HomeReportsBureau of Economic and Business Affairs2022 Investment Climate Statements…Dominica

# 					2022 Investment Climate Statements: Dominica			

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													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment                    -  Policies Towards Foreign Direct Investment 
                  -  Limits on Foreign Control and Right to Private Ownership and Establishment 
                  -  Other Investment Policy Reviews 
                  -  Business Facilitation 
                  -  Outward Investment 
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime                    -  Transparency of the Regulatory System 
                  -  International Regulatory Considerations 
                  -  Legal System and Judicial Independence 
                  -  Laws and Regulations on Foreign Direct Investment 
                  -  Competition and Anti-Trust Laws 
                  -  Expropriation and Compensation 
                  -  Dispute Settlement                      -  ICSID Convention and New York Convention 
                    -  Investor-State Dispute Settlement 
                    -  International Commercial Arbitration and Foreign Courts 
                  -  Bankruptcy Regulations 
                -  4. Industrial Policies                    -  Investment Incentives 
                  -  Foreign Trade Zones/Free Ports/Trade Facilitation 
                  -  Performance and Data Localization Requirements 
                -  5. Protection of Property Rights                    -  Real Property 
                  -  Intellectual Property Rights 
                -  6. Financial Sector                    -  Capital Markets and Portfolio Investment 
                  -  Money and Banking System 
                  -  Foreign Exchange and Remittances                      -  Foreign Exchange 
                    -  Remittance Policies 
                  -  Sovereign Wealth Funds 
                -  7. State-Owned Enterprises                    -  Privatization Program 
                -  8. Responsible Business Conduct                    -  Additional Resources 
                  -  Climate Issues 
                -  9. Corruption                    -  Resources to Report Corruption 
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. U.S. International Development Finance Corporation (DFC) 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).  The Government of Dominica strongly encourages foreign direct investment, particularly in industries that create jobs, earn foreign currency, and have a positive impact on its citizens.  Dominica remains vulnerable to external shocks such as climate change impacts, natural hazards, and global economic downturns.  According to Eastern Caribbean Central Bank (ECCB) figures, the economy of Dominica had an estimated GDP of $409.9 million USD (1,107.78 billion Eastern Caribbean dollars) in 2021, which signified a slight recovery from a 15.4 percent contraction in 2020 due to the ongoing COVID-19 pandemic and the resulting stagnation of the tourism sector.  The IMF forecasts real GDP growth of 7.9 percent in 2022 and expects GDP to reach pre-pandemic levels by 2023.

The economy also continues to recover from the devastation caused by Hurricane Maria in 2017.  Losses from Hurricane Maria were estimated at $1.37 billion or 226 percent of GDP.  Prior to the onset of the COVID-19 pandemic, the government was primarily focused on reconstruction efforts, with support from the international community.  During the COVID-19 pandemic, the Government of Dominica has received financial support from the International Monetary Fund (IMF) and the World Bank to provide fiscal assistance and macro-economic stability and support in health-related expenditures, loss of household income, food security, and the agricultural sector.

Through its economic policies, the government is seeking to stimulate sustainable and climate-resilient economic growth by implementing a revised macroeconomic framework that includes strengthening the nation’s fiscal framework.  The government states it is committed to creating a vibrant business climate to attract more foreign investment.

Dominica remains a small emerging market in the Eastern Caribbean, with investment opportunities mainly in the service sector, particularly in 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.

The government provides some investment incentives for businesses that are considering establishing operations in Dominica, encouraging both domestic and foreign private investment.  Foreign investors can repatriate all profits and dividends and can import capital. Dominica’s legal system is based on British common law.  It does not have a bilateral investment treaty with the United States, though it does have bilateral investment treaties with the UK and Germany.

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

							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 several investment incentives for businesses considering 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 IDA additionally provides support to approved citizenship by investment projects.

The IDA launched a new Investment Promotion Strategy in 2021.  The new strategy is focused on four sectors: agriculture and agri-business, renewable energy, tourism, and knowledge services such as business processing operations.  Other sectors include film, music, and video production, manufacturing, bulk water export and bottled water operations, medical and nursing schools, and English language training services.  The government continuously reviews these sectors. While these sectors are priorities, the government broadly welcomes FDI.

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

Local laws do not place limits on foreign control in Dominica.  Foreign investment in Dominica is not subject to 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.  However, there is a requirement for foreign investors seeking to purchase property for residential or commercial purposes to obtain an Alien Landholders License. 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 World Trade Organization (WTO) trade policy review since 2014. There have also not been any investment policy reviews by civil society organizations in the past five years.

### Business Facilitation

The IDA is Dominica’s main business facilitation unit.  It facilitates foreign direct investment 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.  Its website is **http://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**.

Businesses must register with CIPO, the Tax Authority, and the Social Services Institute. The general practice for registration is to retain an attorney who prepares all the relevant incorporation documents.

### Outward Investment

Local laws do not place any restrictions 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.  It benefits from the Caribbean Basin Economic Recovery Act (CBERA), which was implemented in January 1984. CBERA is intended to facilitate the development of stable Caribbean Basin economies by providing beneficiary countries with duty-free access to the U.S. market for most goods. Dominica has bilateral investment treaties with the UK and Germany.  Dominica has bilateral tax treaties with the United States and the UK.

Dominica is a member of the OECD Inclusive Framework on Base Erosion and Profit Sharing and is party to the Inclusive Framework’s October 2021 deal on the two-pillar solution to global tax challenges, including a global minimum corporate tax.

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 15 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 six 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.

**CARIFORUM- EU Economic Partnership Agreement**

The European Community and the Caribbean Forum (CARIFORUM) states signed an Economic Partnership Agreement (EPA) in 2008.  CARIFORUM consists of the independent Anglophone CARCOM member states, the Dominican Republic and Suriname. 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.

**CARIFORUM-UK Economic Partnership Agreement**

The UK and CARIFORUM signed an EPA in 2019, committing to trade continuity after Britain’s departure from the European Union.  The CARIFORUM-UK EPA eliminates tariffs on all goods imported from CARIFORUM states into the UK, while those Caribbean states will continue to gradually cut import tariffs on most of the region’s imports from the UK.

*Caribbean Basin Initiative*

The objective of the Caribbean Basin Initiative is to promote economic development through private sector initiatives in Central America and the Caribbean by expanding foreign and domestic investment in non-traditional sectors, diversifying 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.  Through CARIBCAN, Canada provides duty-free access to its national market for the majority of its 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 within 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 National Security and Home Affairs.  FDI is governed principally through the laws that oversee the IDA and the Citizenship by Investment 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 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 shortly 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 International Financial Accounting Standards, which stem from the General Accepted Accounting Principles, govern the accounting profession in Dominica. Accounting, legal, and regulatory procedures are generally transparent and consistent with international norms.

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 complaints related 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. The government does not promote nor require companies’ environmental, social, and governance disclosures.

Dominica’s membership in regional organizations, particularly the OECS and its Economic Union, commits it 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 IDA Act and its regulations. The regulatory enforcement process is not digitized.

### 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, maintains, and promotes standards for improving industrial development, industrial efficiency, promoting the health and safety of consumers, protecting the environment, and facilitating trade.  It also conducts national training and consultations in international standards practices.  As a signatory to the 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://tfadatabase.org/members/dominica/measure-breakdown**.

As a member of CARICOM, Dominica utilizes the Advanced Cargo Information System, a computer-based system developed by the United Nations Conference on Trade and Development (UNCTAD) to harmonize and standardize electronic cargo information in order to improve the capability to track cargo efficiently and to support regional and international trade. The Advance Cargo Information System forms a critical part of the World Customs Organization SAFE Framework of Standards. Dominica has also 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 Alien Landholding Regulation Act, and the Residential Levy Act. The IDA provides a full list of the relevant legislation on their website.

The 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 makes the final decision on investment proposals.

Under Dominica’s citizenship by investment program, qualified foreign investors may obtain citizenship without voting rights.  Applicants can contribute a minimum of $100,000 to the Economic Diversification Fund for a single person or invest in designated real estate with a value of at least $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.

### 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 with the state. Dominica does not have a bilateral investment treaty or a Free Trade Agreement with an investment chapter within the United States.

The court system and bureaucracy are widely seen as slow and as 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. A full copy of the act is available for download from the government’s website.

							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 types of enterprises depends on the amount of value added in Dominica.  The fourth type of enterprise, known as an enclave industry, must produce goods exclusively for export outside of 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 Hotel 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 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.

The government offers incentives for investors in the renewable energy sector, including the reduction or exemption of import duties and VAT on related inputs and a reduction in corporate tax.

The Government of Dominica does not have a practice of issuing guarantees or jointly financing foreign direct investment projects.

### 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 use of local equipment.  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 and 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.  There are no measures or draft measures that prevent or restrict companies from freely transmitting customer or other business-related data outside the country.

							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.

Local laws dictate that 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 $2,220 (6,000 Eastern Caribbean dollars) to 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 $7,400 (20,000 Eastern Caribbean dollars).  Upon acquiring land under Section 5 for an approved development, foreign investors must apply for development permission under the Physical Planning Act within six months of acquiring the land and must start construction of the approved development within one year of receipt of development permission. If property legally purchased is unoccupied for over twelve years, property ownership can revert to other owners, such as squatters.  This was affirmed by the CCJ in a 2019 ruling.

### Intellectual Property Rights

Dominica has a legislative framework that supports 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 CSME commits all 15 CARICOM members to implement IPR protection and enforcement.  The CARIFORUM-EU EPA contains the most detailed obligations regarding IPR in any trade agreement to which Dominica is party.  The CARIFORUM-EU EPA recognizes the protection and enforcement of IPR.  Article 139 of the CARIFORUM-EU 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 [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 offenses and administers fines and penalties.

Dominica is not included in the United States Trade Representative (USTR) 2021 Special 301 Report or the 2021 USTR Review of Notorious Markets for Counterfeiting and Piracy.

For additional information about national laws and points of contact at local IP 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 2021, the ECSE listed 164 securities, comprising 140 sovereign debt instruments, 13 equities, and 11 corporate debt securities.  Market capitalization stood at $1.9 billion. Dominica is open to portfolio investment.

Dominica has accepted the obligations of Article VIII of the 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, 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 $781.8 million (2.1 billion Eastern Caribbean dollars) at the end of 2019. Dominica is well served by bank and non-financial institutions.  There are minimal alternative financial services.

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 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.  An accompanying mobile application, DCash was officially launched in March 2021 in four pilot countries, adding Dominica to the pilot in December 2021. In January 2022, the platform experienced a system interruption, and its operation was suspended.  The platform regained full functionality at the end of March 2022 following system upgrades. The digital Eastern Caribbean currency operates alongside physical Eastern Caribbean currency.  Dominica does not have any specific legislation to regulate cryptocurrencies.

### 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 2.7 to $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

Local laws dictate that 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 is allowed in any currency.  Importers are not required to make prior deposits in local funds and export proceedings 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).

### 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.  The U.S. Embassy in Bridgetown is aware of 20 SOEs currently operating in areas such as tourism, investment services, broadcasting and media, solid waste management, and agriculture.  There is no published list of these SOEs.  They are all wholly owned government entities.  Each is headed by a board of directors to which senior management reports.  The SOE sector is affected by financial sustainability challenges, with resources insufficient to cover capital replacement.

### 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 support of environmental, social, and cultural causes.  The government encourages philanthropy but does not have regulations in place to mandate such activities by private companies.

### Additional Resources

Department of State

- Country Reports on Human Rights Practices ();
- Trafficking in Persons Report ();
- Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities () and;
- U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises ()
- Xinjiang Supply Chain Business Advisory ()

Department of the Treasury

- OFAC Recent Actions ().

Department of Labor

- Findings on the Worst forms of Child Labor Report ( ) and;
- List of Goods Produced by Child Labor or Forced Labor ().
- Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World (); and
- Comply Chain ().

### Climate Issues

Dominica’s climate policy is guided by its Climate Resiliency and Recovery Plan 2020-2030 and its Nationally Determined Contribution for reducing its greenhouse gas emissions. It does not have a specific strategy in place for monitoring natural capital. Following the devastation wrought by 2017’s Hurricane Maria, the government plans for Dominica to become fully climate resilient. Associated activities include a full transition to renewable energy, strengthening community disaster-response resources, and adaptation of homes and infrastructure to better survive severe weather events. Dominica has indicated that quickly achieving these goals will require substantial support from the international donor community. The government offers incentives for investors in the renewable energy sector, including the reduction or exemption of import duties and VAT on related inputs and a reduction in corporate tax. Public procurement policies do not include environmental and green growth considerations.

							9. Corruption					

The law provides criminal penalties for corruption by officials; however, government implementation and enforcement of the law is inconsistent.   Members of the political opposition and civil society representatives allege that officials sometimes engaged in corrupt practices with impunity. Local media and opposition leadership continued to raise allegations of corruption within the government, including in the Citizenship by Investment program.  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 to monitor the functions under this Act.  The Integrity Commission’s mandate and decisions can be found at **http://www.integritycommission.gov.dm**.  Generally, the Integrity Commission reports on late submissions and on inappropriately completed forms but does not share financial disclosures of officials with the Office of the Director of Public Prosecutions. The Integrity Commission has not updated documents on its website since 2016.

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

Steve HyacinthChairman, Integrity CommissionCross Street, Roseau, DominicaTel: 1-767-266-3436Email: **integritycommission@dominica.gov.dm**

							10. Political and Security Environment					

Dominica held parliamentary elections in December 2019.  Voting was held under heightened security following weeks of protests and legal challenges seeking electoral reform.  The protests were led by the United Workers’ Party, which lost the election in a landslide to the ruling Dominica Labour Party.

Dominica’s economy was severely affected by the COVID-19 crisis.  The IMF has projected that Dominica’s GDP will grow 7.9 percent in 2022.  In May 2020, the government unveiled a disaster resilience strategy that was based on three key pillars: structural resilience, financial resilience, and post-disaster resilience.  Both the IMF and the World Bank provided support to address the challenges posed by the COVID-19 pandemic.

							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 approximately $1.50 an hour and the maximum set at approximately $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 approximately 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 be placed on three separate occasions to ensure transparency and equal opportunity for Dominican residents to apply.  The Embassy is not aware of any instances of government interference with the employer’s right to make hiring determinations.

The Labor Contract Act stipulates that an employee shall receive a contract from his/her employer within 14 days of engagement outlining 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 enforces laws governing worker rights effectively, and penalties generally were sufficient to deter violations.  Administrative and judicial procedures are not generally subject to lengthy delays or appeals.  Government mediation and arbitration are free of charge.  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. Employers generally reinstated or paid compensation to employees who obtained favorable rulings by the ministry following a complaint of legal 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 banana, coconut, and citrus fruit cultivation workers “essential,” deterring workers in these sectors from going on the strike.  The ILO noted the list of essential services is broader than international standards.  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.

The informal economy plays a significant role in the labor market and economy of Dominica. The IMF has estimated that the informal economy averaged 46 percent of GDP over the 2011-2019 period. Nearly forty percent of informal sector workers were in wholesale and retail trade, with another 24 percent in manufacturing, 9 percent in agriculture, forestry, and fishing, and 29 percent in other industries. Despite the significance of the informal economy in Dominica, there is little evidence of its impact on contracts or access to industries of interest to U.S. and other foreign investors.

							12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs					

As the development bank of the United States, the Development Finance Corporation (DFC) partners with the private sector to finance solutions in developing countries to drive economic growth, create stability, and improve livelihoods.  Dominica was a qualifying country for DFC’s predecessor agency, the Overseas Private Investment Corporation.  There are currently no active DFC projects in Dominica.

							13. Foreign Direct Investment and Foreign Portfolio Investment Statistics					

* Source for Host Country Data: Eastern Caribbean Central Bank https://www.eccb-centralbank.org/statistics/dashboard-datas/.

***Table 3: Sources and Destination of FDI**Data not available.*

							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**

## View report by:

### On This Page

                    -  Executive Summary 
                    -  1. Openness To, and Restrictions Upon, Foreign Investment                        -  Policies Towards Foreign Direct Investment 
                      -  Limits on Foreign Control and Right to Private Ownership and Establishment 
                      -  Other Investment Policy Reviews 
                      -  Business Facilitation 
                      -  Outward Investment 
                    -  2. Bilateral Investment Agreements and Taxation Treaties   
                    -  3. Legal Regime                        -  Transparency of the Regulatory System 
                      -  International Regulatory Considerations 
                      -  Legal System and Judicial Independence 
                      -  Laws and Regulations on Foreign Direct Investment 
                      -  Competition and Anti-Trust Laws 
                      -  Expropriation and Compensation 
                      -  Dispute Settlement                          -  ICSID Convention and New York Convention 
                        -  Investor-State Dispute Settlement 
                        -  International Commercial Arbitration and Foreign Courts 
                      -  Bankruptcy Regulations 
                    -  4. Industrial Policies                        -  Investment Incentives 
                      -  Foreign Trade Zones/Free Ports/Trade Facilitation 
                      -  Performance and Data Localization Requirements 
                    -  5. Protection of Property Rights                        -  Real Property 
                      -  Intellectual Property Rights 
                    -  6. Financial Sector                        -  Capital Markets and Portfolio Investment 
                      -  Money and Banking System 
                      -  Foreign Exchange and Remittances                          -  Foreign Exchange 
                        -  Remittance Policies 
                      -  Sovereign Wealth Funds 
                    -  7. State-Owned Enterprises                        -  Privatization Program 
                    -  8. Responsible Business Conduct                        -  Additional Resources 
                      -  Climate Issues 
                    -  9. Corruption                        -  Resources to Report Corruption 
                    -  10. Political and Security Environment   
                    -  11. Labor Policies and Practices   
                    -  12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs   
                    -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                    -  14. Contact for More Information   

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