HomeReportsBureau of Economic and Business Affairs2019 Investment Climate Statements...Dominica

# 					2019 Investment Climate Statements: Dominica			

 In this section										/

													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime   
                -  4. Industrial Policies   
                -  5. Protection of Property Rights   
                -  6. Financial Sector   
                -  7. State-Owned Enterprises   
                -  8. Responsible Business Conduct   
                -  9. Corruption   
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. OPIC and Other Investment Insurance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

The Commonwealth of Dominica (Dominica) is a member of the Organization of Eastern Caribbean States (OECS) and the Eastern Caribbean Currency Union (ECCU).  Dominica had an estimated gross domestic product (GDP) of USD 411.7 million in 2018, with forecast growth of 2.02 percent for 2019, according to Eastern Caribbean Central Bank (ECCB).  Dominica continues to recover from the devastation caused by the passage of Hurricane Maria in 2017. It is estimated that the losses from Hurricane Maria amounted to USD 1.37 billion or 226 per cent of GDP.  The government continues to be focused on reconstruction efforts, with support from the international community. The government is seeking to stimulate sustainable and climate-resilient economic growth through a revised macroeconomic framework that includes strengthening the nation’s fiscal framework.  The government remains committed to creating a vibrant business climate to attract more foreign investment.

In the World Bank’s 2019 Doing Business Report, Dominica ranks 103rd out of 190 countries.  The report noted minimal changes from the 2018 report, but some improvement in the ease of starting a business and resolving insolvency.

Dominica remains an emerging market in the Eastern Caribbean, with investment opportunities mainly within the services sector, particularly eco-tourism, information and communication technologies, and education.  Other opportunities exist in alternative energy, including geothermal energy, and capital works due to reconstruction and new tourism projects.

Recently, the government instituted a number of investment incentives for businesses that would consider being based in Dominica, encouraging both domestic and foreign private investment. Foreign investors in Dominica can repatriate all profits and dividends and can import capital.

Dominica bases its legal system on British common law.  Dominica does not have a bilateral investment treaty with the United States but has bilateral investment treaties with the UK and Germany.

In June 2018, the government of Dominica signed an Intergovernmental Agreement to implement the United States’ Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in Dominica to report the banking information of U.S. citizens.

*Table 1: Key Metrics and Rankings*

							1. Openness To, and Restrictions Upon, Foreign Investment					

**Policies Towards Foreign Direct Investment**

The government of Dominica strongly encourages foreign direct investment (FDI), particularly in industries that create jobs, earn foreign currency, and have a positive impact on local citizens.

Through the Invest Dominica Authority (IDA), the government instituted a number of investment incentives for businesses considering the possibility of locating in Dominica.  Government policies provide liberal tax holidays, duty-free import of equipment and materials, exemption from value added tax on some capital investments, and withholding tax exemptions on dividends, interest payments, and some external payments and income.

The government has prioritized investment in certain sectors, such as hotel accommodation, including eco-lodges and boutique hotels, nature and adventure tourism services, marina and yachting sector development, fine dining restaurants, information and technology services, particularly business processing operations.  Other sectors include film, music, and video production, agro-processing, manufacturing, bulk water export and bottled water operations, medical and nursing schools, health and wellness tourism, geothermal and biomass industries, biodiversity, aquaculture, and English language training services. The government has signaled that it is also willing to consider additional sectors.

**Limits on Foreign Control and Right to Private Ownership and Establishment**

There are no limits on foreign control in Dominica.  Foreign investment in Dominica is not subject to any restrictions, and foreign investors are entitled to receive the same treatment as nationals of Dominica.  Foreign investors are entitled to hold up to 100 percent of their investment. The only restriction is the requirement to obtain an Alien Landholders License for foreign investors seeking to purchase property for residential or commercial purposes.  Local enterprises generally welcome joint ventures with foreign investors in order to access technology, expertise, markets, and capital.

**Other Investment Policy Reviews**

The OECS, of which Dominica is a member, has not conducted a trade policy review in the last three years.

**Business Facilitation**

The IDA is Dominica’s main business facilitation unit.  It facilitates FDI into priority sectors and advises the government on the formation and implementation of policies and programs to attract investment in Dominica.  The IDA provides business support services and market intelligence to all investors. It offers an online tool useful for navigating laws, rules, procedures, and registration requirements for foreign investors.  It is available at http://www.investdominica.com/  .

All potential investors applying for government incentives must submit their proposals for review by the IDA to ensure the project is consistent with the national interest and provides economic benefits to the country.

The Companies and Intellectual Property Office (CIPO) maintains an e-filing portal for most of its services, including company registration on its website.  However, this only allows for the preliminary processing of applications prior to the investor physically making a payment at the Supreme Court office. Investors are advised to seek the advice of a local attorney prior to starting the process.  Further information is available at: http://www.cipo.gov.dm/   .

According to the World Bank’s Doing Business Report for 2019, Dominica ranks 69th out of 190 countries in the ease of starting a business.  It takes five procedures and about 12 days to complete the process. The general practice is to retain an attorney who prepares all the relevant incorporation documents.  A business must register with the CIPO, the Tax Authority, and the Social Services Institute.

The government of Dominica continues to support the growth of women–led businesses.  The government supports equitable treatment and support of women in the private sector through non-discriminatory processes for business registration, fiscal incentives, investment opportunities, and quality assessments.

**Outward Investment**

There is no restriction on domestic investors seeking to do business abroad.  Local companies in Dominica are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the OECS Economic Union and the Caribbean Community Single Market and Economy (CSME), which enhance the competitiveness of the local and regional private sectors across traditional and emerging high-potential markets.

							2. Bilateral Investment Agreements and Taxation Treaties					

Dominica has not signed a bilateral investment treaty with the United States.  Dominica has bilateral investment treaties with the UK and Germany. Dominica has bilateral tax treaties with the United States and the UK.  Dominica is also party to the following agreements:

*Caribbean Community (CARICOM)*

The Treaty of Chaguaramas established CARICOM in 1973 to promote economic integration among its fifteen member states.  Investors operating in Dominica have preferential access to the entire CARICOM market. The Revised Treaty of Chaguaramas established the CSME, which permits the free movement of goods, capital, and labor within CARICOM member states.

*Organization of Eastern Caribbean States*

The Revised Treaty of Basseterre established the OECS.  The OECS consists of seven full members: Antigua and Barbuda, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines, and four associate members: Anguilla, Martinique, Guadeloupe and the British Virgin Islands.  The OECS aims to promote harmonization among member states concerning foreign policy, defense and security, and economic affairs. The seven independent countries of the OECS ratified the Revised Treaty of Basseterre, establishing the OECS Economic Union in 2011.  The Economic Union established a single financial and economic space within which all factors of production, including goods, services, and people, move without hindrance.

*Economic Partnership Agreement*

The European Community and the CARIFORUM states signed an Economic Partnership Agreement (EPA) in 2008.  The overarching objectives of the EPA are to alleviate poverty in CARIFORUM states, to promote regional integration and economic cooperation, and to foster the gradual integration of the CARIFORUM states into the world economy by improving their trade capacity and creating an investment-conducive environment.  The EPA promotes trade-related developments in areas such as competition, intellectual property, public procurement, the environment, and protection of personal data.

*Caribbean Basin Initiative*

The objective of the Caribbean Basin Initiative (CBI) is to promote economic development through private sector initiatives in Central America and the Caribbean islands by expanding foreign and domestic investment in non-traditional sectors, diversifying CBI country economies, and expanding exports.  It permits duty-free entry of products manufactured or assembled in Dominica into the United States.

*Caribbean/Canada Trade Agreement*

The Caribbean/Canada Trade Agreement (CARIBCAN) is an economic and trade development assistance program for Commonwealth Caribbean countries in which Canada provides duty-free access to its national market for the majority of products originating in Commonwealth Caribbean countries.

							3. Legal Regime					

**Transparency of the Regulatory System**

The government of Dominica provides a legal framework to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety.  The Ministry of Finance and the IDA provide oversight of the transparency of the system as it relates to investment.

Rule-making and regulatory authority lies with the unicameral parliament.  The parliament has 21 members elected for a five-year term in single-seat constituencies, nine appointed members, one Speaker, and one clerk.

Relevant ministries develop laws which are drafted by the Ministry of Justice, Immigration and National Security.  FDI is governed principally through the laws that oversee the IDA and the citizenship by investment (CBI) program. Laws are available online at http://www.dominica.gov.dm/laws-of-dominica  .

Although some draft bills are not subject to public consultation, the government generally solicits input from various stakeholder groups in the formulation of laws.  In some instances, the government convenes a special committee is convened to make recommendations on provisions outlined in the law. The government uses public awareness campaigns to sensitize the general population on legislative reforms.  Copies of proposed regulations are published in the official gazette just before the bills are taken to parliament.  Although Dominica does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice.  The government maintains a website and an information service on which it posts information such as directories of officials and a summary of laws and press releases.  The government budget and an audit of that budget are available on the website: http://www.opm.gov.dm  .

Accounting, legal, and regulatory procedures are generally transparent and consistent with international norms.  The International Financial Accounting Standards, which stem from the General Accepted Accounting Principles, govern the accounting profession in Dominica.

The Office of the Parliamentary Commissioner or Ombudsman guards against excesses by government officers in the performance of their duties.  The Ombudsman is responsible for investigating any complaint relating to any decision or act of any government officer or body in any case in which a member of the public claims to be aggrieved or appears to the Ombudsman to be the victim of injustice as a result of the exercise of the administrative function of that officer or body.

Dominica’s membership in regional organizations, particularly the OECS and its Economic Union, commits its members to implement all appropriate measures to ensure the fulfillment of its various treaty obligations.  For example, the Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the ECCU, although there are some minor differences in implementation from country to country.

The enforcement mechanisms of these regulations include penalties or legal sanctions.  The IDA can revoke an issued Investment Certificate if the holder fails to comply with certain stipulations detailed in the Act and its regulations.

**International Regulatory Considerations**

As a member of the OECS and the ECCU, Dominica subscribes to a set of principles and policies outlined in the Revised Treaty of Basseterre.  The relationship between national and regional systems is such that each participating member state is expected to coordinate and adopt, where possible, common national policies aimed at the progressive harmonization of relevant policies and systems across the region.  Thus, Dominica is obligated to implement regionally developed regulations, such as legislation passed under OECS authority, unless specific concessions are sought.

The Dominica Bureau of Standards develops, establishes, maintains, and promotes standards for improving industrial development, industrial efficiency, promoting the health and safety of consumers, protecting the environment, food and food products, and the facilitation of trade.  It also conducts national training and consultations in international standards practices. As a signatory to the World Trade Organization (WTO) Agreement on the Technical Barriers to Trade, Dominica, through the Dominica Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

Dominica ratified the WTO Trade Facilitation Agreement (TFA) in 2016.  Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade.  The TFA aims to improve the speed and efficiency of border procedures, facilitate trade costs reduction, and enhance participation in the global value chain.  Dominica has already implemented a number of TFA requirements. A full list is available at: https://www.tfadatabase.org/members/dominica/measure-breakdown   .

The Advanced Cargo Information System is a CARICOM project that seeks to improve the capability to track cargo efficiently.  Dominica is one of three regional pilot countries that have already enacted the enabling legislation. Dominica has fully implemented the Automated System for Customs Data.

**Legal System and Judicial Independence**

Dominica bases its legal system on British common law.  The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice in the country.  The Eastern Caribbean Supreme Court Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal.  The High Court hears criminal and civil matters and makes determinations on the interpretation of the Constitution. Parties may appeal to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all OECS members.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas.  In 2015, Dominica acceded to the CCJ, making the CCJ its final court of appeal.

The United States and Dominica are both parties to the WTO.  The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.

**Laws and Regulations on Foreign Direct Investment**

The main laws concerning investment in Dominica are the Invest Dominica Authority Act (2007), the Tourism Act (2005), and the Fiscal Incentives Act.  Regulatory amendments have been made to the Income Tax Act, the Value Added Tax Act, the Title by Registration Act, the Stamp Act, the Aliens Landholding Regulation Act, and the Residential Levy Act.

IDA reviews all proposals for investment concessions and incentives to ensure the project is consistent with the national interest and provides economic benefits to the country.  The Cabinet of Dominica makes the final decision on investment proposals.

The IDA provides “one-stop shop” facilitation services to investors to guide them through various stages of the investment process.  The IDA offers a website that is useful for navigating the laws, rules, procedures, and registration requirements for foreign investors: http://www.investdominica.com  .

Under Dominica’s Citizenship By Investment program, qualified foreign investors may obtain citizenship without voting rights.  Applicants can contribute a minimum of USD USD 100,000 to the Economic Diversification Fund for a single person or invest in designated real estate with a value of at least USD USD 200,000.  Applicants must also provide a full medical certificate, undergo a background check, and provide evidence of the source of funds before proceeding to the final stage of an interview. The government introduced a Citizen by Investment Certificate in order to minimize the risk of unlawful duplication.  Further information is available at: http://cbiu.gov.dm  .

**Competition and Anti-Trust Laws**

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to CARICOM States.  Member states are required to establish and maintain a national competition authority for implementing the rules of competition.  CARICOM established a Caribbean Competition Commission to apply rules of competition regarding anti-competitive cross-border business conduct.  CARICOM competition policy addresses anti-competitive business conduct such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM.  Dominica does not have domestic legislation to regulate competition. The OECS agreed to establish a regional competition body to handle competition matters within its single market. The draft OECS bill is with the Ministry of Justice, Immigration and Security for review.

**Expropriation and Compensation**

There are no known pending expropriation cases involving American citizens.  In such an event, Dominica would employ a system of eminent domain to pay compensation when property must be acquired in the public interest.  There were no reported tendencies of the government to discriminate against U.S. investments, companies, or landholdings. There are no laws mandating local ownership in specified sectors.

**Dispute Settlement**

*ICSID Convention and New York Convention*

Dominica is not a party to the Convention on the Settlement of Investment Disputes.  However, it is a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Arbitration Convention.  The Arbitration Act of 1988 is the main legislation that governs arbitration in Dominica. It adheres to the New York Arbitration Convention.

*Investor-State Dispute Settlement*

Investors are permitted to use national or international arbitration for contracts entered into with the state.  Dominica does not have a Bilateral Investment Treaty or a Free Trade Agreement with an investment chapter with the United States.

The country ranks 83rd out of 190 countries in resolving contract disputes in the 2019 World Bank Doing Business Report.  Dispute resolution in Dominica takes an average of 681 days. The slow court system and bureaucracy are widely seen as the main hindrances to timely resolution of commercial disputes.  Through the Arbitration Act of 1988, the local courts recognize and enforce foreign arbitral awards issued against the government. Dominica does not have a recent history of investment disputes involving a U.S. person or other foreign investors.

*International Commercial Arbitration and Foreign Courts*

The Eastern Caribbean Supreme Court is the domestic arbitration body.  Local courts recognize and enforce foreign arbitral awards. The Eastern Caribbean Supreme Court’s Court of Appeal also provides mediation.

**Bankruptcy Regulations**

Under the Bankruptcy Act (1990), Dominica has a bankruptcy framework that grants certain rights to debtor and creditor.  The 2019 Doing Business Report ranks Dominica 134 out of 190 countries in resolving insolvency.

							4. Industrial Policies					

**Investment Incentives**

The government of Dominica implemented a series of investment incentives codified in the Fiscal Incentives Act.  These include tax holidays for up to 20 years for approved hotel and resort development projects, duty-free concessions on the purchase of machinery and equipment, and various tax exemptions.  While there is no requirement for enterprises to purchase a fixed percentage of goods from local sources, the government encourages local sourcing. There are no requirements for participation by nationals or the government in foreign investment projects.

Under the Fiscal Incentives Act, four types of enterprise qualify for tax holidays.  The length of the tax holiday for the first three depends on the amount of value added in Dominica.  The fourth type, known as an enclave industry, must produce goods exclusively for export outside the CARICOM region.

 

Companies that qualify for tax holidays are allowed to import into Dominica duty-free all equipment, machinery, spare parts, and raw materials used in production.

The Hotels Aid Act provides relief from customs duties on items brought into the country for use in construction, extension, and equipping of a hotel of not less than five bedrooms.  In addition, the Income Tax Act provides special tax relief benefits for approved hotels and villa development. A tax holiday for up to 20 years is available for approved hotel and resort developments and up to 10 years for income accrued from the rental of villas in approved villa developments.  The Cabinet must approve these developments.

The standard corporate income tax rate is 25 percent.  There is no capital gains tax. International businesses are exempt from tax.  Corporate tax does not apply to exempt companies or to enterprises that have been granted tax concession.

Dominica provides companies with a further tax concession effective at the end of the tax holiday period.  In effect, it is a rebate of a portion of the income tax paid based on export profits as a percentage of total profits.  Full exemption from import duties on parts, raw materials, and production machinery is also available.

**Foreign Trade Zones/Free Ports/Trade Facilitation**

There are no foreign trade zones or free ports in Dominica.

**Performance and Data Localization Requirements**

Dominica does not mandate local employment.  The provisions of the Labor Code outline the requirements for acquiring a work permit and prohibit anyone who is not a citizen of Dominica or the OECS to engage in employment unless they have obtained a work permit.  When the government grants work permits to senior managers because no qualified nationals are available for the post, the government may recommend a counterparty trainee who is a Dominican citizen. There are no excessively onerous visa, residency, or work permit requirements.

As a member of the WTO, Dominica is party to the Agreement to the Trade Related Investment Measures.  While there are no formal performance requirements, the government encourages investments that will create jobs, increase exports and foreign exchange earnings.  There are no requirements for participation by nationals or by the government in foreign investment projects. There is no requirement that enterprises must purchase a fixed percentage of goods or technology from local sources, but the government encourages local sourcing.  Foreign investors receive national treatment. There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance (backdoors into hardware and software, turn over keys for encryption, etc.).

							5. Protection of Property Rights					

**Real Property**

Civil law protects physical property and mortgage claims.  There are some special license requirements for the acquisition of land, development of buildings, and expansion of existing construction, and special standards for various aspects of the tourism industry.  Individuals or corporate bodies who are not citizens and who are seeking to acquire land require an Alien Landholders License prior to the execution of transactions, depending upon the amount of land in question.  A foreign national may hold less than one acre of land for residential purposes or less than three acres for commercial purposes without obtaining an alien landholding license. If more land is required then a license must be obtained, and the applicant must pay a fee of XCD USD 6,000 (USD2,239) the Office of the Accountant-General.  Applicants must meet all the submission requirements before Cabinet can consider granting the license. Failure to apply for the license will result in a penalty of XCD USD 20,000 (USD 7,408). Upon acquiring land under Section 5 for an approved development, foreign investors must apply for development permission under the Physical Planning Act (2002) within six months of acquiring the land and must start construction of the approved development within one year of receipt of development permission.  Dominica is ranked 168th of 190 countries for ease of registering property in the World Bank Doing Business Report 2019.  It takes about 42 days to complete the five necessary procedures and the cost is about 13.3 percent of the property value.  The report describes the procedure for purchasing and registering property in Dominica.

**Intellectual Property Rights**

Dominica has a legislative framework supporting its commitment to the protection of intellectual property rights (IPR).  While the legal structures governing IPR are generally adequate, enforcement could be strengthened. The Attorney General is responsible for the administration of IPR laws.  The Companies & Intellectual Properties Office (CIPO) registers patents, trademarks, and service marks.

Dominica is signatory to the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, and the Berne Convention for the Protection of Literary and Artistic Works.  It is also a member of the UN World Intellectual Property Organization (WIPO).

Article 66 of the Revised Treaty of Chaguaramas (2001) establishing the Caribbean Single Market and Economy (CSME) commits all 15 members to implement IPR protection and enforcement.  The CARIFORUM-EU Economic Partnership Agreement (EPA) contains the most detailed obligations regarding IPR in any trade agreement to which Dominica is a party. The EPA recognizes the protection and enforcement of IPR.  Article 139 of the EPA requires parties to “ensure an adequate and effective implementation of the international treaties dealing with intellectual property to which they are parties, and of the [World Trade Organization (WTO)] Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).”

The Comptroller of Customs of Dominica spearheads the enforcement of IPR, which includes the detention, seizure, and forfeiture of goods.  The Customs and Excise Department investigates customs offences and administers fines and penalties.

Dominica is not included in the United States Trade Representative (USTR) Special 301 Report or Notorious Markets List.

For additional information about treaty obligations and points of contact at local intellectual property offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/  .

							6. Financial Sector					

**Capital Markets and Portfolio Investment**

Dominica is a member of the ECCU.  As such, it is a member of the Eastern Caribbean Securities Exchange (ECSE) and the Regional Government Securities Market.  The ECSE is a regional securities market established by the ECCB and licensed under the Securities Act of 2001, a uniform regional body of legislation governing the buying and selling of financial products for the eight member territories.  In 2018, the ECSE listed 135 securities, comprising 112 sovereign debt instruments, 14 equities, and nine corporate bonds. Market capitalization stood at USD 3.07 billion. Dominica is open to portfolio investment.

Dominica has accepted the obligations of Article VIII of the International Monetary Fund (IMF) Agreement, Sections 2, 3, and 4 and maintains an exchange system free of restrictions on making payments and transfers for current international transactions.  Dominica does not normally grant foreign tax credits except in the case of taxes paid in a British Commonwealth country that grants similar relief for Dominica taxes or where an applicable tax treaty provides a credit. The private sector has access to credit on the local market through loans, purchases of non-equity securities, and trade credits and other accounts receivable that establish a claim for repayment.

**Money and Banking System**

The eight participating governments of the ECCU have passed the Eastern Caribbean Central Bank Agreement Act.  The Act provides for the establishment of the ECCB, its management and administration, its currency, relations with financial institutions, relations with the participating governments, foreign exchange operations, external reserves, and other related matters.  Dominica is a signatory to this agreement and the ECCB controls Dominica’s currency and regulates its domestic banks.

The Banking Act is a harmonized piece of legislation across the ECCU.  The Minister of Finance usually acts in consultation with, and on the recommendation of, the ECCB with respect to those areas of responsibility within the Minister of Finance’s portfolio.

Domestic and foreign banks can establish operations in Dominica.  The Banking Act requires all commercial banks and other institutions to be licensed in order to conduct any banking business.  The ECCB regulates financial institutions. As part of ongoing supervision, licensed financial institutions are required to submit monthly, quarterly, and annual performance reports to the ECCB.  In its latest annual report, the ECCB listed the commercial banking sector in Dominica as stable. Assets of commercial banks totaled USD 876.4 million in 2018 and remained relatively consistent during the previous year.  The reserve requirement for commercial banks was six percent of deposit liabilities.

Dominica is well served by bank and non-bank financial institutions.  There are minimal alternative financial services. Some citizens still participate in informal community group lending.

The Caribbean region has witnessed a withdrawal of correspondent banking services by U.S. and European banks.  CARICOM remains committed to engaging with key stakeholders on the issue and appointed a Committee of Ministers of Finance on Correspondent Banking to monitor the issue.

In March 2019, the ECCB launched an 18-month financial technology pilot to launch a Digital Eastern Caribbean dollar (DXCD) with its partner, Barbados-based Bitt Inc.  The ECCB will work closely with Bitt to develop, deploy, and test technology focusing on data management, compliance, and transaction monitoring systems for know your customer, anti-money laundering, and combating the financing of terrorism.  The goal of the pilot is to improve the risk profile of the ECCU and mitigate against the trend of de-risking by the region’s correspondent banking partners. The pilot will also focus on developing a secure, resilient digital payment and settlement platform with embedded regional and global compliance.  The digital Eastern Caribbean currency will operate alongside physical Eastern Caribbean currency. The ECCB will issue the DXCD to licensed bank and non-bank financial institutions on a private blockchain platform.

**Foreign Exchange and Remittances**

*Foreign Exchange*

Dominica is a member of the ECCU and the ECCB. The currency of exchange is the Eastern Caribbean dollar (denoted as XCD).  As a member of the OECS, Dominica has a fully liberalized foreign exchange system. The XCD has been pegged to the United States dollar at a rate of XCD 2.70 to USD 1.00 since 1976.  As a result, the XCD does not fluctuate, creating a stable currency environment for trade and investment in Dominica.

*Remittance Policies*

Companies registered in Dominica have the right to repatriate all capital, royalties, dividends, and profits free of all taxes or any other charges on foreign exchange transactions.  There are no restrictions on the repatriation of dividends for totally foreign-owned firms. However, a mixed foreign-domestic company may repatriate profits to the extent of its foreign participation.

As a member of the OECS, there are no exchange controls in Dominica and the invoicing of foreign trade transactions are allowed in any currency.  Importers are not required to make prior deposits in local funds and export proceeds do not have to be surrendered to government authorities or to authorized banks.  There are no controls on transfers of funds. Dominica is a member of the Caribbean Financial Action Task Force (CFATF).

In June 2018, the government of Dominica formally signed an Intergovernmental Agreement in observance of FATCA, making it mandatory for banks in Dominica to report the banking information of U.S. citizens.

**Sovereign Wealth Funds**

Neither the government of Dominica, nor the ECCB, of which Dominica is a member, maintains a sovereign wealth fund.

							7. State-Owned Enterprises					

State-owned enterprises (SOEs) in Dominica work in partnership with ministries, or under their remit to carry out certain specific ministerial responsibilities.  There are currently 20 SOEs in Dominica operating in areas such as tourism, investment services, broadcasting and media, solid waste management, and agriculture. They are all wholly-owned government entities.  Each is headed by a board of directors which senior management reports.

**Privatization Program**

Dominica does not currently have a targeted privatization program.

							8. Responsible Business Conduct					

The private sector is involved in projects that benefit society, including in support of environmental, social, and cultural causes.  Individuals benefit from business-sponsored initiatives when local and foreign owned enterprises pursue volunteer opportunities and make monetary or in-kind donations to local causes.

The non-governmental organization (NGO) community, while comparatively small, is involved in fundraising and volunteerism in gender, health, environmental, and community projects.  The government at times partners with NGOs in activities. The government encourages philanthropy, but does not have regulations in place to mandate such activities by private companies.

							9. Corruption					

The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively.  According to civil society sources and members of the political opposition, officials sometimes engaged in corrupt practices with impunity.  Dominica acceded to the United Nations Convention against Corruption in 2010. The country is party to the Inter-American Convention against Corruption.

The Integrity in Public Office Act, 2003 and the Integrity in Public Office (Amendment) Act 2015 require government officials to account annually for their income, assets, and gifts.  All offenses under the act, including the late filing of declarations, are criminalized. The Integrity Commission was established and functions under this Act. The Integrity Commission’s mandate and decisions can be found at: http://www.integritycommission.gov.dm/  .

The Director of Public Prosecutions is responsible for prosecuting corruption offenses, but it lacks adequate personnel and resources to handle complicated money laundering and public corruption cases.

*Resources to Report Corruption*

Dermot SouthwellChairman, Integrity CommissionCross Street, Roseau, DominicaTel: 1-767-266-3436Email: integritycommission@dominica.gov.dm

							10. Political and Security Environment					

Dominica held parliamentary elections in December 2014.  The next general elections is constitutionally due by December 2019.  There were no reports of political violence.

							11. Labor Policies and Practices					

The government last raised Dominica’s minimum wage in June 2008.  It varies according to the category of worker, with the lowest minimum wage set at about USD USD 1.50 an hour and the maximum set at around USD USD 2.06 an hour.  The standard workweek is 40 hours for five or six days of work. The law provides overtime pay for work in excess of the standard workweek. Dominica has a labor force of about 32,630, with a literacy rate of 95 percent.

The local state college largely meets the country’s technical and training needs.  There is also a small pool of professionals to draw from in fields such as law, medicine, engineering, business, information technology, and accounting.  Many of the professionals in Dominica trained in the United States, Canada, the UK, or the wider Caribbean, where many of them gained work experience before returning to the country.

The labor legislation in Dominica is applicable to all employees and employers.  There are no waivers or exceptions regarding the application of labor laws and standards in Dominica.

Employers usually advertise job vacancies in local newspapers. The government recommends that the advertisement should be placed on three separate occasions to ensure transparency and equal opportunity for Dominican residents to apply.  The government does not interfere with the employer’s right to make hiring determinations.

The Labor Contracts Act stipulates that employees shall receive a contract within 14 days of engagement from his/her employer, which outlines the terms and conditions of employment.

 The labor laws clearly regulate and define layoffs and the conditions under which layoffs can occur.  Severance by redundancy is also regulated by law. People employed for three years or more qualify for severance pay.  Social Security benefits are payable only when the employee reaches retirement age.

The Industrial Relations Act provides for and regulates trade unions in both public and private sectors.  Dominican law provides for the right of workers to form and join independent unions, the right to strike, and the right of workers to bargain collectively with employers.  The government generally enforced laws governing worker rights effectively. The law prohibits anti-union discrimination by providing that employers must reinstate workers who file a successful complaint of illegal dismissal, which can cover being fired for engaging in union activities or other grounds of wrongful dismissal.

Collective bargaining is permitted in all firms (both public and private) where the employees are unionized.  A copy of the collective bargaining agreement must be filed at the Ministry of Labor. There are no sectoral collective agreements.  All unionized firms are obliged by law to negotiate terms and conditions of employment of all workers, whether or not they are members of a trade union.  Dominica ratified all of the International Labor Organization (ILO)’s eight core conventions on human rights and labor administration.

The government deemed emergency, port, electricity, telecommunications, and prison services employees, as well as the banana, coconut, and citrus fruit cultivation workers “essential,” deterring workers in these sectors from going on strike.  Nonetheless, in practice essential workers conducted strikes and did not suffer reprisals. The procedure for essential workers to strike is cumbersome, involving appropriate notice and submitting the grievance to the labor commissioner for possible mediation.  These actions are usually resolved through mediation by the Office of the Labor Commissioner, with the rest referred to the Industrial Relations Tribunal for binding arbitration.

The Industrial Relations Act also mandates the establishment of the Industrial Relations Board and the Industrial Relations Tribunals as dispute resolution mechanisms.  The Division of Labor acts as the first arbitrator with matters of investigation, mediation and conciliation. Matters are referred only to the tribunals by the Minister when conciliation fails or by request of any of the disputing parties.

Enforcement is the responsibility of the Labor Commissioner within the Ministry of Justice, Immigration and National Security.  Labor laws provide that the labor commissioner may authorize the employment of a person with disabilities at a wage lower than the minimum rate to enable that person to work.  The Employment Safety Act provides occupational health and safety regulations that are consistent with international standards. Workers have the right to remove themselves from unsafe work environments without jeopardizing their employment, and the authorities effectively enforced this right in practice.

							12. OPIC and Other Investment Insurance Programs					

The Overseas Private Investment Corporation (OPIC) provides financing and political risk insurance to viable private sector projects, helps U.S. businesses invest overseas, and fosters economic development in new and emerging markets.  Dominica is a qualifying country for OPIC projects. There are currently no active OPIC projects in Dominica.

							13. Foreign Direct Investment and Foreign Portfolio Investment Statistics					

*Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy*

* Source for Host Country Data:Eastern Caribbean Central Bankhttps://www.eccb-centralbank.org/statistics/dashboard-datas/   . All ECCB GDP figures for 2018 are currently estimates.

*Table 3: Sources and Destination of FDI*

Data not available; Dominica does not appear in the IMF’s Coordinated Direct Investment Survey (CDIS).

*Table 4: Sources of Portfolio Investment*

Data not available; Dominica does not appear the IMF Coordinated Portfolio Investment Survey (CPIS).

							14. Contact for More Information					

Political/Economic SectionU.S. Embassy to Barbados, the Eastern Caribbean and the Organization of Eastern Caribbean States246-227-4000Email: BridgetownPolEcon@state.gov

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### On This Page

                    -  Executive Summary 
                    -  1. Openness To, and Restrictions Upon, Foreign Investment   
                    -  2. Bilateral Investment Agreements and Taxation Treaties   
                    -  3. Legal Regime   
                    -  4. Industrial Policies   
                    -  5. Protection of Property Rights   
                    -  6. Financial Sector   
                    -  7. State-Owned Enterprises   
                    -  8. Responsible Business Conduct   
                    -  9. Corruption   
                    -  10. Political and Security Environment   
                    -  11. Labor Policies and Practices   
                    -  12. OPIC and Other Investment Insurance Programs   
                    -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                    -  14. Contact for More Information   

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