The CONFOTUR Law, or Law 158-01 on the Promotion of Tourism Development in the Dominican Republic, is a legal framework designed to attract and promote investment in the country’s tourism sector.
As you may have seen from the property listings, especially the new projects sold off-plan, most of them benefit from the CONFOTUR Law.
Here’s a detailed explanation of its main aspects:
Aim of the law
The CONFOTUR Law aims to stimulate tourism development by offering significant tax incentives to investors in new tourism projects, including hotels, resorts and other tourism-related infrastructure.
Benefits for investors
- Exemption from property transfer tax: Normally set at 3% of the value of the property upon transfer of ownership, this tax is waived for projects that benefit from CONFOTUR.
- Exemption from property tax (IPI): This tax is normally set at 1% per annum on the value of properties above a certain threshold (approximately US$148,000, depending on the exchange rate). CONFOTUR properties are exempt from this tax.
- Import Tax Exemption: All equipment, materials and goods required for the construction and initial equipping of tourist facilities are exempt from import and similar taxes.
- Income tax exemption: Although not directly mentioned in the details provided, posts on X mention similar benefits, such as exemption from income tax on rental income for a certain period.
- Duration of benefits: Tax exemptions can last up to 15 years from the completion of construction or installation of equipment.
Criteria and application
- Targeted areas: The law targets not only established tourist areas such as Punta Cana, but also less developed areas with tourism potential, in order to promote a more balanced development.
- Application process: Investors must submit their projects to the Conseil de Fomento Turístico (CONFOTUR) in order to benefit from these incentives. This involves an application process in which projects are assessed for compliance with the criteria set out in the law.
Economic and social impact
- Economic growth: The law has contributed to significant growth in the tourism sector, which is one of the driving forces of the Dominican economy, increasing employment, infrastructure and foreign direct investment.
- Local development: By promoting development in underserved areas, CONFOTUR helps to spread the benefits of tourism more widely, potentially reducing regional disparities.
Disputes and discussions
– Discussions on X and other forums show that some are concerned that the reduction or modification of these incentives could reduce the Dominican Republic’s attractiveness to foreign investors, thus affecting the country’s tourism competitiveness in relation to other Caribbean destinations.
In other words, nothing lasts forever, so take advantage now.
In conclusion, the CONFOTUR Law is an important tool for promoting investment in tourism in the Dominican Republic, offering attractive tax benefits to stimulate the development and competitiveness of the sector.
However, like all legislation, it is subject to debate as to its effectiveness, scope and long-term impact on the national economy.
Sylvain Maufrais, AGIREDOM
Versión Español – Version Française
Read more
Follow me on : LinkedIn