New Legislation

At the end of 2008 were enacted several laws relevant to business and foreign investment in the country. In this respect, it is especially important to mention the New Law of Commercial Companies and Individual Limited Liability Enterprises No. 479-08 dated December 11, 2008 that modernizes the Dominican legislation on commercial entities. Similarly, Law 480-08 Zones International Finance in the Dominican Republic was enacted, and published in the Official Gazette No. 10498 of 15 December 2008 establishing a special legal framework to promote the creation of companies that offer financial services to persons residing overseas. The Law on Commercial Arbitration No. 489-08, was also promulgated and published in the December 30 date of 2008 with the objective of expanding the legal framework for commercial arbitration in the country following the entry into force of the Free Trade Agreement between the United States, Central America and the Dominican Republic (DR-CAFTA).

Agreement of Economic Monitoring with the International Monetary Fund

Late last year, the intention of the Dominican Government and the International Monetary Fund (IMF) to sign an agreement of economic monitoring in 2009 was announced. In this regard, a Dominican government's economic team prepared and sent in January a letter containing a proposed economic plan for this year for the purpose of consideration by the IMF. This letter highlights the macroeconomic stability of the country enjoyed in 2008 and reiterated the government's commitment to maintain this stability, encourage reforms that promote sustained growth of the Dominican economy, increasing employment and reducing poverty. The Dominican proposal includes a more flexible monetary policy, strengthening banking supervision and taking steps to make public spending more efficient. After expressing its satisfaction with the framework of economic policies developed by the government's economic team for 2009, the proposal was approved by the IMF Board. The Monitoring Agreement is very different from a Stand-By Agreement which had been in force between the Dominican Republic and IMF, since it does not imply funding for the Dominican government, and is much more flexible in terms of control over the local economy.

New Projects in the Tourism Sector

The Secretary of State for Tourism announced that, in the coming months, new projects in the area will be initiated, totaling more than US$10,000 million. The Secretary of Tourism stated that these projects are initiated at this time because of the benefits that investment in the tourism sector represent, both in terms of profits and by the legal securities that the country offers to investors, through the Free Trade Agreement with the United States.

Central American Bank for Economic Integration

The Dominican Foreign Minister announced that the Dominican Republic has obtained a credit line of US$15 million, approved by the Central American Bank for Economic Integration (BCIE) to implement development projects in the energy sector, agriculture and infrastructure. This funding will go, according to the Foreign Minister, to projects in the area of renewable energy and promotion of agricultural production.

Report on the Financial System

According to a report submitted by the Banking Superintendent, the local financial system registered gains of RD$12,100 millions, representing a growth of RD$2,600 millions compared to 2007, and a return on their paid on the capital of 39%. For their part, the savings and loan associations registered gains of RD$1,200 millions, with a return of 8.3% with respect to their reserves. Although there was a slowdown in personal loans, the loan portfolio of the financial system grew at a rate of nominal growth of 17.2%. The biggest growth came as a result of the increase in loans to the productive sectors which registered a growth equivalent to 72% of the total increase that registered the whole loan portfolio. Public confidence in the overall banking system remained at high levels during 2008, which was reflected in an increase in deposits in financial institutions, which amounted to RD$468,100 millions, registering a growth rate of 10.8%.