The Commonwealth of Dominica (Dominica) is located between the French territories of Guadeloupe and Martinique in the Leeward Islands chain of the Lesser Antilles. Dominica is a member of the Organization of Eastern Caribbean States (OECS) and the Eastern Caribbean Currency Union (ECCU). Dominica had an estimated gross domestic product (GDP) of $596 million in 2019. Prior to the COVID-19 crisis, growth was forecast at 5.47 percent for 2020, according to Eastern Caribbean Central Bank (ECCB). However, the coronavirus pandemic has reduced the gains that were expected to strengthen Dominica’s economic position in the near term. Preliminary estimates by the International Monetary Fund (IMF) in April 2020 predicted that GDP would instead contract 4.7 percent.
In the World Bank’s 2020 Doing Business Report, Dominica ranked 111th out of 190 countries, compared to 103rd the previous year. Over the past three years, Dominica made paying taxes less costly by reducing the corporate income tax rate. However, the 2019 report noted that transferring property became a slower process.
Dominica continues to recover from the devastation caused by Hurricane Maria in 2017. Losses from Hurricane Maria are estimated at $1.37 billion or 226 percent of GDP. The government continues to be focused on reconstruction efforts, with support from the international community. The government is seeking to stimulate sustainable and climate-resilient economic growth through a revised macroeconomic framework that includes strengthening the nation’s fiscal framework. The government states it is committed to creating a vibrant business climate to attract more foreign investment.
Dominica remains an emerging market in the Eastern Caribbean (EC), with investment opportunities mainly within the service sector, particularly in eco-tourism; information and communication technologies; and education. Other opportunities exist in alternative energy, including geothermal energy, and capital works due to reconstruction and new tourism projects.
Recently, the government instituted a number of investment incentives. Foreign investors in Dominica can repatriate all profits and dividends and can import capital.
Dominica’s legal system is based on British common law. It does not have a bilateral investment treaty with the United States, but has bilateral investment treaties with the UK and Germany.
In June 2018, the government of Dominica signed an Intergovernmental Agreement to implement the U.S. Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in Dominica to report the banking information of U.S. citizens.
|TI Corruption Perceptions Index||2019||48 of 180||http://www.transparency.org/
|World Bank’s Doing Business Report||2020||111 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2019||N/A||https://www.globalinnovationindex.org/
|U.S. FDI in partner country ($M USD, historical stock positions)||2019||N/A||http://apps.bea.gov/
|World Bank GNI per capita ($ M USD)||2018||7,090||http://data.worldbank.org/
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
The government of Dominica strongly encourages foreign direct investment (FDI), particularly in industries that create jobs, earn foreign currency, and have a positive impact on local citizens.
Through the Invest Dominica Authority (IDA), the government instituted a number of investment incentives for businesses considering 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 (CBI) projects.
The government has prioritized investment in certain sectors, such as hotel accommodation, including eco-lodges and boutique hotels, nature and adventure tourism services, marina and yachting sector development, fine dining restaurants, and information and technology services, particularly business processing operations. Other sectors include film, music, and video production, agro-processing, manufacturing, bulk water export and bottled water operations, medical and nursing schools, health and wellness tourism, geothermal and biomass industries, biodiversity, aquaculture, and English language training services. The government has signaled that it is also willing to consider additional sectors.
Limits on Foreign Control and Right to Private Ownership and Establishment
There are no limits on foreign control in Dominica. Foreign investment in Dominica is not subject to any restrictions, and foreign investors are entitled to receive the same treatment as nationals of Dominica. Foreign investors are entitled to hold up to 100 percent of their investment. The only restriction is the requirement to obtain an Alien Landholders License for foreign investors seeking to purchase property for residential or commercial purposes. Local enterprises generally welcome joint ventures with foreign investors in order to access technology, expertise, markets, and capital.
Other Investment Policy Reviews
The OECS, of which Dominica is a member, has not conducted a trade policy review since 2014.
The IDA is Dominica’s main business facilitation unit. It facilitates FDI into priority sectors and advises the government on the formation and implementation of policies and programs to attract investment in Dominica. The IDA provides business support services and market intelligence to all investors. It offers an online tool useful for navigating laws, rules, procedures, and registration requirements for foreign investors. 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 .
According to the World Bank’s Doing Business Report for 2020, Dominica ranks 71st out of 190 countries in the ease of starting a business. It takes five procedures and about 12 days to complete the process. The general practice is to retain an attorney who prepares all the relevant incorporation documents. A business must register with CIPO, the Tax Authority, and the Social Services Institute.
The government of Dominica continues to support the growth of women-led businesses. The government supports equitable treatment and support of women in the private sector through non-discriminatory processes for business registration, fiscal incentives, investment opportunities, and quality assessments.
There is no restriction on domestic investors seeking to do business abroad. Local companies in Dominica are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the OECS Economic Union and the Caribbean Community Single Market and Economy (CSME), which enhance the competitiveness of the local and regional private sectors across traditional and emerging high-potential markets.
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 Justice, Immigration and National Security. FDI is governed principally through the laws that oversee the IDA and CBI. 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 just before the bills are taken to parliament. Although Dominica does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice. The government maintains a website and an information service on which it posts information such as directories of officials and a summary of laws and press releases.
Accounting, legal, and regulatory procedures are generally transparent and consistent with international norms. The International Financial Accounting Standards, which stem from the General Accepted Accounting Principles, govern the accounting profession in Dominica.
The Office of the Parliamentary Commissioner or Ombudsman guards against excesses by government officers in the performance of their duties. The Ombudsman is responsible for investigating any complaint relating to any decision or act of any government officer or body in any case in which a member of the public claims to be aggrieved or appears to the Ombudsman to be the victim of injustice as a result of the exercise of the administrative function of that officer or body.
Dominica’s membership in regional organizations, particularly the OECS and its Economic Union, commits 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 Act and its regulations.
International Regulatory Considerations
As a member of the OECS and the ECCU, Dominica subscribes to a set of principles and policies outlined in the Revised Treaty of Basseterre. The relationship between national and regional systems is such that each participating member state is expected to coordinate and adopt, where possible, common national policies aimed at the progressive harmonization of relevant policies and systems across the region. Thus, Dominica is obligated to implement regionally developed regulations, such as legislation passed under OECS authority, unless specific concessions are sought.
The Dominica Bureau of Standards develops, 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 World Trade Organization (WTO) Agreement on the Technical Barriers to Trade, Dominica, through the Dominica Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.
Dominica ratified the WTO Trade Facilitation Agreement (TFA) in 2016. Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade. The TFA aims to improve the speed and efficiency of border procedures, facilitate trade costs reduction, and enhance participation in the global value chain. Dominica has already implemented a number of TFA requirements. A full list is available at https://tfadatabase.org/members/dominica/measure-breakdown .
The Advanced Cargo Information System is a CARICOM project that seeks to improve the capability to track cargo efficiently. Dominica is one of three regional pilot countries that have already enacted the enabling legislation. Dominica has fully implemented the Automated System for Customs Data.
Legal System and Judicial Independence
Dominica bases its legal system on British common law. The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice in the country. The Eastern Caribbean Supreme Court Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal. The High Court hears criminal and civil matters and makes determinations on the interpretation of the Constitution. Parties may appeal to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all OECS members.
The Caribbean Court of Justice (CCJ) is the regional judicial tribunal. The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas. In 2015, Dominica acceded to the CCJ, making the CCJ its final court of appeal.
The United States and Dominica are both parties to the WTO. The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.
Laws and Regulations on Foreign Direct Investment
The main laws concerning investment in Dominica are the Invest Dominica Authority Act (2007), the Tourism Act (2005), and the Fiscal Incentives Act. Regulatory amendments have been made to the Income Tax Act, the Value Added Tax Act, the Title by Registration Act, the Alien Landholding Regulation Act, and the Residential Levy Act.
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 CBI 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.
ICSID Convention and New York Convention
Dominica is not a party to the Convention on the Settlement of Investment Disputes. However, it is a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Arbitration Convention. The Arbitration Act of 1988 is the main legislation that governs arbitration in Dominica. It adheres to the New York Arbitration Convention.
Investor-State Dispute Settlement
Investors are permitted to use national or international arbitration for contracts entered into with the state. Dominica does not have a Bilateral Investment Treaty or a Free Trade Agreement with an investment chapter within the United States.
The country ranks 95th out of 190 countries in resolving contract disputes in the 2020 World Bank Doing Business Report, twelve spots lower than the previous year. Dispute resolution in Dominica takes an average of 741 days. The slow court system and bureaucracy are widely seen as the main hindrances to timely resolution of commercial disputes. Through the Arbitration Act of 1988, the local courts recognize and enforce foreign arbitral awards issued against the government. Dominica does not have a recent history of investment disputes involving a U.S. person or other foreign investors.
International Commercial Arbitration and Foreign Courts
The Eastern Caribbean Supreme Court is the domestic arbitration body. Local courts recognize and enforce foreign arbitral awards. The Eastern Caribbean Supreme Court’s Court of Appeal also provides mediation.
Under the Bankruptcy Act (1990), Dominica has a bankruptcy framework that grants certain rights to debtor and creditor. The 2020 Doing Business Report ranks Dominica 136th out of 190 countries in resolving insolvency.
4. Industrial Policies
The government of Dominica implemented a series of investment incentives codified in the Fiscal Incentives Act. These include tax holidays for up to 20 years for approved hotel and resort development projects, duty-free concessions on the purchase of machinery and equipment, and various tax exemptions. While there is no requirement for enterprises to purchase a fixed percentage of goods from local sources, the government encourages local sourcing. There are no requirements for participation by nationals or the government in foreign investment projects.
Under the Fiscal Incentives Act, four types of enterprise qualify for tax holidays. The length of the tax holiday for the first three depends on the amount of value added in Dominica. The fourth type, known as an enclave industry, must produce goods exclusively for export outside of the CARICOM region.
|Enterprise||Value Added||Maximum Tax Holiday|
|Group I||50 percent or more||15 years|
|Group II||25 percent to 50 percent||12 years|
|Group III||10 percent to 25 percent||10 years|
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 villa developments. The Cabinet must approve these developments.
The standard corporate income tax rate is 25 percent. There is no capital gains tax. International businesses are exempt from tax. Corporate tax does not apply to exempt companies or to enterprises that have been granted tax concession.
Dominica provides companies with a further tax concession effective at the end of the tax holiday period. In effect, it is a rebate of a portion of the income tax paid based on export profits as a percentage of total profits. Full exemption from import duties on parts, raw materials, and production machinery is also available.
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, 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
Civil law protects physical property and mortgage claims. There are some special license requirements for the acquisition of land, development of buildings, and expansion of existing construction, and special standards for various aspects of the tourism industry. Individuals or corporate bodies who are not citizens and who are seeking to acquire land require an Alien Landholders License prior to the execution of transactions, depending upon the amount of land in question. A foreign national may hold less than one acre of land for residential purposes or less than three acres for commercial purposes without obtaining an alien landholding license.
If more land is required then a license must be obtained, and the applicant must pay a fee of $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.
Dominica is ranked 179thof 190 countries for ease of registering property in the World Bank Doing Business Report 2020. It takes about 125 days to complete the five necessary procedures and the cost is about 13.3 percent of the property value. The report describes the procedure for purchasing and registering property in Dominica.
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 supporting its commitment to the protection of intellectual property rights (IPR). While the legal structures governing IPR are generally adequate, enforcement could be strengthened. The Attorney General is responsible for the administration of IPR laws. The Companies & Intellectual Properties Office (CIPO) registers patents, trademarks, and service marks.
Dominica is signatory to the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, and the Berne Convention for the Protection of Literary and Artistic Works. It is also a member of the UN World Intellectual Property Organization (WIPO).
Article 66 of the Revised Treaty of Chaguaramas (2001) establishing the CSME commits all 15 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) Special 301 Report or Notorious Markets List.
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 2019, the ECSE listed 149 securities, comprising 128 sovereign debt instruments, 13 equities, and eight corporate bonds. Market capitalization stood at $1.8 billion, a significant decrease from 2018. This decrease was primarily due to the delisting of CIBC FirstCaribbean International Bank Ltd., which previously accounted for 79.2 percent of total capitalization. Dominica is open to portfolio investment.
Dominica has accepted the obligations of Article VIII of the International Monetary Fund (IMF) Agreement, Sections 2, 3, and 4 and maintains an exchange system free of restrictions on making payments and transfers for current international transactions. Dominica does not normally grant foreign tax credits except in the case of taxes paid in a British Commonwealth country that grants similar relief for Dominica taxes or where an applicable tax treaty provides a credit. The private sector has access to credit on the local market through loans, purchases of non-equity securities, and trade credits and other accounts receivable that establish a claim for repayment.
Money and Banking System
The eight participating governments of the ECCU have passed the Eastern Caribbean Central Bank Agreement Act. The Act provides for the establishment of the ECCB, its management and administration, its currency, relations with financial institutions, relations with the participating governments, foreign exchange operations, external reserves, and other related matters. Dominica is a signatory to this agreement and the ECCB controls Dominica’s currency and regulates its domestic banks.
The Banking Act is a harmonized piece of legislation across the ECCU. The Minister of Finance usually acts in consultation with, and on the recommendation of, the ECCB with respect to those areas of responsibility within the Minister of Finance’s portfolio.
Domestic and foreign banks can establish operations in Dominica. The Banking Act requires all commercial banks and other institutions to be licensed in order to conduct any banking business. The ECCB regulates financial institutions. As part of ongoing supervision, licensed financial institutions are required to submit monthly, quarterly, and annual performance reports to the ECCB. In its latest annual report, the ECCB listed the commercial banking sector in Dominica as stable. Assets of commercial banks totaled $781.2 million in 2019, an 11 percent decrease from the previous year due primarily to contraction in the net foreign asset position. The reserve requirement for commercial banks was six percent of deposit liabilities.
Dominica is well served by bank and non-financial institutions. There are minimal alternative financial services. Some citizens still participate in informal community group lending.
The Caribbean region has witnessed a withdrawal of correspondent banking services by the U.S. and European banks. CARICOM remains committed to engaging with key stakeholders on the issue and appointed a Committee of Ministers of Finance on Correspondent Banking to monitor the issue.
In March 2019, the ECCB launched an 18-month financial technology pilot to launch a Digital Eastern Caribbean dollar (DXCD) with its partner, Barbados-based Bitt Inc. The ECCB will work closely with Bitt to develop, deploy, and test technology focusing on data management, compliance, and transaction monitoring systems for know your customer, anti-money laundering, and combating the financing of terrorism. The goal of the pilot is to improve the risk profile of the ECCU and mitigate against the trend of de-risking by the region’s correspondent banking partners. The pilot will also focus on developing a secure, resilient digital payment and settlement platform with embedded regional and global compliance. The digital Eastern Caribbean currency will operate alongside physical Eastern Caribbean currency. The ECCB will issue the DXCD to licensed bank and non-bank financial institutions on a private blockchain platform. DXCD is expected to launch mid-2020.
Foreign Exchange and Remittances
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.
Companies registered in Dominica have the right to repatriate all capital, royalties, dividends, and profits free of all taxes or any other charges on foreign exchange transactions. There are no restrictions on the repatriation of dividends for totally foreign-owned firms. However, a mixed foreign-domestic company may repatriate profits to the extent of its foreign participation.
As a member of the OECS, there are no exchange controls in Dominica and the invoicing of foreign trade transactions are allowed in any currency. Importers are not required to make prior deposits in local funds and export 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. There are currently 20 SOEs in Dominica 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. The debt of SOEs contributed 12 percent of GDP to the stock of public sector debt in 2016, mostly concentrated in financial public entities.
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 company.
The law provides criminal penalties for official corruption, and the government generally implements these laws effectively. According to civil society sources and members of the political opposition, officials sometimes engage in corrupt practices with impunity. Civil society groups staged a protest alleging the government had misappropriated $370 million (1 billion Eastern Caribbean dollars) in revenues from the CBI program. A 2019 al-Jazeera video documented allegations of government officials selling diplomatic passports. The government denied both allegations. Dominica acceded to the United Nations Convention Against Corruption in 2010. The country is party to the Inter-American Convention against Corruption.
The Integrity in Public Office Act, 2003 and the Integrity in Public Office (Amendment) Act 2015 require government officials to account annually for their income, assets, and gifts. All offenses under the act, including the late filing of declarations, are criminalized. The Integrity Commission was established and functions under this Act. The Integrity Commission’s mandate and decisions can be found at http://www.integritycommission.gov.dm . 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. Additionally, the Integrity Commission has not updated documents on its website since 2015.
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
Chairman, Integrity Commission
Cross Street, Roseau, Dominica
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 has been strongly affected by the COVID-19 crisis. The IMF has projected that Dominica’s GDP will fall by 4.7 percent in 2020. In April 2020, the government of Dominica began work on an economic stimulus proposal. ECCU member financial institutions agreed to facilitate loan moratoriums or deferments for a period of six months, along with waivers of fees and charges for customers. The World Bank provided $6.6 million to Dominica to provide immediate funding to enhance health system capacity and strengthen food security.
11. Labor Policies and Practices
The government last raised Dominica’s minimum wage in June 2008. It varies according to the category of worker, with the lowest minimum wage set at about $1.50 an hour and the maximum set at around $2.06 an hour. The standard workweek is 40 hours for five or six days of work. The law provides overtime pay for work in excess of the standard workweek. Dominica has a labor force of about 32,630, with a literacy rate of 95 percent.
The local state college largely meets the country’s technical and training needs. There is also a small pool of professionals to draw from in fields such as law, medicine, engineering, business, information technology, and accounting. Many of the professionals in Dominica trained in the United States, Canada, the UK, or the wider Caribbean, where many of them gained work experience before returning to the country.
The labor legislation in Dominica is applicable to all employees and employers. There are no waivers or exceptions regarding the application of labor laws and standards in Dominica.
Employers usually advertise job vacancies in local newspapers. The government recommends that the advertisement should be placed on three separate occasions to ensure transparency and equal opportunity for Dominican residents to apply. The government does not interfere with the employer’s right to make hiring determinations.
The Labor Contract Act stipulates that the employees shall receive a contract within 14 days of engagement from his/her employer, which outlines the terms and conditions of employment.
The labor laws clearly regulate and define layoffs and the conditions under which layoffs can occur. Severance by redundancy is also regulated by law. People employed for three years or more qualify for severance pay. Social security benefits are payable only when the employee reaches retirement age.
The Industrial Relations Act provides for and regulates trade unions in both public and private sectors. Dominican law provides for the right of workers to form and join independent unions, the right to strike, and the right of workers to bargain collectively with employers. The government generally 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 the banana, coconut, and citrus fruit cultivation workers “essential,” deterring workers in these sectors from going on the strike. The International Labor Organization 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.
12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs
As the development bank of the United States, the U.S. International 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
|Host Country Statistical source*||USG or international statistical source||USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
|Host Country Gross Domestic Product (GDP) ($M USD)||2019||453.4||2018||550.9||www.worldbank.org/en/country|
|Foreign Direct Investment||Host Country Statistical source*||USG or international statistical source||USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
|U.S. FDI in partner country ($M USD, stock positions)||N/A||N/A||2018||N/A||BEA data available at
|Host country’s FDI in the United States ($M USD, stock positions)||N/A||N/A||2018||N/A||BEA data available at
|Total inbound stock of FDI as % host GDP||N/A||N/A||2018||58.3%||UNCTAD data available at
* 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.
Table 4: Sources of Portfolio Investment
Data not available.
14. Contact for More Information
U.S. Embassy to Barbados, the Eastern Caribbean and the Organization of Eastern Caribbean States