments associated with semiconductor and microelectronics firms and the need for international private capital to develop the Dominican Republic’s semiconductor industry, it would be important to ensure that the expropriation process does not act as a barrier to the country’s ambitions.
Law 16-95 also contains provisions that could be revisited in light of the government’s objective to attract semiconductor and microelectronics investments to the country. In general, Law 16-95 has been credited with opening up most sectors of the Dominican economy to foreign investment in the 1990s and catalysing long periods of sustained economic growth. However, Article 5 of the law also imposes restrictions on foreign investment in three areas:
disposal of toxic, dangerous or radioactive waste not produced in the country
activities that affect public health and the environment
production of materials directly linked to defence and national security (Congreso Nacional, 1995[70]).
These types of limits on foreign investment are not unusual, as other countries impose similar foreign investment restrictions (OECD, 2016[71]). However, it is important to consider how these restrictions could interact with possible investments in the semiconductor industry. Some parts of the semiconductor value chain depend on chemicals with potentially hazardous waste or emissions which can harm the environment. Moreover, semiconductors are dual-use technologies, some of which can have military or national security applications. Therefore, it is conceivable that investment in the Dominican Republic’s semiconductor industry could fall foul of the second and third foreign investment restrictions.
The above could contribute to an unpredictable environment for investors. To address this, the Dominican Republic should improve the speed and transparency with which the government delivers expropriation compensation to the affected parties and, where applicable, the courts deal with expropriation claims. The Dominican Republic should also clarify that investments in the semiconductor and microelectronic sectors are exempt from foreign investment restrictions, as long as they comply with, for example, the environmental regulations. This clarification could entail the publication of data on the enforcement of these restrictions and targeted communications to reassure prospective investors. The Dominican Republic could also look to amend the underlying legislation to exempt semiconductor investments from investment restrictions, although this would be a more complex, sensitive and time‑consuming process.
3.3.3. Trade and customs
Trade policy is another important area shaping the business environment in the Dominican Republic, including for the semiconductor and microelectronics industries, as it can provide firms with access to international markets and higher-quality inputs. A review by the World Trade Organization (WTO) concluded that the Dominican Republic’s trade policy regime had few obstacles and was broadly open and transparent (WTO, 2023[72]). The Dominican Republic has also signed trade agreements with many partners, most notably DR-CAFTA. DR-CAFTA, to which the Dominican Republic, the United States, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua are signatories, includes a most-favoured nation clause and reduces or removes tariffs and non-tariff barriers to trade on a wide range of goods and services, in a market of almost 400 million people. The impact of the changes to US tariff policy announced in April 2025 on the provisions of DR-CAFTA remains to be seen.
DR-CAFTA has promoted exports of medical devices, pharmaceuticals, plastic products and footwear (World Bank, 2023[73]) and since the agreement entered into force in the Dominican Republic in 2007, Dominican exports to the other signatory countries more than doubled to USD 7.2 billion and Dominican exports to the other DR-CAFTA signatories accounted for almost 60% of total Dominican exports in 2022 (ProDominicana, 2023[74]). The Dominican Republic has also reached trade agreements with other economies, such as the CARIFORUM-EU Economic Partnership Agreement, signed in 2008 with the European Union and 13 countries of the Caribbean Community. Of particular relevance to this report, the Dominican Republic is also a signatory to the WTO Information Technology Agreement (ITA 1), which aims to eliminate tariffs on hundreds of information technology products classified into seven product categories, including semiconductors and semiconductor manufacturing equipment. However, the Dominican Republic has not yet ratified ITA 1.
As a result of these important trade liberalisation efforts, the Dominican Republic has already eliminated tariffs on most of the semiconductor-related products identified in Annex B. However, the Dominican Republic still maintains tariffs on a small number of semiconductor-related products, used in various segments of the value chain (Table 3.7).
Notes: Harmonized System (HS) code 854151, listed in this table, does not appear in the list of semiconductor inputs in Annex B. This is because the Dominican Republic has adopted the 2022 edition of HS nomenclature, whereas Annex B uses the 2017 edition of HS nomenclature. HS 2022 reclassified what used to be known as HS code 854150 in the 2017 edition into two separate codes, 854151 and 854159. Annex B still uses HS 2017 as this allows for cross-country and over-time analyses, since not all countries have adopted the latest HS 2022. For further details, refer to the official World Customs Organization documentation (HS Nomenclature 2022 Amendments).
HS codes 900699 and 811292 are not included in ITA 1 or 2.
Source: Information provided by the MICM in response to OECD (unpublished[75]), “Policy Questionnaire – Review of Governance and Framework Policies for the Semiconductor and Microelectronics Industries”, OECD, Paris.
Therefore, the Dominican Republic should consider removing the remaining tariffs on these semiconductor-related products. This would bring at least two benefits. First, it would send a clear signal to industry about the Dominican Republic’s commitment to participating in the global value chain. Second, it would lower costs for some inputs for the Dominican Republic’s prospective semiconductor industry. Although most imports into the free zones are already exempt, firms in the local economy still need to pay tariffs on imports. This increases manufacturing costs in the local economy and acts as an additional barrier to local firms providing inputs to free zone firms. In this way, removing tariffs could help to foster linkages (see Section 3.2.3).
One way of removing tariffs on most, but not all, of these products would be for the Dominican Republic to sign and ratify ITA 2, which the WTO brokered in 2015 to expand tariff-free status to another 201 information technology products.4 Signing ITA 2 would also bring the Dominican Republic in line with other countries in the region such as Costa Rica. The Dominican Republic should also ratify ITA 1.
Closely related to trade policy, customs procedures determine the ease with which imports and exports enter and exit the country. The efficiency of the Dominican Republic’s customs clearance process scores 2.60 out of 5, slightly above the LAC regional average (2.48) (World Bank, 2023[76]). For firms in the free zones, customs procedures are particularly agile as Article 32 of Law 8-90 created a Customs Deputy Directorate dedicated exclusively to the free zone regime (Congreso Nacional, 1990[22]). This allows the DGA to devote additional resources to the free zones and each free zone industrial park has its own DGA Customs Office. When imports destined for the free zones arrive in the Dominican Republic, they do not go through the usual customs procedures in airports or maritime ports but are instead accompanied directly to the free zone industrial park where the customs checks take place. For exports from the free zones, all customs paperwork is verified in the industrial park by the DGA before being dispatched to the airport or maritime port (AZFA, 2024[77]).
Law 168-21, passed in 2021, is expected to improve the Dominican Republic’s customs system further, as it legalises electronic customs declarations, so invoices and other documents can now be submitted electronically (Congreso Nacional, 2021[78]). The law also reiterates the status of authorised economic operators (AEOs), individuals or firms which are eligible for simplified customs processes. As of 2022, more than 500 firms had been certified as AEOs (WTO, 2022[79]). The advantages of AEO certification include a reduced number of physical inspections, reduced requests for documents, dedicated lanes for AEO cargo and dedicated storage areas at ports (DGA, 2024[80]).
In addition to this relatively new law, the DGA has also rolled out two other programmes. The 24-hour Dispatch (D24H) programme aims to reduce the time taken for imports to clear customs from seven days to one (DGA, 2024[81]). Since its launch in 2021, the programme has cut the average container dispatch time to four days, contributing to taxpayer savings of approximately DOP 1.38 billion (Dominican pesos) due to reductions in expenditure on storage, transport and security (DGA, 2024[82]). Export More (Exporta Más) aims to increase Dominican exports through greater digitisation and automation of customs processes, improvements to the One-Stop Shop for External Trade (VUCERD – see Section 3.3.1) and more non-intrusive inspections of goods. Since 2021, the Export More programme has facilitated exports worth more than USD 15 billion by 500 firms (Presidencia, 2024[83]). This progress appears encouraging; to further support the development of the semiconductor industry, the DGA will need to ensure that its customs procedures can adapt to semiconductor-related products, which are often delicate and can be hazardous. This would entail close collaboration between the DGA and the Ministry of the Environment and Natural Resources (MIMARENA), the agency responsible for the Certificate for the Import of Industrial Chemicals which needs to be applied for via VUCERD 15 days before the products reach the Dominican Republic (DGA, 2020[84]).
3.3.4. Permitting
Permitting – the process by which firms receive government authorisation to carry out a certain activity – is another part of the business environment which could be improved further to increase the Dominican Republic’s ability to attract semiconductor and microelectronics firms. This section builds on the analysis of free zone administrative processes in Section 3.2.2 by focusing on two processes that were often raised by stakeholders interviewed for this report as challenges: construction and environmental permits.
Government officials, industrial parks and firms all expressed concern that delays to construction permits could last almost one year. Data from the World Bank confirm that it takes a firm in the Dominican Republic 206 days, on average, to obtain all necessary construction licences, request and receive the required inspections, and obtain utility connections. This is longer than the regional average (191 days) and substantially longer than in countries such as Costa Rica (138 days) or Panama (105 days). It should be noted, however, that the Dominican Republic scores 70.8 out of 100 – better than the regional average of 63.2 – for dealing with construction permits, which takes into account variables other than just permitting time, such as cost and building quality (World Bank, 2019[85]). Nonetheless, for an industry like semiconductors, which relies on the construction of dedicated manufacturing plants, the slow construction permits in the Dominican Republic could act as a barrier to investment.
The main reason for the delay in construction permits is the large number of procedures (as many as 21) and government agencies (as many as 18) that a firm must navigate. Although the Ministry of Housing and Construction (MIVED) is the lead agency, firms often also have to interact with MIMARENA, the Ministry of Public Works and Communications, the state-owned electricity transmission and distribution companies and water authorities. In addition to these national institutions, firms are also required to deal with the local authorities in the area where they hope to build (CNC, 2024[86]).
Historically, there have been limited connections and data-sharing between these agencies, which has resulted in a fragmented and slow permitting process. However, MIVED has recognised that this is an area for improvement and so created the Construction One-Stop Shop (Ventanilla única de la construcción, VUC). With support from the government’s Zero Bureaucracy programme (see Box 3.3), in 2022, MIVED launched VUC, which aims to bring together in a single place the institutions and procedures involved in the construction permitting process, reduce duplicate data requests of firms, and increase digitisation. The impact of VUC is still to be seen.
Since 2020, the Dominican Republic has prioritised regulatory reform. One of the major motivations for regulatory reform was a 2019 review of more than 2 300 government procedures, which estimated their economic and social cost at DOP 250 billion, the equivalent of 4.7% of GDP. This heavy bureaucratic burden was also reflected in the World Economic Forum (WEF) Global Competitiveness Index, which ranked the Dominican Republic 108th out of 141 countries for its regulatory burden, with a score of 33 points out of 100 (WEF, 2019[87]).
In response, the Dominican Republic launched the Zero Bureaucracy (Burocracia Cero) programme in 2020 to improve the efficiency of its public administration and increase the Dominican Republic’s competitiveness. The programme has five overarching objectives:
Reduce the costs of government bureaucracy and regulation.
Increase the effectiveness and transparency of the public administration, by simplifying and redesigning processes.
Promote the use of information and communications technology (ICT) to automate and digitise government procedures and public services.
Improve the quality of regulations to increase public participation and trust.
Monitor government procedures and public services to increase their productivity and ensure their continued improvement.
Specific reforms have included the introduction of the Construction One-Stop Shop (VUC), improvements to the industrial registry, reduced time for opening new businesses and certifying small and medium-sized enterprises (SMEs), quicker social security registrations and the digitisation of pension certificates.
As set out in Decrees 640-20 and 707-22, the Zero Bureaucracy programme is managed by four government agencies. The Ministry of Public Administration has overall responsibility for the programme. The National Competitiveness Council (CNC) co‑ordinates and leads the implementation of the programme. The Ministry of the Presidency and the Government Office for ICT provide political and technical support respectively.
Between 2020 and 2024, the Zero Bureaucracy programme helped to reduce the average time spent on a sample of government procedures by 50%, which is estimated to have contributed to DOP 60 billion in savings (equivalent to 1% of GDP). During this period, the Dominican Republic improved its ranking for ease of complying with government regulations by 39 positions (according to the WEF’s Executive Survey) and its ranking for government effectiveness by 38 positions (according to the World Bank’s Worldwide Governance Indicators).
Sources: CNC (2024[86]), Burocracia Cero - Improving Competitiveness through the Efficiency of Public Services, Consejo Nacional de Competitividad; CNC (2025[88]), Memorias Burocracia Cero 2022-24, https://cnc.gob.do/wp-content/uploads/2025/01/Book-Memorias-2da-Fase-Rev1.pdf%20.
Related to their concerns about construction permits, firms consulted for this report also noted the slow process for obtaining environmental permits. MIMARENA oversees the Dominican Republic’s environmental authorisation procedures, which are mandatory (with very few exceptions) for all projects, infrastructure developments, industries or any other public or private activities which could affect the country’s natural resources, environment or public health. The ministry defines four categories of projects according to their expected environmental impact, from Category A (high likelihood of adverse environmental impact) to Category D (low environmental impact). Appropriately, projects with a higher expected environmental impact require a higher level of environmental authorisation. However, this higher level of environmental authorisation also leads to significantly longer processing times (Table 3.8).
Summary of the four categories of environmental authorisation
Source: OECD analysis of MIMARENA (2014[89]), Compendio de Reglamentos y Procedimientos para Autorizaciones Ambientales de la República Dominicana, https://eitird.mem.gob.do/wp-content/uploads/2019/12/Compendio-de-Reglamento.pdf.
Even though the Dominican Republics has created a dedicated one-stop shop for environmental services (VUSA), environmental permitting is nonetheless highly onerous and the single longest process that firms must go through in order to operate in the free zones, lasting an average of 13 weeks for some advanced manufacturing firms (see Section 3.2.2). For projects categorised in Categories A and B, this can be substantially longer. VUSA has not yet managed to address some of the fundamental challenges of the environmental permitting process. For example, a lack of clear criteria means that firms face considerable uncertainty about which category of environmental authorisation they are required to seek. Instead, MIMARENA appears to have substantial discretion to determine a firm’s category after the firm has submitted its application, potentially increasing its administrative requirements and slowing down the process. Another challenge is that VUSA still requires firms to pay their application fee by cheque, which is slower than electronic payment (World Bank, 2023[36]).
The burdensome process of environmental permitting is particularly relevant for semiconductor firms. As alluded to in the analysis of foreign investment restrictions in Section 3.3.2, the semiconductor manufacturing process relies on inputs such as fluorinated gases and wet chemicals, which can contribute to greenhouse gas emissions and environmental contamination. This is particularly the case for the fabrication stage of the value chain, but ATP can also cause adverse environmental impacts. It is therefore reasonable that semiconductor projects should require one of the higher categories of environmental authorisation, in order to protect the Dominican Republic’s environment. However, this does entail a long wait time for firms.
To address the ongoing concerns around construction and environmental permitting, the CNC, MIVED and MIMARENA should streamline these processes. The Zero Bureaucracy programme is set to continue, with its next phase taking place between 2024 and 2028, so the Dominican Republic should consider using the programme to target improvements in permitting. Currently, MIVED and MIMARENA take a sector-agnostic approach to permitting and do not prioritise applications from certain sectors over others; one possible improvement would be to fast-track permits for priority sectors, including semiconductor, microelectronics and other advanced manufacturing projects. Regarding environmental permitting, the Dominican Republic should set transparent criteria – for example, based on a firm’s sector, their inputs, goods manufactured and waste produced – that provides clear guidance as to a firm’s category of environmental authorisation before a firm submits its application. The World Bank estimates that firms must fulfil 15 administrative requirements to receive environmental authorisation (World Bank, 2023[36]), so there may also be scope to combine some of these requirements or carry them out in parallel as opposed to sequentially.
Given that the semiconductor industry does not currently operate in the Dominican Republic, MIVED and MIMARENA staff may require specific training in order to assess permit applications from firms in that sector.
3.3.5. Finance
The semiconductor industry is highly capital-intensive: one study estimated that the global semiconductor industry’s net capital expenditure as a percentage of sales is almost 12%, one of the most capital-intensive sectors (Damodaran, 2025[90]). Although the segments of the semiconductor value chain that the Dominican Republic aims to develop have relatively lower capital expenditure, firms will still need finance to purchase assets including buildings, equipment and land, as well as working capital for their daily operations.
While no semiconductor firms currently operate in the Dominican Republic, the evidence on barriers to finance for firms already operating in the country is mixed. Only 3% of firms surveyed in the free zone regime named access to finance as a critical bottleneck to their operations, which suggests that this is not a significant problem (World Bank, 2022[91]). More anecdotally, however, firms and industrial parks raised concerns that difficulties in accessing finance were one of their major obstacles to expansion. According to them, difficulties included the limited domestic sources of finance, as most firms and parks rely on bank loans, the high cost of finance, and insufficient long-term capital.
Data appear to substantiate some of these concerns. Banking depth in the Dominican Republic is low compared to other countries in the region: banking credit to the private sector as a percentage of GDP is 29.5%, below the LAC regional average of 46.9% (World Bank, 2023[92]). On the cost of finance, the Dominican Republic’s lending interest rate – the bank rate that usually meets the short- and medium-term financing needs of the private sector – is 14.4%, higher than in Panama (6.9%), Costa Rica (9.1%) or Mexico (11.6%), which suggests that financing from Dominican banks is relatively expensive (World Bank, 2023[93]).
To support firms in the semiconductor ecosystem to access finance, the MICM should work closely with the Development and Export Bank (BANDEX). BANDEX is still relatively new, having been established in its current form in 2021 through Law 122-21, and its mission would seem to align well with the needs of the advanced manufacturing sector. Majority-owned by the Dominican state and backed by a government guarantee, BANDEX aims to provide both financing and technical support to develop strategic, often export-oriented, sectors of the economy. BANDEX financing often takes the form of concessional loans, with a lower interest rate than an equivalent loan from a commercial bank.
As of 2023, BANDEX had total assets worth DOP 22.5 billion and a net loan portfolio of DOP 7.35 billion. In 2023 alone, BANDEX issued DOP 5.16 billion in loans, of which 14% went to manufacturing (the second-highest share of any sector) and 6% went to construction (BANDEX, 2023[94]). BANDEX should consider how some of its financial support could be tailored more closely to the requirements of the semiconductor sector, for example through larger loans or extended repayment schedules. Additionally, 12% of BANDEX loans in 2023 went to SMEs, which suggests that the bank could also support some firms in the local economy to become suppliers to the semiconductor industry, an important step in promoting linkages between the free zones and local economy and ensuring that the impact of the semiconductor industry is felt throughout the economy (see Section 3.2.3). In parallel, the MICM should also collaborate with BanReservas, another state-owned bank, to understand how its products could support advanced manufacturing firms.
As highlighted in Section 3.2.4, some free zone industrial parks face barriers to expanding and attracting advanced manufacturing firms due to expensive and scarce land. While BANDEX and BanReservas loans could theoretically help industrial park operators purchase and develop land, the high capital requirements suggest that additional sources of financing should also be considered. Nigua Free Zone, an industrial park located just outside Santo Domingo and home to over 30 firms including medical and electrical device manufacturers, presents an interesting case study for alternative sources of financing. Nigua does not rely on bank loans as the park is an asset managed by Pioneer Investment Fund and owned by large Dominican pension funds. This source of financing has allowed Nigua to engage in an expansion project, adding 230 000 m2 and 15 industrial buildings to its facilities (Nigua Free Zone, 2023[95]).
The example of Nigua points to some of the benefits of receiving equity from institutional investors such as pension funds. However, the case of Nigua is relatively rare, as Dominican pension funds tend not to invest in infrastructure projects and their portfolios are highly concentrated in government securities: approximately 75% of their assets under management are bonds from the Ministry of Finance or the Central Bank of the Dominican Republic (IFC, 2023[42]). Given that Dominican pension funds have assets worth USD 17.3 billion (equivalent to 15.4% of GDP), the Dominican Republic could aim to steer a larger share of this towards the development of industrial infrastructure by engaging closely with the Stock Market Superintendence and Pensions Superintendence. This would build on a previous OECD recommendation to modify regulations to encourage greater investment from pension and mutual funds in the Dominican Republic (OECD, 2022[96]). Evidently, using pension funds as sources of finance presents risks and requires close regulatory oversight. However, investing in industrial parks could provide the pension funds with reliable income streams, given the long-term lease agreements and rental income from the parks’ firms.
A key factor in the development of semiconductor and microelectronics industries is an STI ecosystem that connects firms and academia, stimulates R&D and fosters knowledge spillovers. Several institutions play important roles in the Dominican Republic’s STI ecosystem. Within the government, MESCyT is, as of 2025, the ministry in charge of the country’s system of higher education, science and technology. It is responsible for the National Fund for Innovation and Scientific and Technological Development (FONDOCYT), which provides public funding to organisations – including universities and research centres – for R&D projects, the purchase of equipment and the development of research infrastructure.
As of 2021, there were 48 universities and higher education institutions in the Dominican Republic. The three largest recipients of FONDOCYT funding – an indicator of involvement in research, development and innovation activities (RD&I) – were the Autonomous University of Santo Domingo (UASD), the Pontifical Catholic University Madre y Maestra (PUCMM) and Santo Domingo Institute of Technology (INTEC) (UNCTAD, 2021[7]). In 2024, UASD received FONDOCYT support to investigate the semiconductor properties of germanium diselenide. PUCMM, headquartered in the northern Santiago province, was the first Dominican university to file for and obtain an international patent, for its research in nanotechnology (Pimentel, 2014[97]; PUCMM, 2016[98]). INTEC, regarded as the country’s leading technical institute, also received FONDOCYT funding to research the semiconductor properties of graphene oxide (MESCyT, 2024[99]).
After government agencies and universities, firms are the third main type of institution active in the Dominican Republic’s STI ecosystem, albeit to a much lesser extent. In general, few firms in the country engage in innovation; those which do tend to focus on incremental improvements to processes and products, often adopting or adapting technologies from other countries (UNCTAD, 2021[100]). In recent years, some firms have partnered with Dominican universities. For example, in 2022, Eaton Corporation – an American firm which manufactures a variety of electric circuit breakers in PIISA Industrial Park – opened an industry design centre adjacent to the INTEC campus. The design centre focuses on product development for Eaton’s major product lines and supports manufacturing innovation (Eaton, 2022[101]). The design centre is the latest example of Eaton and INTEC’s relationship, as the multinational has previously contributed to funding laboratories and laboratory equipment at INTEC (INTEC, 2022[102]). The collaboration between Eaton and INTEC emerged organically, as a result of decades of co-existence in the same ecosystem. In general, however, industry-academia collaboration in the Dominican Republic remains rare.
3.4.1. STI challenges
The Dominican Republic’s STI ecosystem has several areas for improvement. First, government agencies with responsibility for STI have been frequently created and then dissolved in recent years, contributing to a lack of consistent and coherent policymaking. For example, in 2020 Decree 175-20 dissolved the Council for Innovation and Technological Development – the body responsible for co‑ordinating innovation policy – and replaced it with three new entities: a Presidential Commission for Promoting Innovation, the National Innovation Centre and the National Fund for Supporting Business Innovation (Presidencia, 2020[103]). However, following the change of government in 2020, Decree 175-20 was repealed by Decree 464-21 which replaced these three new entities with the Innovation Cabinet (Presidencia, 2021[6]). Similarly, in 2024, the government announced that the lead ministry MESCyT would be merged with the Ministry of Education (MINERD), which will assume most of MESCyT’s former functions (Presidencia, 2025[104]). However, the functions of MESCyT’s Vice-Ministry of Science and Technology have not yet been assigned to another part of government, so it is currently unknown which agency will assume responsibility for these critical policy areas. The Dominican Republic must ensure that the MESCyT-MINERD merger does not disrupt the implementation of the National Innovation Policy 2030 (see Section 3.4.2) or efforts to attract semiconductor and microelectronics investments.
A second area for improvement relates to the weak links between academia and industry. One business association interviewed for this report noted the very limited relationships between its members and universities. Similarly, representatives from academia noted firms’ lack of engagement with their research. These impressions are supported by the Global Innovation Index 2024, which ranked the Dominican Republic 100th out of 133 countries for university-industry R&D collaboration, well below Costa Rica (68th) and Mexico (74th) but above Panama (111th) (WIPO, 2024[105]). It is true that firms in the Dominican Republic’s Medical Devices and Pharmaceuticals Cluster are developing partnerships with universities such as PUCMM, INTEC and Universidad Iberoamericana in relation to human capital and skills training. Moreover, the cluster’s Technical Education Committee engages with vocational and higher education institutions to co-develop education programmes, and also has outreach initiatives for students (Báez, 2024[106]). However, it remains to be seen whether these partnerships can also foster long-lasting R&D collaboration between the firms and academic institutions.
A third challenge is the lack of reliable STI data, which is important for guiding evidence-based policymaking in this domain. United Nations Trade and Development notes that the Dominican Republic’s statistics in these areas are only sporadically collected and updated (UNCTAD, 2021[7]), while the OECD has previously highlighted that the country does not report official R&D figures (OECD, 2020[39]). As a result, the Dominican Republic is absent from datasets on R&D expenditure held by the World Bank and the Ibero‑American Network for Science and Technology Indicators (RICYT) (World Bank/UIS, 2024[107]; RICYT, 2022[108]). The absence of data is potentially problematic as it makes it more challenging for policymakers to assess the state of the STI ecosystem, design policy and monitor whether policy is having the intended impact. It could also raise concerns with potential investors in R&D-intensive industries like semiconductors.
Fourth, although the Dominican Republic’s R&D data are subject to limitations, they suggest that R&D expenditure is extremely low. The National Innovation Policy estimates that R&D expenditure is in the range of 0.01-0.03% of GDP (Gabinete de Innovación, 2022[109]), which is significantly lower than the average R&D expenditure for the LAC region (0.55%) as well as the OECD (2.7%) (UIS, 2022[110]; OECD, 2022[111]). Lack of investment in R&D could have several disadvantages for the Dominican Republic’s advanced manufacturing industry, including reduced absorptive capacity of firms,5 slower development of new technologies, fewer improvements to existing products and processes, and lower productivity. High levels of R&D investment are essential for the global semiconductor industry, which spends on average 13% of its revenue on R&D per year (Damodaran, 2025[112]).
There are several mutually reinforcing explanations for low R&D investment. The Dominican Republic’s productive structure tends to favour activities with low technological content, which means that firms rely on labour-intensive production and have relatively few incentives to invest in R&D or pursue competitive advantage through technology adoption. Multinational corporations operating in the Dominican Republic typically prefer to conduct R&D in the countries where they are headquartered, such as the United States, where they may have access to the necessary R&D talent and infrastructure, an IP regime with stronger protections and generous government R&D incentives. Indeed, the Dominican Republic offers very low public funding for R&D. Between 2005 and 2019, FONDOCYT, which is practically the only source of government research funding in the Dominican Republic, only allocated the equivalent of DOP 3.69 billion to 539 projects, an annual average of approximately DOP 263 million (UNCTAD, 2021[7]).
The fifth challenge relates to the effectiveness of FONDOCYT, which struggles to support the country’s STI ecosystem. FONDOCYT’s disbursement of R&D funding is slow and incomplete. Between 2005 and 2018, just over half of the total awarded FONDOCYT funding was successfully allocated; the remaining half was delayed or never disbursed (UNCTAD, 2021[7]). The lack of funding consistency could hinder innovative activities in an R&D-intensive industry like semiconductors. Additionally, FONDOCYT provides extremely limited funding to firms, due to Law 139-01 and the subsequent general regulation in 2009, which states that FONDOCYT must prioritise funding to academic institutions (Congreso Nacional, 2001[113]; MESCyT, 2009[114]). Firms can receive FONDOCYT funding but only when they are in a consortium with higher education institutions, research centres or research institutions, and these institutions must be the lead partner.
According to one study, firms participated in only 5% of all FONDOCYT-funded projects between 2005 and 2018 and no firm had ever led a project (Gómez-Valenzuela, Rosa and Tejeda, 2020[115]). This lack of engagement between FONDOCYT and firms is reinforced by stakeholder interviews, as several firms in advanced manufacturing sectors interviewed for this report claimed that neither they nor their peers had received support from FONDOCYT, and the executive vice-president of a large industry association did not even know about FONDOCYT or the funding it offered. The challenges associated with FONDOCYT R&D funding are made greater by the absence of alternatives, such as an R&D tax credit.
Taken together, these challenges contribute to very low levels of patenting. The number of patent applications filed in the Dominican Republic under the Patent Cooperation Treaty (PCT) – a proxy for high‑potential patents – has been consistently low for all technologies over 20 years, with only 2 semiconductor-related PCT patent applications between 2000 and 2023 (Figure 3.1).
Note: Data refer to patent applications filed under the PCT by earliest filing date. Patent application follows fractional counting. Patents related to semiconductors include keywords such as “semiconductor”, “transistor”, “integrated circuit”, “silicon wafer”, “logic chip” and “memory chip”. The latest observations are for 2023.
Source: OECD (n.d.[117]), STI Micro-data Lab: Intellectual Property Database, http://oe.cd/ipstats (accessed on 15 October 2025).
Figure 3.2 shows that the Dominican Republic lags behind other countries in the region in terms of PCT patent applications per capita. This is confirmed by the Global Innovation Index, in which the Dominican Republic ranks 92nd (out of 133 countries) for PCT patents, below Mexico (76th), Panama (79th) and Costa Rica (80th) (WIPO, 2024[105]). This low ranking is perhaps not surprising given that multinational corporations operating in the Dominican Republic typically perform their R&D outside of the country. In the short term, there is an argument for the Dominican Republic to focus less on the registration of new patents and more on the enforcement of existing IP rights. It is therefore encouraging that, in 2024, the United States Trade Representative removed the Dominican Republic from its Special 301 Report Watch List, recognising the country’s progress in IP enforcement and transparency and noting advances in combating signal piracy and counterfeit medicines, a larger number of specialised IP prosecutors and the publication of enforcement-related statistics (USTR, 2024[116]). This could also act as a positive signal to potential semiconductor investors.
Note: Data refer to patent applications filed under the PCT by earliest filing date. Patent application follows fractional counting. Population refers to total population in the country. Noise reduction is achieved over an average period of five years. Values represent patents per capita, multiplied by 100 for readability. The latest observations are for 2023.
Sources: OECD (n.d.[117]), STI Micro-data Lab: Intellectual Property Database, http://oe.cd/ipstats (accessed on 15 October 2025); for population data, World Bank (n.d.[118]) Population, total (indicator), https://data.worldbank.org/indicator/SP.POP.TOTL (accessed on 15 March 2025).
3.4.2. National Innovation Policy 2030
It is an important first step that the Dominican Republic has acknowledged these innovation challenges and aims to address many of them through the National Innovation Policy 2030 (PNI). Formally approved through Decree 278-22, the PNI was published in 2022 and is structured around three main objectives (Presidencia, 2022[119]). The first objective is to develop human capital with the skills required to participate in the knowledge economy and fourth industrial revolution.
The second is to establish an effective governance framework for the Dominican Republic’s innovation ecosystem. To achieve this objective, the PNI prioritises several actions. These include creating a National System of Innovation Indicators and conducting a National Innovation Survey. Other actions relate to establishing a network of Innovation Laboratories, signing a National Innovation Pact to secure the support of all sectors of the economy and society, and developing a National Plan to Promote Intellectual Property.
The third objective is to increase investment in RD&I to 1% of GDP by 2030. Actions to support this objective include the creation of an Innovation Support Fund (Fondo de Apoyo a la Innovación, FAI), which would see the Dominican government co-finance business innovation, although the FAI has not yet been established and it remains to be seen how it would complement the existing FONDOCYT. The PNI also calls for the establishment of a National Network of Public-Private Incubators to support innovative start-ups. The PNI sets milestones for all these actions for 2024, 2027 and 2030 (Gabinete de Innovación, 2022[109]).
The PNI’s choice of objectives is sensible but its implementation is inconsistent. Of the actions listed in the previous paragraphs, only the National Innovation Survey appears to be on track – as the National Statistics Office (ONE) successfully conducted a survey of innovation in businesses in 2022 – and many actions are not meeting their milestones or have not even started. Therefore, the recommendations in this report focus on putting in place strong fundamentals for the Dominican Republic’s STI ecosystem. These fundamentals would support both the development of a semiconductor industry and the country’s economic development more broadly.
3.4.3. Fundamentals for enhancing the STI ecosystem
The Dominican Republic must build on the progress of ONE’s National Innovation Survey by mapping the existing, decentralised sources of R&D data – which are currently collected by, amongst others, ONE, MESCyT and the Ministry of Finance – and then formalising and centralising the R&D data collection process in one lead agency. Given that no Dominican government agency currently collects, validates, organises and publishes STI indicators on a regular basis, it is likely that the agency staff may, in the first instance, require training. The agency in charge of the new centralised R&D data collection should adhere to international statistical standards, such as the OECD Oslo Manual, which sets standards for constructing indicators of technological innovation (OECD/Eurostat, 2018[120]), and the Frascati Manual, which establishes a methodology for collecting and using R&D statistics (OECD, 2015[121]). The development of robust STI indicators would also align with a recent OECD legal instrument which commits to promoting “reliable, trustworthy, and internationally comparable official data in alignment with FAIR principles [findability, accessibility, interoperability, and reusability], statistics and empirical evidence in science, technology, and innovation” (OECD, 2024[122]).
As with the lack of reliable R&D data, it is a step in the right direction that the PNI and Digital Agenda both already recognise that low R&D investment is an area for improvement (Gabinete de Transformación Digital, 2021[123]). To increase R&D investment, the Dominican Republic could introduce an R&D tax credit to incentivise private R&D and innovation by making eligible investments financially advantageous to firms. As set out in Section 3.2, firms in the free zone regime have a 100% exemption on corporate income tax, so the MICM, the Ministry of Finance and others must consider the most suitable approach for the R&D tax credit to incentivise firms with no tax liability. A refundable tax credit would allow firms with no tax liability to claim the full value of the credit by receiving a refund from the government, typically worth the difference between the tax credit and liability. These refunds could incur a fiscal cost, at a time when the government is looking to limit expenditure in line with the Fiscal Responsibility Law (see Box 3.1). However, if the rates of business R&D are as low as the data suggest, the introduction of refundable R&D tax credits should initially be relatively inexpensive for the Dominican government. Refundable tax credits are less complex to administer than, for example, transferrable tax credits and hence are on balance preferable.
The R&D tax credit must be carefully designed to achieve the desired policy objective. The Dominican Republic should carefully define the R&D activities and costs that are eligible for the tax credit. It is also important to consider the rate of the tax credit and whether there should be a cap on the cost of the credit, to minimise its fiscal impact. The tax credit should align with other types of R&D support (such as grants – see below) and other tax incentives (such as the free zone tax exemptions). It is also critical that the tax credit is straightforward for the government to administer and does not place a significant administrative burden on firms, while guarding against abuse. In general, the R&D tax credit should be available to firms both inside and outside the free zone regime and support a broad range of sectors, to encourage innovation across the economy. If designed and implemented correctly, the R&D tax credit could increase private investment in R&D and foster greater industry-academia collaboration.
Alongside introducing an R&D tax credit, the Dominican Republic should significantly reform FONDOCYT and increase the funding available for RD&I grants. In overhauling FONDOCYT, the Dominican Republic should draw on past OECD research on innovation agencies, which recommends clear governance rules for the agency and formal co‑ordination mechanisms, stronger links between the design and implementation of funding programmes, and robust M&E (OECD, 2017[124]). If the Innovation Support Fund (FAI) is ever established (see Section 3.4.2 on the National Innovation Policy), the Dominican Republic should consider carefully how FONDOCYT and the FAI interact with one another, to avoid duplication between the two institutions.
The Dominican Republic should also consider best practices for innovation agencies in upper-middle income countries. A World Bank report examines case studies from Colombia, Serbia, South Africa and other countries to suggest that effective innovation agencies should have a clear but adaptable mission, sustainable funding, strategic partnerships, capable staff, and adopt diagnostic-based interventions and strong M&E (World Bank, 2019[125]). These principles could offer guidance to the Dominican Republic as it reforms FONDOCYT to ensure that it can support the development of a semiconductor ecosystem.
Whereas R&D tax credits give firms the flexibility to decide which projects to invest in, the Dominican Republic should consider whether the reformed FONDOCYT should prioritise certain strategic sectors and technologies for R&D grants, such as semiconductors and microelectronics. The FONDOCYT reforms should also remove the barriers to firms accessing R&D funding and leading FONDOCYT-funded projects; currently only academic institutions can lead FONDOCYT projects (MESCyT, 2009[114]).
This section focuses on three types of infrastructure that support the development of a semiconductor ecosystem: electricity, water and transport. Analysis suggests that the Dominican Republic’s electricity and water infrastructure have areas for improvement, but its transport infrastructure is one of the country’s strengths.
3.5.1. Electricity
Stable and affordable energy is a critical input for semiconductor manufacturing. The semiconductor industry relies on electricity for many processes, including operating specialised equipment and regulating the manufacturing plant’s temperature and other aspects of its environment. Although semiconductor ATP is typically less electricity-intensive than the wafer fabrication stage of the value chain, it still depends on a strong electricity supply. More broadly, low electricity prices are associated with a competitive manufacturing sector and a dynamic business environment, which can favour inward FDI.
The institutional landscape for the Dominican Republic’s electricity sector is complex. The Ministry of Energy and Mines (MEM) oversees the country’s energy sector, which includes policymaking for the electricity sector. The National Energy Commission (CNE) issues recommendations relating to granting electricity concessions, manages applications for renewable energy incentives and has some policymaking and regulatory functions. The Electricity Superintendence (SIE) is the electricity regulator and is responsible for setting electricity tariffs. The General Electricity Law 125-01 established the CNE and SIE. Law 100-13 established MEM and made the CNE and SIE accountable to it (Congreso Nacional, 2013[126]). Historically, however, the mandates of all three institutions have overlapped, giving rise to disagreements (EIU, 2015[127]). While MEM, the CNE and SIE set the policy and regulatory frameworks for the country’s electricity sector, the Coordinating Body has a primarily operational role, as it oversees transactions in the wholesale electricity market and manages the national interconnected electricity system (SENI). Most, but not all, of the electricity produced in the Dominican Republic is connected to the SENI, which brings together electricity generation, transmission and distribution infrastructure.
The Dominican state’s involvement in the electricity market varies by segment. In the generation segment, firms can be privately owned (e.g. Punta Cana-Macao Energy Consortium, CEPM), state-owned (e.g. Dominican Hydroelectric Generation Company, EGEHID) or public-private (e.g. Haina Electricity Generation Company). Private firms play the largest role, accounting for 73% of electricity generated in 2022 (IFC, 2023[42]). The generation segment also includes auto-producers, which are firms or other entities that generate electricity for their own consumption and can sell their surplus electricity to the SENI or other third parties. In the transmission segment, the state-owned Dominican Electricity Transmission Company (ETED) has a monopoly. The distribution segment is dominated by three regional state-owned enterprises (SOEs): EDEsur, EDEnorte, EDEeste, referred to collectively as the EDEs. Until 2021, the Dominican Corporation of State‑Owned Electricity Enterprises co‑ordinated the activities of all electricity SOEs, but it was dissolved by Decree 342-20 and replaced by the Unified Council of the Distribution Companies (Consejo Unificado de las Empresas Distribuidoras, CUED) due to mismanagement and a lack of government oversight (World Bank, 2023[128]). The average electricity price for industrial users in the Dominican Republic is approximately USD 0.16 per kilowatt-hour (IMF, 2024[34]).
On the whole, electricity is a challenge for the Dominican Republic’s manufacturing sector. According to one survey, free zone firms named electricity as one of their top three bottlenecks in the Dominican Republic (World Bank, 2022[91]). Despite this, the reliability and affordability of electricity is generally significantly better for firms in the free zones than in other parts of the economy. This is because many free zone firms benefit from the status of non-regulated user of the SENI.
To qualify as a non-regulated electricity user, a firm must have a power demand of at least 1 megawatt (MW) and receive authorisation from the SIE by fulfilling the requirements in resolution SIE-040-2013 (Congreso Nacional, 2001[129]; SIE, 2013[130]).6 Non-regulated users are authorised to negotiate directly with electricity generators in the wholesale market; as large electricity consumers, non-regulated users are typically able to secure prices cheaper than the regulated electricity tariff that regulated users must pay. This also allows non-regulated users to bypass the EDE electricity distribution companies and avoid some of their outdated distribution infrastructure, improving the reliability of their electricity supply. In contrast, the majority of electricity consumers in the Dominican Republic are regulated users, relatively small electricity consumers that pay the regulated electricity tariff set by the SIE and receive their electricity through the state-owned EDE distribution companies. As of early 2025, the SIE had authorised 249 entities to operate as non-regulated users (SIE, 2025[131]). Although non-regulated users represent a small minority of electricity consumers, their share of electricity demand is increasing, from about 8% of total SENI demand in 2010 to 12% in 2020 (CNE, 2022[132]).
It is a reasonably safe assumption that semiconductor or microelectronics firms in the Dominican Republic would benefit from the more reliable and affordable electricity supply of non-regulated users. It is possible that these firms could become non-regulated users in their own right, by receiving authorisation directly from the SIE. Alternatively, some free zone industrial parks also qualify as non-regulated users and are then able to supply electricity to the firms located in their parks on favourable terms. Park operators interviewed for this report noted that their status as non-regulated users is an important factor in attracting firms to establish their operations.
Electricity generation
The Dominican Republic has an installed electricity generation capacity of 5 985 MW and, in 2024, total electricity generated was 23 067 gigawatt hour (GWh) (OC, 2025[133]). However, annual electricity demand is expected to increase substantially by 2030, with some projections suggesting at least 30 000 GWh (Government of Canada, 2024[134]; UASD, 2025[135]). The growth of semiconductor and microelectronics industries would increase electricity demand even further, so it is necessary to expand generation capacity. This broadly aligns with Presidential Decree 3-24, issued in January 2024, that called for the development of electricity generation projects, from both traditional and renewable sources (Presidencia, 2024[136]).
The Dominican Republic should focus on expanding its capacity for renewable generation to meet the growth in national electricity demand, including from non-regulated users such as advanced manufacturing firms and industrial parks. As of 2023, fossil fuels accounted for 84% and renewables for the remaining 16% of the Dominican Republic’s electricity generation, with hydropower accounting for 5.9%, wind for 4.7%, solar photovoltaic for 4.9% and biofuels for 0.9% (IEA, 2023[137]). Figure 3.3 shows that this share of renewables in electricity generation is comparable to Mexico but much lower than in countries such as Costa Rica, Brazil and Peru. The Dominican Republic relies heavily on imported fossil fuels, so accelerating the deployment of renewables could reduce this import dependence and help to shelter Dominican industry from supply disruption and global fuel price shocks.
Sources: OECD calculations based on IEA (n.d.[138]), Countries and regions (database), https://www.iea.org/countries (accessed on 15 October 2025). Latest data available for Costa Rica, Mexico and Brazil are from 2024. Latest data available for Dominican Republic and Peru are from 2023.
Expanding renewable generation would also reduce the carbon intensity of the Dominican Republic’s electricity supply and support the country to meet its national and international climate commitments. Law 57-07 set the target that 25% of the Dominican Republic’s electricity should be generated from renewable sources by 2025 (Congreso Nacional, 2007[139]). The country subsequently set a further target that renewables should account for 30% of electricity generation by 2030 (MEM, 2022[140]). The Dominican Republic has also submitted to the United Nations Framework Convention on Climate Change its plans for a 27% reduction in greenhouse gas emissions by 2030 relative to the business-as-usual scenario, and it aims to reach net-zero emissions by 2050 (Government of the Dominican Republic, 2020[141]).
The main policy tools for increasing renewable energy capacity are set out in Law 57-07. As with the incentives in the free zone regime (see Section 3.2.1), Law 57-07 relied primarily on tax exemptions. These included a 100% exemption on import tax and the ITBIS value-added tax on certain equipment and machinery required for renewable energy generation, as well as a 10-year corporate income tax exemption on income earned from renewable electricity generation or the sale of relevant equipment and machinery. Law 57-07 also provided a tax reduction on interest payments for the foreign financing of renewable energy projects, offered a feed-in tariff for renewable electricity, and introduced a 75% tax credit on the cost of capital equipment for auto-producers of renewable energy (Congreso Nacional, 2007[139]). However, fiscal reforms contained in Law 253-12 subsequently removed the corporate income tax exemption and reduced the tax credit for auto-producers from 75% to 40% (Congreso Nacional, 2012[142]). Despite these cuts, the impact of the Dominican Republic’s renewable energy incentives appears to have been broadly positive, as the share of electricity generated from renewable sources doubled between 2015 and 2021 (WTO, 2022[79]).
Nonetheless, the Dominican Republic should increase further its renewable generation capacity to support, amongst other sectors, its semiconductor and microelectronics industries. The Dominican Republic can take several measures to incentivise and facilitate private investment in renewables. First, the Dominican Republic should streamline the onerous permitting process for renewable energy projects. Throughout the entire process – from obtaining the provisional energy concession until the start of the renewable facility’s operations – prospective investors need to engage with approximately 19 different government agencies (GIZ, 2020[143]). Challenges include a lack of digitisation, which requires manual or paper-based input; repeated requests and duplications from the different agencies; a lack of standardisation across these institutions; and a lack of consequences for any institution that causes a delay to the process or fails to respond to the prospective investor. Some of these challenges are similar to the administrative burdens previously analysed in the context of the free zone regime (see Section 3.2.2) and construction and environmental permits (see Section 3.3.4).
In 2024, ProDominicana integrated the energy sector into the One-Stop Shop for Investment (Presidencia, 2024[144]). This represents a positive step toward streamlining investment processes. Merging renewable energy investments into an existing one-stop shop, as opposed to creating a new standalone one-stop shop, is a pragmatic approach (see also Section 3.3.1). Nevertheless, this measure alone is insufficient: while the One-Stop Shop for Investment provides a clearer overview of the steps required for renewable energy investment, it has yet to address all of the administrative challenges highlighted in the previous paragraph. Therefore, the Dominican Republic will need to continue efforts to improve the renewable energy permitting process and reduce approval timelines. The provisions from the European Union’s 2024 Net-Zero Industry Act, such as accelerated permitting processes for renewable projects and priority handling in dispute resolutions, might be examples to consider (European Parliament, 2025[145]).
As a second recommendation to increase renewable electricity generation, the Dominican Republic should ensure that its public tenders for renewable projects proceed smoothly and transparently. In 2023, Decree 65-23 introduced the requirement that competitive public bidding processes should be used to set the electricity prices for long-term renewable electricity contracts (Presidencia, 2023[146]; Ministerio de Hacienda, 2024[147]). In theory, inviting renewable energy developers to submit bids will increase competition and drive down electricity prices, and the long-term contract can provide the certainty to increase investor confidence and unlock financing. However, in practice, this type of public bidding process remains relatively new in the Dominican Republic, so it is important that these tenders are carefully implemented, set out clear terms and conditions and allow electricity policymakers to learn lessons that can be adopted for subsequent tenders. For example, in April 2025, MEM announced its intention to launch a tender for renewable energy and battery storage, although energy stakeholders expressed some concern that they were insufficiently consulted on the proposed terms of the tender and that key details relating to the tenders remained uncertain (CNE, 2025[148]; Future Energy Summit, 2025[149]).7 This 2025 tender is an important opportunity to continue enhancing the transparency and predictability of the tender process and further increase investor confidence.
Third, the Dominican Republic could consider increasing electricity generation from auto-producers. There are currently limits on auto-producers’ electricity generation. According to Decree 202-08, auto-producers are limited to a capacity of 1.5 MW and they cannot sell more than 50% of their electricity generated to the SENI or third parties (Presidencia, 2008[150]). These limits serve an important function, as they are designed to preserve grid stability and maintain a clear regulatory distinction between auto-producers and commercial electricity generators. Nonetheless, Article 96 of Decree 202-08 allows auto-producers that use biomass as their primary energy source to request an expansion of their installed generation capacity above 1.5 MW (Presidencia, 2008[150]). Based on this precedent, the Dominican Republic could explore the feasibility of raising the 1.5 MW limit on generation capacity for auto-producers of all types of renewable electricity, not just biomass. Similarly, the Dominican Republic could consider raising the 50% limit on the share of their electricity that auto-producers are allowed to sell.
The Dominican Republic should be mindful of the possible fiscal consequences, as raising these limits could also increase the number of auto-producers eligible for renewable energy tax credits under Law 57‑07 (see above). Nevertheless, expanding auto-production is a plausible option for increasing the total renewable electricity supply in the Dominican Republic and so merits further examination. It is also worth noting that the Dominican Republic’s industrial sector plays an important role in the country’s electricity auto-production, with 42% of total auto-production generated by industrial firms (CNE, 2022[132]). This suggests that firms in the semiconductor or microelectronics industries could be well placed to become auto-producers.
In parallel to expanding renewable electricity supply, the Dominican Republic should also seek to manage electricity demand. Actions on energy efficiency can contribute to making energy more affordable, promote energy security and support climate goals (IEA, 2022[151]; 2023[152]). Decree 158-23 mandates energy efficiency measures in government buildings and across the public administration. For example, the public administration must adhere to requirements relating to air conditioning, lighting, refrigeration and vehicles (Presidencia, 2023[153]). However, these measures do not extend to other parts of the economy, such as the private sector or residential consumers of energy. According to MEM, the Dominican Republic is one of the few countries in the region that does not have a regulatory framework relating to energy efficiency (Suelo Solar, 2024[154]). A draft law on energy efficiency was first approved by the Senate in 2023, but it has not yet been passed by the Chamber of Deputies. The draft law proposed measures to promote energy-efficient technologies and encourage behavioural change amongst consumers (Senado, 2023[155]). The Dominican Republic should strengthen its efforts to conserve energy and pass legislation on energy efficiency. Conserving energy in other parts of the economy could help to ensure sufficient energy supply for advanced manufacturing, including semiconductors and microelectronics firms.
Electricity transmission and distribution
The Dominican Republic should also expand and upgrade its electricity transmission network. Improving the country’s transmission infrastructure is especially important to integrate renewable energy into the SENI. For example, the areas with the highest potential for wind power are in the north, southwest and east of the country, which are relatively distant from the main load centres in Santiago and, in particular, Santo Domingo (IRENA, 2016[156]). Investing in transmission infrastructure helps to transfer electricity from the locations where renewable energy is generated to the demand centres, improving grid stability and minimising the uneconomic curtailment of renewable power.
The Dominican Republic’s public investment in electricity – including transmission – is 0.17% of GDP, below the regional average (0.20%) (OECD, 2022[96]). It is therefore encouraging that MEM announced plans to invest USD 450 million in electricity transmission between 2024 and 2028, principally in the south of the country (MEM, 2024[157]). Additionally, the Dominican Republic issued its first sovereign green bond in 2024, raising USD 750 million (see Box 3.4). The Dominican Republic could consider allocating some of this financing to transmission infrastructure.
In June 2024, the Dominican Republic issued its first sovereign green bond in international markets, which was also the first sovereign thematic bond from the Caribbean and Central America region. The bond raised USD 750 million with a 12-year maturity. The annual coupon was 6.6%, 15 basis points lower than conventional bonds, indicating high demand from investors. According to the Dominican government, the green bond could help to finance or re-finance several categories of projects with a positive environmental impact. These categories include:
renewable energy
efficient and resilient management of water and wastewater
low-carbon transport
climate change adaptation
natural resources, land use and marine protected areas.
Given the alignment between these projects and some of the infrastructure investments suggested by this report, the Dominican Republic’s green bond could play a role in developing the infrastructure for the semiconductor and microelectronics ecosystems.
Sources: GGGI (2024[158]), Dominican Republic’s Green Bond Debut (USD 750 Million), https://gggi.org/dominican-republics-green-bond-debut-usd-750-million-after-publication-of-green-social-sustainable-bonds-framework/; World Bank (2024[159]), “Investing in a Greener Future: Successful Debut of the Green Bond in the Dominican Republic”, https://blogs.worldbank.org/en/latinamerica/invertir-futuro-debut-bono-verde-republica-dominicana; Sustainalytics (2025[160]), “Government of the Dominican Republic: 2024 Green Bonds Allocation Review”, https://www.creditopublico.gob.do/Content/emisiones_de_titulos/asg/opiniondesegundaparte/.
The most serious challenges facing the Dominican Republic’s electricity sector relate to the distribution segment. It is possible that distribution challenges would not directly affect semiconductor or microelectronics firms, since these firms are expected to be non-regulated electricity users operating in the free zones. Their non-regulated status could allow some of these firms to bypass the distribution infrastructure controlled by the state-owned electricity distribution companies. Nonetheless, the technical, operational and financial challenges of the distribution segment have an impact on the Dominican Republic’s broader industrial ecosystem and fiscal position. Consequently, it is worth analysing the nature of these challenges and considering possible solutions.
In 2024, approximately 37% of electricity generated was lost during the distribution segment before the electricity could reach a paying consumer (MEM, 2024[161]). The Dominican Republic’s distribution losses are amongst the highest in the region, far higher than Panama (13%), Mexico (12%) or Costa Rica (8%) (CREES, 2025[162]). The electricity losses can be classified as technical or non-technical. Technical losses relate to outdated equipment and infrastructure – for example power lines, transformers or substations – which contribute to overcharged distribution lines and a lower power factor, increasing the likelihood of electricity losses. Non-technical losses, which make up most of the electricity losses, arise from electricity theft and illegal connections, unmetered electricity and fraud (World Bank, 2023[163]).
These electricity losses contribute to the chronic financial deficits of the EDEs, the state-owned distribution companies. Another major cause of these deficits is the EDEs’ shortfall in electricity tariff revenue. The SIE regulator sets a below-cost electricity tariff – partly to insulate consumers from increases in fuel prices and inflation – which does not accurately capture the full costs of generation, transmission and distribution. As a result of this low electricity tariff, there is a gap between the price at which the EDEs can sell electricity to end users and the higher cost of electricity production. The EDEs therefore make large financial losses on the electricity that they sell, recovering only 60% of their costs in 2024 (MEM, 2024[161]). The country’s National Energy Plan 2022-2036 states that “the EDEs’ financial unsustainability is the greatest challenge currently facing the Dominican electricity system” (CNE, 2022[132]).
The financial distress of the EDEs creates a heavy fiscal burden on the Dominican government. The government makes very large transfers to the EDEs – worth more than 1% of GDP per year (IMF, 2024[34]) – to close the gap between electricity production costs and distribution prices. To continue subsidising the EDEs, the Dominican Republic has diverted public funding away from electricity investment to cover losses by the EDEs or to address other current expenditure needs (OECD, 2022[96]; EIU, 2015[127]). Consistent under-investment in electricity infrastructure creates a vicious circle, making it more difficult to improve the outdated distribution equipment and infrastructure, leading to continued losses and ongoing government subsidies. The fiscal burden of the EDEs also reduces the Dominican Republic’s ability to provide funding for other parts of the semiconductor and microelectronics ecosystem, such as renewable electricity generation and transmission or R&D.
As a result of these challenges in the distribution segment, the Dominican Republic’s electricity sector has significant operational challenges. On average, customers on the public grid suffered 19 interruptions and 24 blackout hours per month in 2022, much higher than the regional average (World Bank, 2023[163]). Firms in the Dominican Republic lose on average 5% of their sales due to power outages, the second-highest in the LAC region (World Bank, 2018[40]). These outages disproportionately affect regulated users, such as firms outside the free zones. Outages require local firms to use generators which increases their operating costs; the Association of Industries of the Dominican Republic (AIRD), which represents firms in the local economy, says that these outages have decreased the competitiveness of its members (Renovables Verdes, 2024[164]).
The distinction between regulated users – smaller consumers of electricity that pay the regulated electricity tariff and are more exposed to power outages – and non-regulated users – larger consumers that can negotiate a lower tariff and are largely sheltered from outages – risks widening the divide between firms in the local economy and firms in the free zones. This has several implications for linkages (see also Section 3.2.3). The higher electricity costs of regulated users in the local economy increase their manufacturing costs and hence reduce their competitiveness compared to firms in the free zones or international firms. This creates an additional obstacle to supplying inputs to advanced manufacturing firms in the free zones. Furthermore, the probability of a firm holding an internationally recognised quality certificate – a factor that supports domestic linkages – decreases with losses due to power outages. As noted previously, outages predominantly affect regulated users in the local economy.
The Dominican Republic should reverse its under-investment in distribution infrastructure to tackle some of the underlying causes of power outages and the EDEs’ high electricity losses. To address the technical losses, the Dominican Republic should upgrade distribution networks, invest in transformers and rehabilitate electricity circuits. To address the non-technical losses, it should invest in secure connections and additional electricity meters with anti-tampering controls (EIU, 2015[127]). The recent announcement by MEM of investments worth USD 300 million into distribution infrastructure over the next four years is a welcome development (MEM, 2024[157]). Multilateral organisations like the World Bank are also providing technical expertise and financial support to reform the Dominican Republic’s electricity distribution system. Nonetheless, it is essential that this funding is effectively allocated and used for the intended infrastructure improvements. Ensuring that these resources are directed toward long-term investments, rather than current expenditures such as covering the EDEs’ operational deficits, will be critical to achieving meaningful reform.
A complementary measure to improve electricity distribution in the Dominican Republic would be for the SIE to raise the tariff that the EDEs are allowed to charge regulated users. Such a reform has long been under consideration, both domestically and internationally. The Dominican Republic’s National Pact for the Reform of the Electricity Sector 2021-2030 (Pacto Nacional para la Reforma del Sector Eléctrico) committed to cost-reflective electricity tariffs (Presidencia, 2021[165]). The National Energy Plan 2022-2036 argued that the electricity tariff should allow the EDEs to recover their costs (CNE, 2022[132]). The World Bank and International Monetary Fund have advocated for a review of the Dominican Republic’s tariff scheme, ultimately leading to an increase in the electricity tariff (IMF, 2024[34]; World Bank, 2023[73]). In 2021, the SIE initiated quarterly tariff increases, the first time the tariff had been increased since 2011. However, in response to popular protests, in 2022, the SIE chose to delay further tariff increases to help consumers deal with inflationary pressures (World Bank, 2023[128]).
There are strong arguments for the SIE to resume periodic increases in the electricity tariff. Such adjustments would help to ease the financial burden on the state-owned EDEs and the consequent fiscal burden on the government, ensuring consistency with the Fiscal Responsibility Law (see Box 3.1). The Dominican Republic could use any resulting fiscal space to invest in electricity distribution infrastructure. However, there are also valid concerns regarding further tariff increases at this point in time. Stakeholders consulted as part of this project noted that higher electricity tariffs for regulated users could raise manufacturing costs for the local industry and undermine their competitiveness, potentially limiting their ability to establish linkages with the free zones. There are also concerns about the impact of increased electricity tariffs on households, particularly amongst poor and vulnerable social groups (World Bank, 2022[166]).
Complementary measures, such as investment in distribution infrastructure to reduce electricity losses, energy efficiency measures to reduce consumption or increased renewables generation, could all lower the costs of the overall electricity provision. This, in turn, would help reduce the gap between the electricity costs incurred by the EDEs and the tariff revenue they receive, thereby also reducing the value of the state subsidy to the EDEs. On balance, the appropriate level of the electricity tariff is an area that the Dominican Republic should assess more carefully, with attention to its impact on all stakeholders. In the medium to long term, however, the gradual transition toward a cost-reflective tariff appears necessary to ensure the sustainability of the electricity system.
3.5.2. Water
Water is another important input for semiconductor manufacturing. As with electricity, the ATP segment tends to consume less water than wafer fabrication. However, ATP still requires water for many processes including cleaning components to remove dust or contaminants and controlling temperature and humidity. Semiconductor manufacturing requires the water supply to fulfil two broad conditions: it must be abundant and pure.
The Dominican Republic could face challenges in providing both the quantity and quality of water needed for semiconductor manufacturing. The country has lost more than half of its per capita water resources since the mid-1990s, due to population and economic growth, poor management of water resources and climate change (World Bank, 2018[40]). As of 2021, the Dominican Republic’s level of water stress – represented by the proportion of its total freshwater resources withdrawn to meet the country’s water demand – was 40%, considerably higher than in Costa Rica (6%) or Panama (1%) and one of the highest in the region (World Bank, 2021[167]).
Many free zone industrial parks attempt to shelter their firms from this water stress by providing water services: for example, PIISA Industrial Park in the San Cristóbal province allows firms to access a water reservoir with a large storage capacity (PIISA, 2025[168]). However, the country’s water scarcity is only expected to worsen with projections of a 25% decrease in freshwater resources and a 15% decrease in average precipitation by 2050 (UNCTAD, 2021[7]; MIMARENA, 2017[169]). Water scarcity is particularly acute around the Yaque del Norte river basin, where more than 93% of the renewable surface and groundwater supply is used every year (UNEP, 2022[170]). This could be problematic for the emergence of the Dominican Republic’s semiconductor and microelectronics industries, as the Yaque del Norte serves the city of Santiago de los Caballeros and other parts of the Cibao Norte region, which is home to a large number of industrial parks and has the potential to develop a microelectronics cluster.
As for water quality, the situation in the Dominican Republic is also challenging. Just 53% of water treatment plants and 26% of wastewater plants operate adequately (World Bank, 2020[171]). Approximately 40% of wastewater collected by sewerage systems is treated, which places the Dominican Republic above countries such as Costa Rica (4%) and Panama (13%) but below Mexico (46%) (World Bank, 2021[172]). However, it should be noted that the remaining 60% of wastewater collected by the Dominican Republic’s sewerage network is discharged untreated and, moreover, only a small share of total wastewater generated (7.3%) is actually collected by the sewerage network; most wastewater enters the ground or bodies of water directly (UNEP, 2022[170]). As with water supply, many industrial parks provide water treatment as a service to their firms: for example, PISANO Industrial Park, located in Santiago Norte, has a wastewater treatment plant. However, this is the initiative of individual parks and is not the result of government water policy.
The Dominican Republic’s water-related challenges can be attributed to several causes. Some causes relate to the country’s geography and its vulnerability to drought. But, as with the Dominican Republic’s challenges with electricity, many of the causes are institutional, operational and financial. Multiple studies have noted the fragmentation of water management responsibilities between MIMARENA, the National Institute for Hydraulic Resources (Instituto Nacional de Recursos Hídricos, INDRHI) and the nine decentralised government agencies that provide water and sanitation services to different regions of the country, such as the National Institute for Drinking Water and the Sewage System (Instituto Nacional de Aguas Potables y Alcantarillados, INAPA) (RVO, 2021[173]; World Bank, 2023[174]).
Inter-institutional co‑ordination and effective water management is made harder by the absence of high‑quality data, as water systems often lack instrumentation to determine water consumption and the nine state-owned water and sanitation firms file incomplete financial reports and are only sporadically audited (World Bank, 2023[174]). Water losses can be as high as 60% – due to clandestine connections, poor infrastructure and a lack of metering – which means that less than 30% of service providers’ operational costs are recovered. As a result, the government heavily subsidises the nine SOEs that dominate the water market (RVO, 2021[173]).
To address concerns around the Dominican Republic’s water supply, the MICM should work with MIMARENA to support industrial parks to implement rainwater harvesting systems. These systems have been effective in Chinese Taipei to collect and store water from typhoons and reuse the water in industrial parks. For example, Yunlin Technology Industrial Park – home to semiconductor firms – is able to recycle 20 000 tonnes of rainwater per day, equivalent to Chinese Taipei’s entire water consumption for 42 days (Taiwan Trade Shows, 2023[175]). Between 2003 and 2013, advances in rainwater harvesting increased the rate of water reuse in industrial parks from 46% to 69% (Water Resources Agency, 2017[176]). Given that the Dominican Republic is a hurricane-prone country, rainwater harvesting could be an opportunity to increase the water supply available to industrial parks and their firms.
To improve water and wastewater treatment, the Dominican Republic should increase investment in water infrastructure. Public investment in water and sanitation infrastructure in the Dominican Republic (0.04% of GDP in 2019) has been consistently below the LAC average (0.16%) (OECD, 2022[96]). Greater public investment could help repair and expand infrastructure for water transmission and treatment, increase metering and reduce water losses. One possible means of financing this investment is through the new green bond, issued in 2024, which is expected to finance several infrastructure projects including water and wastewater management (see Box 3.4). The Dominican Republic should also incentivise firms to invest in water recycling and treatment technologies, for example through preferential water tariffs.
3.5.3. Transport
Transport infrastructure connects a country’s semiconductor industry to global supply chains. The semiconductor industry depends on several modes of transport. Air transport is well suited to the small size and weight of semiconductors and electronic components, and also allows global supply chains to comply with just-in-time production processes. Maritime freight often transports semiconductor inputs, particularly those which are bulky, stable, less sensitive to light and heat and less time-sensitive (OECD, 2024[177]; Son et al., 2024[178]). A network of roads is required to transport semiconductor-related imports and exports between the country’s airports and maritime ports and the semiconductor manufacturing plants. More broadly, a strong transport system can decrease delivery times, reduce transport costs and enhance an economy’s productivity and competitiveness.
The Dominican Republic’s transport sector is a strength as the country seeks to attract semiconductor firms. The WEF Global Competitiveness Index ranks the Dominican Republic highly for all three of the main modes of transport described in the previous paragraph: the Dominican Republic ranks second in the LAC region for air transport infrastructure quality, equal-second for port infrastructure quality and third for roads quality (WEF, 2021[179]). The World Bank finds that only 13.8% of firms in the Dominican Republic identify transport as a major constraint, well below the average for upper-middle income (24.35%) or regional (27%) countries (World Bank, 2022[180]). According to the World Bank’s 2022 Logistics Performance Index, the quality of the Dominican Republic’s trade and transport-related infrastructure scored 2.7 out of 5, slightly above the LAC regional average (2.55) and an increase on the Dominican Republic’s previous score of 2.36 in 2018 (World Bank, 2023[181]). Representatives from industry, industry associations and government interviewed for this report also recognised the Dominican Republic’s transport infrastructure as an advantage for developing semiconductor and microelectronics ecosystems. Moreover, the Dominican Republic joined the International Transport Forum in 2024, which is a sign of its commitment to further improve its transport policies and continue developing its infrastructure.
The Dominican Republic has eight airports serving international flights, including three important hubs: Las Américas International Airport (close to Santo Domingo), Punta Cana International Airport (which serves the eastern region) and Puerto Plata International Airport (which serves the north of the country). Of particular relevance to the semiconductor industry, Las Américas has the technical infrastructure and trained personnel to receive and store temperature-sensitive and hazardous cargo. However, the high volumes of traffic passing through the airport can lead to delays in customs processing and clearance (Logistics Cluster, 2024[182]).
The Dominican Republic has 13 commercial maritime ports, but traffic is highly concentrated, with 70% of all traffic (by tonnage) handled by just two ports, Caucedo and Haina. Relatedly, there is a regional imbalance in the Dominican Republic’s port infrastructure: while Caucedo and Haina are both located near to Santo Domingo on the south coast, the northern ports of Manzanillo and Puerto Plata only account for 5-6% of total tonnage (World Bank, 2022[180]). Caucedo and Haina are also the two most sophisticated ports in the country. Caucedo, situated close to Las Américas International Airport, has deep-water berths, advanced cargo handling equipment and fast dispatch ports for sensitive cargo. The port currently handles a range of products including electronics and automotive parts (Logistics Cluster, 2024[182]). Haina has specialised berths for handling liquid chemicals. The geographic imbalance in port facilities should be taken into account in discussions on where a semiconductor or microelectronics cluster could develop (see Section 3.2.4).
The Dominican Republic’s road network – which totals 20 000 kilometres – faces slightly greater challenges. The majority of the country’s primary road network is deemed by the Logistics Cluster to be in either good (36%) or fair (32%) condition (Logistics Cluster, 2024[182]), which is important for semiconductor ATP machinery which requires high-quality roads to avoid losing calibration during transport (OECD, 2024[177]). However, secondary and tertiary roads – which account for more than 70% of the Dominican Republic’s total network – tend to be in poorer condition and require rehabilitation. There are also some concerns about the price of road freight, which can be attributed in part to the high average age of the motor freight fleet (over 20 years old), which increases maintenance costs and reduces productivity (IFC, 2023[42]).
Congestion affects road traffic in and around important production and logistics hubs (such as Caucedo, Haina and Santo Domingo). This is a challenge that the Santo Domingo 2050 initiative should seek to address (see Section 3.2.4), by developing more public transport services. To facilitate workers’ travel to their manufacturing facilities, many free zone industrial parks provide transport services for their employees (DR Free Zones, 2024[183]). The Dominican Republic’s first sovereign green bond has also earmarked some financing for expanding the Santo Domingo Metro, constructing the first line of the Santiago monorail and building cable car facilities in Santiago and Santo Domingo and in Santo Domingo (see also Box 3.4). This could contribute to easing the congestion.
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← 1. Free zones that are not overseen by the CNZFE are outside of the scope of this report. For example, commercial free zones (zonas francas comerciales), which sell goods in hotels, airports and other tourist centres, are not analysed.
← 2. Services free zones focus on services including, but not limited to, call centres, financial services or information technology. Special free zones are for sectors that must operate in a specific geographic area, for example agribusiness.
← 3. Not all industrial parks come under the free zone regime. In addition to the 93 free zone industrial parks, the Dominican Republic has other industrial parks that operate outside of the free zone regime and support non-free zone firms in the local economy (see Section 3.2.3).
← 5. Absorptive capacity is defined as “the ability of a firm to recognise the value of new, external information, assimilate it, and apply it to commercial ends” (Cohen and Levinthal, 1990[184]). R&D is an important determinant of a firm’s absorptive capacity and its innovative capabilities.
← 6. Resolution SIE-040-2013 sets out the legal and administrative requirement for firms to qualify as non‑regulated users (detailed in Annex A of the resolution) and technical requirements (Annex B of the resolution). Legal and administrative requirements include submitting a letter of application to the SIE and all relevant corporate documentation. Technical requirements include evidence of electricity demand and compliance with grid interconnection standards, safety and metering criteria. Applicants to become non‑regulated users must also pay a fee ranging between DOP 327 000 and DOP 381 000.
← 7. In August 2025, the Dominican Republic proceeded to launch this public tender for 600 MW of solar photovoltaic and wind generation, including energy storage systems (SIE, 2025[186]). However, the following month, in September 2025, the Dominican Republic modified the rules for the tender following feedback from stakeholders: the revised rules eased the requirement that only generation projects that already possessed a definitive concession could participate in the tender and expanded the pool of eligible generation projects to include those that could secure a definitive concession by the tender registration deadline (SIE, 2025[185]; BN Americas, 2025[187]).