WHEREAS:The export processing zones have become permanent sources of jobs and income generators for the Dominican population, because they can develop anywhere in the country where other sources of work fail to be activated with the same urgent promptness;
WHEREAS: It is of interest to promote a dynamic policy by the state jobs, stimulating the installation and development of new companies whose production is intended mainly to foreign markets;
WHEREAS: A harmonious and rapid development of the free zones of the country, requires the ordering and unification of the various laws and regulations regarding the matters existing at present;
It has given the following law:
FIRST CHAPTER PURPOSE OF LEGISLATION, CONCEPTS AND GENERAL DEFINITIONS
Article 1. This law aims to encourage the establishment of new free zones and the growth of existing ones, regulating its operation and development, defining the basis for identifying goals and objectives that are of national interest, to ensure proper coordination action of public and private sectors to achieve the proposed goals.
Article 2. The free zone is defined as a geographic area of the country, subject to special customs and fiscal controls established in this law, in which the establishment of companies to allocate their production or services to foreign markets permitted by the granting of incentives to encourage their development. Paragraph - Sales of goods from the free zone companies into Dominican territory shall be considered as export and import trade zones to Dominican territory.
Sales of goods from companies in Dominican territory to the free zones will be considered as exports from the Dominican territory and imported by free zones.
Article 3. Free zones are areas duly delimited by fences or walls impassable, so the entrances and exits of people, vehicles and cargo, have to be made exclusively by guarded gates and controlled by staff of the Directorate General of Customs.
Article 4. Shall be eligible to this law, any person or entity that contributes to the development of the country, increasing production, generating jobs and foreign exchange sources.
CHAPTER TWO BENEFICIARIES OF THIS LAW
Article 5. The beneficiaries of this law, the following individuals or entities:
a) OPERATORS OF FREE ZONES are natural or legal persons who have been granted by Executive Decree, on the recommendation of the National Free Zones Council, permits operation of free zones and whose principal activities are to acquire and / or lease land, develop its infrastructure, sell or rent buildings and facilities to companies established or to be established, and make promotional and marketing activities to attract companies whether domestic or foreign.
b) FREE ZONE COMPANIES are the natural or legal persons, who have been granted an installation permit to benefit from the provisions of this law and that destine their production and / or services for export.
c) INVESTORS FREE ZONES are individuals or corporations that invest in capital, finance or securities of an operator and / or a Free Zone company.
CHAPTER THREE TYPES AND LOCATION OF FREE ZONES
Article 6. The following types and location constraints for free zones are established:
a) INDUSTRIAL ZONES OR SERVICES, which may be installed throughout the national territory to engage in the manufacture of goods and services. Paragraph: In the National District, the Executive Branch may regulate the installation of free zones to advanced technological plants, industrial processes or services, requiring highly skilled labor.
b) FREE ZONES OF FRONTIER CHARACTER, which will be granted special incentives, such as those referred to in Article 29 of this Law, and others that the Executive Branch may grant within its constitutional powers. These free trade zones should be located at a distance not less than three (3) and not more than twenty-five (25) kilometers from the border line that separates the Dominican Republic from Haiti.
c) SPECIAL FREE ZONES, which by the nature of the production process require the use of immobile resources whose transformation, is difficult if companies were not established next to natural sources or where the nature of the process or geographical or economic and infrastructural situation of the country require them. They will also be classified as such, existing companies using temporary import raw materials in their production process.
They may temporarily or permanently operate. Paragraph: Those companies presently operating under temporary import regime that want to benefit from this law, they should export 80% of their production and have at least 200 employees in one location or plant. The industries only have one-year deadline for approval from the enactment of this law.
CHAPTER FOUR OPERATORS OF FREE ZONES
Article 7. The promoters, organizers and creators of installation projects, development and management of free zones, must obtain a permit issued and ratified by Decree by the President of the Republic prior to the start of the National Free Zones Council’s operations and activities described in this law.
Paragraph 1. Operating free zones permits may be awarded to a public, mixed, national or foreign entity. Paragraph 2. The operators of free zones shall be represented by investors and boards of directors if any, which will be individuals or corporations. They may issue securities or bonds to finance the construction of buildings and / or development and acquisition of land, with the approval of the Superintendence of Banks, in cases required, in accordance with the laws governing the matter.
Article 8. The free zone operators may construct buildings for offices, warehouses, industrial plants or services, which may be used individually or collectively, by sale or lease by companies that are to be established.
Article 9. The free zone operators are responsible of meeting the following basic requirements before they start trading:
a) The existence of living areas for an adequate job of industrial labor, with basic and essential services, in accordance with generally accepted modern architectural practices.
b) Green and recreational areas to guarantee the surrounding environment, aerated shelters and generally appropriate working conditions.
c) Installation of storm and sanitary sewers and water supply for potable and industrial use, in accordance with generally accepted practices.
d) Facilities for incineration or removal of debris that maintain proper hygiene and physical representation in companies and common areas.
e) Physical installations for equipment and for food, emergency medical services, etc., for both workers and staff dedicated to continuous office work.
f) Adequate facilities to accommodate local customs offices, administrative, etc.
Article 10. Free Zones operators may freely set the price of renting, leasing or selling space occupied by established companies. They may also set the price for services provided, such as: garbage collection, customs affairs, security, medical assistance and others. The lease of buildings and services must be registered with the Secretariat of the National F ree Zones Council.
Article 11. Each free zone operator must pay an annual fee determined by the National Free Zones Council, this cover its own commitments.
Article 12. The free zone operators must submit a monthly report to the Central Bank of the Dominican Republic on operating revenue and expenditure under the protection of this law, in order to maintain foreign exchange controls.
CHAPTER FIVE FREE TRADE EXPORT COMPANIES
Article 13. The free zone companies are natural or legal persons, which the National Free Zones Council has granted an installation permit to benefit from the provisions of this law and allocate their production and / or services export.
Paragraph.- the sale or transfer of goods, equipment or services between companies in a free zone to another is permitted, as well as between companies established in the same free zone, and even between any of these and operating under the Law No.69 of November 16, 1979. Upon approval of the National Free zones Council and complying with legal formalities established in these cases.
Article 14.- Companies willing to settle in the free zone regime, must complete a formal application to the National Council of F ree Zones where consigned: a) Name, address, nationality of the person, company and / or its shareholders;
b) Authorized capital, subscribed and paid;
c) Composition and origin of capital;
d) Type of product or service to develop;
e) Number and types of jobs to be created, foreign and domestic;
f) National added value to generate;
g) Description of raw materials, semi-finished products, packaging, machinery, labels, equipment to be imported and the estimated value thereof.
h) Any other information, by project category, for evaluation, the National F ree Zones Council. Paragraph. A summary of the application shall be published in the press for two (2) consecutive days, so any natural or legal person has the opportunity to oppose this request.
Article 15. The applicant upon receipt of the company documentation shall pay the amount determined by the National Free Zones Council, to cover costs of processing and information processing.
Article 16. Individuals or corporations must obtain an installation permit to be issued by the National Free Zones Council, to be established in an export free zone and benefit from this law.
Article 17. authorized to operate in the export free zone companies may:
a) Enter, store, pack, recycle, display, unpack, manufacture, assemble, refine, process, operate and handle all kinds of products, goods and equipment. b) Provide design, diagramming, telemarketing, telecommunications, printing, typing, translation, software and any other similar or related services.
c) Introduce in export processing zones all machinery, equipment, spare parts and tools necessary for their operation.
d) Trespassing raw materials, equipment, machinery, etc., and labor and services between companies in the same free zone or between companies from different free zones zone if traffic regulations are met, from one to the other, as stipulates in Chapter Eight (8th.) of the Act, which deals with the CUST OMS REGIME.
e) Export up to 20% of its production to the local market and / or Dominican territory, in the case of products manufactured in the country and whose importation is permitted by law, under the control and supervision of the Directorate General of Customs and the National Free Zones Council with the payment of 100% of the corresponding taxes.
f) (Amended by Law 56-07 of May 4, 2007) Export into the customs territory up to one hundred percent (100%) of goods and / or services, duty- free in the case of finished products belonging to the chain textiles, clothing and accessories; leather, footwear manufacturing, leather manufactures.
For all other products, you must pay 100% of rates and taxes established for similar imports, at the time of customs clearance, provided they meet one of the following conditions:
1st. That the product exported is not manufactured in territory outside the Free Zone in the Dominican Republic.
2do. Export the product to have local components, as are domestic raw materials, at least 25% of the total. Paragraph. The imported by free zone companies dedicated to providing logistics and marketing services products may be sold in the local market, with the authorization of the National Free Zones Council, for which they pay rates and taxes established for similar imports at the time to be transferred to Dominican customs territory.
g) Acquire for industrial or service processing, exempt from tax for export, raw materials, packaging, labels, services, etc., that demand of productive sectors not subject to the free zone regime, except for sugar, coffee, cocoa, gold and the products subject to export duties in excess of 20% of its net worth, or those being imported are subsidized for popular consumption.
Paragraph I. The processing in free zones of sugar, coffee, cocoa, gold and products are subject to a tariff rate of more than 20% of its net export value, may be authorized by the National Free Zones Council, it is always shown that the added value must be equal or greater than 50% of its gross value.
Paragraph II- are exempt from all import taxes, rates, customs duties and other related charges, etc., raw materials imported by companies established in Dominican territory, where these are intended for finished or semi-finished products for export free zones, prior authorization of the National Free Zones Council and
Industrial Development Board
h) Change, as often as necessary, subject to only to prior notification to the National Free Zones Council, lines and production processes used.
Article 18. Companies established in free zones, shall submit a monthly report to the Central Bank of the Dominican Republic, with a copy to the appropriate Operator and the National Free Zones Council, on the operations carried out under this law. This report must be given within the first 15 days of each month also indicating the amount of expenses incurred in the country, in order to maintain foreign exchange controls.
CHAPTER SIX NATIONAL FREE ZONES COUNCIL
Article 19. This law, for regulatory and enforcement under the responsibility of the National Council of Free Zones , whic h ha ve the f ollowing functions:
a) Know, evaluate and recommend to the Executive Power the installation of export processing zones, as stated in Chapter Three of this Act.
b) Know, evaluate, approve or reject applications for permits of company installations in free zones, and related to renovations of authorization periods when they have ceased operation or are already installed.
c) Paragraph Applications for installation permits shall be deposited with the Executive Director of the National Free Zones Council or a representative thereof, and will be known in a period not exceeding thirty (30) working days from the date of deposit the return receipt request.
d) Outline a comprehensive policy of promotion and development of free zones sector.
e) Participate in negotiations, agreements, treaties, etc., domestic and foreign that are related to the operations and activities of export processing zones and keep statistics, procedures and controls necessary to ensure full implementation of the agreements, negotiations, etc.
f) Regulate and define relationships between operators and companies in free zones, as well as these and the National Council of Free Zones or other entity whose activities are closely related to the operation of export processing zones.
g) To ensure strict compliance with this law and legal provisions as may be issued on the matter, and instead take measures in case of violation of them.
Article 20.1 The National Free Zones Council, is composed of representatives of public and a private sectors body. Their members are:
a) The Secretary of State for Industry and Commerce, who shall preside;
b) The Secretary of State f or Finance;
c) The Director General of the Industrial Development Corporation;
d) The Executive Director of the Investment and Promotion Center of the Dominican Republic;
e) The Executive Director of the National Free Zones Council, who shall be its Secretary, will speak but not vote;
f) Two representatives of the operators of free zones freely elected by all operators in the country, except the free zones controlled and operated by the Industrial Development Corporation. The designation of each member shall be for a period of two years and will be on a rotating basis;
g) Two representatives of the associations of free zones, freely chosen by all of them and appointed on a rotating basis for two years.
h) A member of the Dominican Association of Exporters (ADOEXPO) chosen by that association.
i) They will be invited to special cases without voice vote, the following officers:
‐ -The Secretary of State of Labor ‐ -The Director General of Customs ‐ -The Director General of Internal Revenue. ‐ -The Director of the Dominican Social Security Institute ‐ -The Executive Director of the National Institute of Technical and Vocational Training.
Article 21. The National Free Zones Council shall meet regularly according to their needs. However, ordinary meetings shall be held at least every thirty (30) days. The decisiveness of the council will be valid with the attendance of half plus one of its members and the final decisions will be taken with the favorable vote of half plus one of the attendees. In case of a tie, the decision of the President of the Council shall be final.
Article 22. The National Council of Free Zones shall have an Executive Director, who shall be appointed by the Executive Branch from a list of three (3) candidates submitted by the National Free Zones Council.
Article 23. ex-officio member of the National Free Zones Council, may be represented at meetings by servers of their respective agencies appointed by each session. In the absence of the President of the National Council of Free Zones or their representatives, the senior member of the council will preside over the meeting. The representatives of the operators and associations of free zone companies may be represented by alternates appointed to the National Free Zones Council.
CHAPTER SEVEN INCENTIVES AND EXEMPTIONS IN FREE ZONES
Article 24.- The free zone operators and enterprises established therein shall be protected under the customs and tax system, as defined in Article 2 of this law, and accordingly receive 100% exemption on the following:
a) Payment of income tax established by the Law No.5911, of 22 May 1962 and its amendments, relating to stock companies.
b) The tax on construction, loan contracts and the registration and transfer of property from the establishment of the free zone corresponding operator.
c) The tax on the establishment of commercial companies or increase their capital.
d) Created payment of municipal taxes that might affect these activities.
e) Of all import taxes, rates, customs duties and other related charges affecting raw materials, equipment, construction materials, parts for buildings, office equipment, etc., all of them destined for construction, preparation or operation in free zones.
f) All taxes on exports or re-export, except those set forth in sections f) and g) of Article 17 of the Law.
g) Patent tax on assets or equity, as well as the transfer tax of industrialized goods and services (ITBIS).
h) Consular charges on importations consigned to operators or free zone companies.
i) Payment of import taxes on equipment and utensils necessary for the installation and operation of cafeterias, health services, medical care, child care, entertainment or amenities or other equipment for the welfare of the working class.
j) Payment of import taxes on transportation equipment such as trucks, garbage trucks, microbuses, minibuses to transport employees and workers to and from the workplace prior approval in each case of the National Free Zones Council from exportation. These vehicles shall not be transferable for at least five (5) years.
Article 25. Operators and free zone companies wishing to build housing for employees and workers in the border region and / or any other province specified in this Act, which in the opinion of the National Free Zones Council, deserve preferential treatment, shall enjoy 100% exemption on imported building materials and equipment necessary to build such housing.
Article 26. Shall be exempt from paying income tax established by the Law No.5911 of 22 May 1962 and its amendments, benefits and / or reinvestments declared as taxable net income by individuals or corporations that are invested in the establishment and development of free zones in accordance with the following percentages and scales:
Paragraph. The annual deduction for exemptions and waivers may not in any case exceed fifty (50%) of annual income, as established by the No.71-86-30 Act of 22 December 1986, published in the GO No .9701. a) One hundred percent (100%), from the total deductible income, in the case of operators of free zones in border free trade zones, etc., in accordance with paragraph c) of Article 6 of this Law.
b) Eighty percent (80%) of the total deductible income, for the National District and geographical area of 50 km.
c) Ninety percent (90%) of the total deductible income, for operators whose geographical location does not meet the descriptions in subparagraphs a) and b).
Article 27. Investments in shares or securities must remain as such for a period not less than three (3) years, and the amount invested that was taken exempted may not be returned to investors for any direct or indirect body before of that period. These investments should focus on: Building construction, purchase and development of land, equipment, supplies and / or working capital.
Paragraph. The National Free Zones Council require an annual investment report, audited by a firm of certified public accountants, showing the amount of exempt investments and given those resources. In case of violation of this provision, the National Free Zones Council will inform the Directorate General of Internal Revenue, who may waive the exemptions provided for in the preceding article.
Article 28. Operators and free zone companies enjoy the exemptions granted by this law to have its first full year of operations for the following periods: a. Free zones located in border areas of the country, for twenty (20) years.
b. Free zones located in the rest of the country, for fifteen (15) years.
Paragraph. National National Free Zones Council may extend operating permits when deemed necessary according to the spirit of this law.
Article 29. In order to enable the establishment and development of free zones in the border region, comprising the provinces of Monte Cristi, Elias Piña, Dajabon, Independencia, Pedernales, Bahoruco and Santiago Rodriguez, the following special benefits are granted:
a. The Industrial Development Corporation, as a State institution responsible for promoting and developing industrial parks and free zones, may lease space to companies that are provided there at subsidized price.
b. The National of Free Zones Council may assign preferential basis, export quotas, if the country is subject to this limitation.
c. The National Free Zones Council may grant special ranking to those companies wishing to settle in the border area free zones, although not comply with the provisions stipulated in section c) of Article 6 of this Act.
d. Operators and companies in free zones to be installed in the border region are eligible to benefit from preferential interest rates agreed by the Central Bank with FIDE funds for loans to the border.
e. In addition to those already listed incentives, the National Free Zones Council may suggest to the executive branch and other incentives for the benefit of the border region.
CHAPTER EIGHT CUSTOMS PROCEDURE
Article 30. The operators of free zones and free zone companies, in accordance with the definitions given by this law, may introduce or withdraw from their facilities machinery, equipment, furniture, raw materials and all kinds of goods own activity industrialist who made subject to customs regulations and exemptions under this Act.
Article 31. The General Customs Directorate established in each free trade zone one collection center or office that will be responsible for maintaining the mechanisms and controls necessary for the items to be checked when entering or leaving them.
Paragraph.- free zone operators shall provide all necessary facilities for compliance with this article as provision of the National Council of F ree Zones.
Article 32. Given the specialized nature of Customs work in the export processing zones and the large volume of goods entering them and leaving them a Customs Branch is intended solely to service free zones that exist in the country or to be installed under this law. This Branch reports to the Director General of Customs. Paragraph.- a rotating basis is established in their membership and location of job, a Special Corps of Customs, exclusively, serving export processing zones. This staff will be under the jurisdiction of the Branch indicated in Article 32 of this Law.
Article 33.- may not be imported by the Free Trade Zones, under this la w, the f ollowing items:
a) Firearms, gunpowder, ammunition and implements of war in general. The regulation weapons to be carried by operators and security companies are exempt from paying taxes, but must meet import procedures and use established by the Ministries of the Armed Forces and Interior and Police. Exception to this provision is implements of war that can be manufactured in export processing zones.
b) Counterfeit currency, whether paper or metal, from any country and wedge, facsimiles, negatives or plates to manufacture or print them.
c) Sewage waste or waste that can pollute or endanger the physical integrity of the Dominican territory or the health of its inhabitants.
d) Groceries, beverages, sweets or other food for consumption by people working in free trade zones.
Article 34. All imports destined to free zone shall be properly sealed to arrive in the country. All imports of the free zones will transit from the ports and airports to the destination, under the supervision and responsibility of the Special Corps of Customs, which shall deliver such goods that, will operate in each free zone. The recipient will only be responsible for verifying and checking the statements and content of the goods imported. Paragraph. discrepancies with shipping documents regarding the content of import shall be communicated to the Director General of Customs and the National Free Zones Council, but will not prevent its use by the recipient, unless they are expressly prohibited items. The Directorate General of Customs may later take actions that are in place within the period specified in the regulations of this Law.
Article 35. Exports from the free zones will be verified by the customs guards on the relevant collection center and then sealed, they will be transported under the supervision of the Special Corps, to the point of embarkation, where they will be placed in the hands of the collector concerned, who in turn sends it to the ship or plane that will take them to their next destination. Article 36. The same transit requirements set out in paragraph of Article 13 of this law, of November 16, 1979, shall be observed when goods or equipment between two or more free zones or with a company operating under the La w No.69 are e xchanged.
CHAPTER NINE THE EXCHANGE OF CURRENCIES
Article 37. Companies established in export processing zones, with regard to their exports of goods and services or imports of raw materials, equipment, machinery, props, etc., subject to the special provisions laid for that law relating to foreign exchange from the Central Bank of the Dominican Republic. Article 38. The free zone companies shall exchange in the Central Bank of the Dominican Republic, the average exchange rate of the day quoted by the agency concerned, the necessary foreign exchange to cover local costs and general services such as:
a. Installation costs; b. Wages, salaries and wages; c. Raw materials, packaging, labels and intermediate products acquired in Dominican territory; d. General insurance; e. Latches for payment of tax on personal or corresponding shareholders dividend income, f. All domestic or foreign personnel working on their premises; g. Communications and local transportation; h. Rent or purchase of land or buildings; i. Any other cost expenditure generated locally. Paragraph. Transactions or operations carried out in accordance with paragraph of Article 13 shall not be subject to the exchange of currencies in the Central Bank, except for local expenses mentioned above. Article 39.- The goods from free zones exported to the Dominican Republic under other customs regulations shall be considered as imports and subject to the provisions of Law No.251, of March 11, 1964 and its amendments, whic h regulates International Funds Transfers. Article 40. The free zone operators and enterprises in export processing zones may obtain loans or guarantees in local or foreign currency, issued by private, public, national, international or mixed institutions, in accordance with the regulations for that purpose may render the Monetary Board. They may also receive national, international, private and state financial institutions, from its own funds, or those that are provided by the national budget, resources from loans to the Dominican Government to its institutions, granted by international organizations or foreign governments, or guaranteed by the Dominican State, guarantees or financing the short, medium and long term, subject to the regulations established in the respective agreements.
CHAPTER TENTH LABOR REGIME
Article 41. Operators and companies established in the free export zones protected by this law must comply with all applicable laws, rules and regulations that are enshrined in the Labor Code and labor laws. Reports shall also meet the obligations under the Social Security Act, the law that created the Workers Bank, the116 Act establishing the National Institute of Technical and Vocational Training (INFOTEP), the international agreements signed and ratified by the Dominican Government about Health and laws for industrial installations.
Article 42. The minimum qualification for apprentices under the Labor Code; wages shall apply to export processing zones as follows:
a. Por Three (3) months in the majority of free zones;
b. Six (6) months in free zones located in border regions.
Article 43. If a worker is laid off after passing his apprenticeship, and subsequently hired by the same company, he cannot be qualified as an apprentice again, and if learning has been partially done, could only be hired as such, for the time to complete the setting above, in each case.
Article 44. Operators and free zone companies that decide to terminate their operations in the country, must notify three (3) months prior to the National Free Zones Council. This will make known, for relevant purposes: the Central Bank of the Dominican Republic, Ministries of Finance, Industry and Commerce and Labor, Dominican Institute of Social Security, Workers’ Bank, Directorate General of Customs and Internal Revenue Department.
Paragraph. Companies that do not comply with the above arrangement, may not withdraw their assets, and if they are not removed without justification, after six (6) months after completion operations will be sold at public auction to cover the debts of the company, if any, belonging to the Dominican State surplus. This procedure will be conducted by the General Directorate of Customs, who shall request the interested party to remove the active warning and failure to do so assets will result in public auction.
Article 45. For the free zone companies who violate the provisions of this law and its regulations, their permits may be canceled, or their installation and / or export b y the National F ree Zones Council.
Article 46.- A free zone operator who violates the provisions of this law and its regulations, may be denied by the National Council of Free Zones, the granting of permits for the installation of new companies or industries or renewal of existing permit.
Article 47.- The free zone companies who violate the provision of this Act and its regulations with regard to the introduction of goods and other items designated by it, shall be sentenced to pay a fine equal to twice the rights and paying taxes left and the confiscation of the goods in question. People who are convicted as accomplices in the infringement penalized in this article shall be jointly liable to financial penalties established in the same paragraph.
Article 48. Articles 45 and 46 of this law may also be applied when operators or companies prevented inspection by the competent authorities, of their physical facilities, records that allow checking machinery, equipment and raw materials exonerated, as well as payments and services made in the country
CHAPTER TWELVE GENERAL DISPOSITION
Article 49. Items to all natural or legal people who at the date of the enactment of this law are operating a free zone under another law, a decree of the Executive and / or contract with the Dominican State, this law will be applied without prejudice to rights already acquired.
Article 50.- All businesses classified in Category A of Law No.299 on Industrial Incentive and Protection of April 23, 1968, as amended, and in free zones established prior to the enactment of this law, they shall apply this law without prejudice to rights already acquired.
Article 51. The Executive shall issue the regulations it deems necessary for the best application of this law, taking into account the recommendations made to the National Free Zones Council. Such regulations shall be completed within a period not to exceed ninety (90) days from the enactment of this law. However, the lack of regulation to which this article refers to will not prevent the application of this law.
Article 52. This law repeals and replaces Law 4315 which creates the institutions of free zones. Except with respect to commercial, port and airport free zones, from October 22, 1955 and its amendments. Law299of April 23, 1968, regarding the classification A, the Decree 895, which integrates the National Free Zones Council, of March 19, 1983. Decree 310-88, dated 30 June 1988, amending Article 1 of Decree 895 and repealing or replacing any law, regulation or regulation contrary to it, except in relation to areas of free port and airport, which are not subject to this legislation. GIVEN in the Sessions Hall of the Chamber of Representatives, National Congress, in Santo Domingo, National District, capital of the Dominican Republic, eight (8) days of the month of November of 1989, year 146 of Independence and 127 of the Restoration.
Luis José González Sánchez President
Aminita Volquez Pérez Secretary
Roberto A. Acosta Angeles Secretary
GIVEN in the Sessions Hall of the Senate, National Congress, in Santo Domingo, National District, capital of the Dominican Republic, on the tenth day of January of the year 1990, 146 years of Independence and 127 of the Restoration.
Francisco Ortega Canela President
Juan José Maza Medina Secretary
Salvador A. Gómez Gil Secretary
President of the Dominican Republic
In exercise of the powers conferred upon me by Article 55 of the Constitution of the Republic;
I PROMULGATE this law and order that it be published in the Official Gazette, for information and compliance. GIVEN in Santo Domingo de Guzman, National District, capital of the Dominican Republic, fifteen (15) days of January of the year 1990, 146 years of Independence and 127 of the Restoration.
Revised and updated by the Legal Counsel of the National Free Zones Council, as the publication of the Official Gazette No.9775, of 15 January 1990, and the amendments introduced b y La w 56-07, Ma y 4 2007. Santo Domingo, Dominican Republic N. D., December 4, 2007.
Regulations for the Implementation of the Law 8-90, dated 15 January 1990, instituted by DECREE NO.366- 97 OF 29 AUGUST 1997.
DECREE NUMBER 366-97
SEEN: Law 8-90 dated January 15, 1990, which encourages the establishment of new free zones and the growth of existing ones.
SEEN: Article 51 of Law 8-90 which provides that the Executive shall issue the regulations it deems necessary for the best application of this law on a recommendation that has referred the National Council of Free Zones .
HAVING SEEN: Resolution 64-97-A of the National Council of Free Zones, dated April 19, 1997, which was approved by the Executive Branch recommending dictation of the rules of the La w 8-90.
WHEREAS: Law 8-90 deserves a regulation defining its scope, interpretation and compliance with current legislation, according to the experience accumulated in the country.
WHEREAS: The National Free Zones Council, from the date that gave it birth, has been regulating different aspects in order to improve the implementation of the said Act, all of which needs to be contained in a regulation with legal force.
In exercise of the powers conferred upon me by Article 55 of the Constitution of the Dominican Republic, I dictate the following:
IMPLEMENTING REGULATIONS OF LAW 8-90, DATED 15 JANUARY 1990.
NATIONAL COUNCIL OF EXPORT FREE ZONES NATURE, DURATION, ADDRESS
Article 1. -The National Free Zones Council responsible for the regulation and enforcement of Law 8-90 institution whose functions are described in Article 19 and following of the Act, in addition to the powers in this Regulation and its annexes.
Article 2. Its duration is indefinite and its home is set in the city of Santo Domingo, National District, Dominican Republic.
COMPOSITION AND ADMINISTRATION OF THE NATIONAL EXPORT FREE ZONES COUNCIL
Article 3. The National Free Zones Council, will have an Executive Director who will be responsible for implementing, monitoring and following up the decisions of this body.
For the operational functions of the Executive Director, National Free Zones Council shall make rules of procedure, as broad as it deems necessary.
Article 4. Functions of the Executiv e Director:
1) Implement mandates and decisions of the National Free Zones Council.
2) Personally or by proxy represent the National Free Zones Council in the public and private events in which it participates.
3) Submit to the approval of the National Free Zones Council, programs, plans and projects, as well as the budget and annual work program.
4) Sign and act on a mandate of the National Free Zones Council and on their behalf, any contract of service or purchase of goods as well as all documents of expenses and financial obligations thereof.
5) Submit to the National Free Zones Council permit applications installation companies and operators of Free Zones, as well as any other requiring the approval of that body.
6) Ensure compliance with the rules and procedures laid down in the Rules of Procedure of the National Free Zones Council.
7) Any other function that the National Free Zones Council delegates.
Article 5. The meetings of the National Free Zones Council shall be convened by the Chairman thereof or by the Executive Director, and / or by the latter at the request of at least two members, with at least forty- eight (48) hours in advance and will be supplemented by the agenda to be covered to each member.
Article 6. Operational Funds of the National Free Zones Council, ma y come from the:
a) Monthly fees charged to operators of free zones and special free zones companies, according to the mechanism agreed by the Council.
b) By selling shipment forms prepared for the purpose by the Council.
c) Grants and / or loans from national and international organizations, in harmony with the external debt policy outlined b y the Monetary Board.
d) Collection procedures based on applications and approvals of permits to be issued to new operators and companies in free zones.
e) Allocation of the Central Government through the National Budget Office, another State Department or Account.
f) Any other sources approved by the National Free Zones Council.
ON THE ACTIVITIES OF FREE ZONE COMPANIES
Article 7. According to Article 6 of Law 8-90, free zones can be industrial or Services, Special, or border.
Article 8. Companies Export Processing Zones or services: those companies dedicated to developing free zones or transform raw materials or semi-processed products imported and then be exported as finished products or semi-finished, as well as those dedicated to offer services to other sector companies or to be exported, directly or indirectly, the product may or may not be of tangible character.
They are considered in this category those services aimed at improving the operating conditions of the site and / or sector and / or living conditions of workers. Also they are considered as such, without the list being limiting, storage for consolidation and export of goods produced by companies in free zones; distribution and / or termination of goods or merchandise, document printing. Also, preparation, sale and service of food to free zone companies and their employees, having to observe the provisions of paragraph d) of Article 33 of La w 8-90.
It shall be deemed to also satisfy the requirement of Article 4 of Law 8-90 companies that by their activity contribute to complement the operations of other companies in free zones.
Article 9. (Amended by Decree No.721-04, dated August 3, 2004). Special Free Zones: those who by the nature of the production process or the characteristics of the company require establishment outside an industrial park. The National Free Zones Council, for evaluation and approval of the application under this category take into account Article 6, Paragraph c) of Law 8-90. Also should the National Free Zones Council, in its capacity as a body responsible for hearing, evaluate, approve or reject applications for permits installation of free zone companies and related renovations, elaborate by order evaluation criteria that will be applied to applications for companies that need to be classified in the category of special free zones and that institution also require and request all information it deems pertinent to assess, complete and weigh the request made. Paragraph I. This category also includes companies that by its production process engaged in the processing and / or industrialization of agricultural items and whose installation is within the premises where crops to be processed are realized wholly or partly. Paragraph II. In order to change activity, the National Free Zones Council must approve the special free zones companies.
OPERATORS OF FREE ZONES Article 10. COMPOSITION OF OPERATOR.
Promoters, organizers and creators of installation projects, de velopment and administration of F ree Zones , shall be eligible 8-90 La w, suc h as: a. PPublic Entity: Institution directly or indirectly dependent of the Dominican State.
b. Mixed entity: undetermined proportion institution composed by public and private sectors.
c. A person or Private Sector.
REQUESTS FOR BUSINESSES AND OPERATORS OF FREE ZONES
Article 11. The decisions of the National Free Zones Council, related to the granting of permits for installation, operation or of any other nature, shall be communicated in writing to the interested parties within fifteen (15) days, from the date on which the decision was taken.
In cases of rejection of application, it must be motivated and communication to the person concerned will explain the reasons for such rejection, giving the possibility to amend the deficiencies and submit a new application.
Article 12. (Amended by Decree 1002-1001 dated October 9, 2001). For the purposes of effective and practical application of the provisions contained in Chapter Eight of Law 8-90, Article 30 and following, the National Free Zones Council approved an Agreement of Customs Affairs for Free Zones, and the Addendum to the Rules of Service of the Directorate General of Customs in the parks free zones and special zones, signed on October 9, 2001 by the director General of Customs, the National Free Zones Council and the Dominican Association of Free Zones, Inc. (ADOZONA).
Article 13. The Agreement for the management of Customs Free Zones Affairs is in charge of an interagency committee composed of representatives of the National Free Zones Council, the Directorate General of Customs and associations and private operators under the coordination of the National Free Zones Council. This three-party committee is empowered to make changes or additions it deems necessary to that Agreement. The agreement for the management of Customs Affairs for Free Zones shall be consistent with the spirit and the letter of the La w 8-90.
Article 14. An internal committee will be formed in each park, composed of one representative of companies of Free Zones, Park Manager and Manager of Customs . The same may freely dispose of all waste, scrap metal, packaging materials equipment, which are not useful or necessary for the operation of enterprises.
REGULATIONS FOR SALE TO LOCAL MARKET
Articulo 15.- (Modificado Article 15. (Amended by Decree No.721-04, dated August 3, 2004). Any free zone company wishing to export in national customs territory under the provisions of paragraphs e) and f) of Article 17 of Law 8-90, must obtain authorization for the purpose by the National Free Zones Council. Such exports are carried out under the following conditions, regarding the authorized rate:
a) Up to 20% In the case of products and / or processed services in the country and whose importation is permitted by law, upon payment of 100% of the corresponding taxes.
b) Up to 100% In the case of products and / or services that are not processed in national territory, after payment of 100% of the taxes.
In the case of products and / or services that have a component in its production of local raw materials of at least 25%, 100% payment of taxes.
Paragraph I: The National Free Zones Council may authorize the national customs territory regardless of the time the applicant’s free zone companies had operated as such, always within the percentage limitations set forth by law.
Paragraph II: To determine the percentage to authorize, in the case of goods and services produced in the local market, at the time of the application; it shall be based on the production exported by the company to international markets in the last calendar year.
In the case of goods or services that are not produced in the country or have in drafting a component of local raw materials of at least 25%, the free zone companies can export their entire production to national territory without limitation for the first (1st.) year after starting operations as a free zone company. From that period, these companies must justify future requests based on exports to the date of the aforementioned applications. Paragraph III: Applicable taxes will be calculated by the Directorate General of Customs excluding the tax base and national components added-values that have intervened in the process of production of the goods in question.
Once the National Free Zones Council authorizes the export to the local market, this forwarded to the Directorate General of Customs the appropriate resolution for the purposes of place.
The Directorate General of Customs shall submit to the National Free Zones Council, periodically, a list of all the settlements of exports authorized in accordance with this Article.
Given in the city, municipality and province of Santiago de los Caballeros, Dominican Republic, at twenty (29) days of the month of August in 1997, year 154 of Independence and 134 of the Restoration.
President of the Dominican Republic
Revised and updated by the Legal Counsel of the National Free Zones Council, as the publication of the Official Gazette.
Santo Domingo, Dominican Republic D. N., December 4, 2007.