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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). According to Eastern Caribbean Central Bank (ECCB) statistics updated in December 2017, Dominica had an estimated Gross Domestic Product (GDP) of USD 562.5 million in 2018. A forecast growth of 7.03 percent for 2018 has been negated by the devastation wrought by the passage of Hurricane Maria. It is estimated that a total of USD 1.37 billion in damages and losses or 226 per cent of GDP was caused when it struck the island in September 2017. As a result of the hurricane, it is expected that the economy will contract in 2017 and 2018. Nonetheless, the Government is focused on reconstruction efforts, with support coming from the international community. The government has announced its commitment to stimulate sustainable and climate-resilient economic growth, which incorporates a revised macroeconomic framework that includes strengthening the nation’s fiscal framework. The current government remains committed to creating a vibrant business climate to attract more foreign investment to the country.

Dominica is currently ranked 98th out of 190 countries in the World Bank’s 2018 Doing Business report. The report highlighted no significant change in the country’s ranking for resolving insolvency, paying taxes, or enforcing contracts, but noted ongoing challenges in obtaining construction permits, electricity, and credit.

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

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

Dominica bases its legal system on British common law. Dominica has no bilateral investment treaty with the United States but has bilateral investment treaties with the United Kingdom and Germany.

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

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2017 57 of 175
World Bank’s Doing Business Report “Ease of Doing Business” 2017 98 of 190 http://www.doing
Global Innovation Index 2017 N/A https://www.globalinnovation
U.S. FDI in partner country (M USD, stock positions) 2015 N/A
World Bank GNI per capita 2015 USD 7,110

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, the government instituted a number of investment incentives for businesses considering the possibility of locating in Dominica, encouraging both domestic and foreign private investment. 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. Fiscal incentives are provided under various laws to encourage the establishment and expansion of both foreign and domestic investment.

The government has prioritized investment in certain sectors, namely; hotel accommodation including eco-lodges and boutique hotels, nature and adventure tourism services, marina and yachting sector development, fine dining restaurants, information and technology services particularly business processing operations, 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 they are 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 last trade policy review for the Organization of Eastern Caribbean States (OECS), of which Dominica is a member, was conducted through the World Trade Organization (WTO) in 2014.

Business Facilitation

The Invest Dominica Authority 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 Invest Dominica Authority provides crucial business support services and market intelligence to all investors. It offers an online tool useful for navigating laws, rules, procedures and registration requirements for foreign investors. It is available at .

All potential investors applying for government incentives must submit their proposals for review by the Invest Dominica Authority 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. It is advisable that investors seek the advice of a local attorney prior to starting the process. Further information is available at:  .

According to the World Bank’s 2018 Doing Business Report, Dominica is ranked 67th of 190 countries in ease of starting a business. It takes just five procedures and 12 days to complete the process. The general practice is to retain an attorney who prepares all the relevant incorporation documents. A business must register with the Companies and Intellectual Property Office, the Tax Authority and the Social Services Institute.

Recently, there has been an increased focus on issues that directly impact women. A number of regional development agencies have launched programs to assist Caribbean women entrepreneurs, notably Caribbean Export and the Women Innovators Network of the Caribbean. Local organizations have also hosted workshops in support of women entrepreneurs. The Government of the Commonwealth of Dominica continues to support the growth of women–led business as they have made immense contribution to the growth and development of the economy. The Government affirms equitable treatment and support of women in the private sector through non- discriminatory processes for business registration process, fiscal incentives, investment opportunities and quality assessments.

Outward Investment

Although the Government of Dominica prioritizes investment retention as a key component of its overall economic strategy, there are no formal mechanisms in place to achieve this. Even so, the economy will continue to require significant foreign investment.

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

The Commonwealth of Dominica has not signed a bilateral investment treaty with the United States. Dominica has bilateral investment treaties with the United Kingdom and with Germany. Dominica has bilateral tax treaties with the United States and the United Kingdom. Dominica is also party to the following:

Caribbean Community (CARICOM)

The Treaty of Chaguaramas established CARICOM in 1973 to promote economic integration among its fifteen Member States. Investors operating in Dominica are given preferential access to the entire CARICOM market. The Revised Treaty of Chaguaramas goes further, establishing the CARICOM Single Market and Economy (CSME), which permits the free movement of goods, capital, and labor within CARICOM States.

Organization of Eastern Caribbean States

The Revised Treaty of Basseterre established the Organization of Eastern Caribbean States (OECS). The OECS consists of seven full Member States: Antigua and Barbuda, Dominica, Grenada, Montserrat, Saint Kitts & Nevis, Saint Lucia and Saint Vincent & the Grenadines and three associate members: Anguilla, Martinique and the British Virgin Islands. Martinique joined as an associate member in 2015. The purpose of the Treaty is to promote harmonization among Member States in areas concerning foreign policy, defense and security, and economic affairs. The seven independent countries of the OECS ratified the Revised Treaty of Basseterre, establishing the OECS Economic Union on January 21, 2011. The Economic Union established a single financial and economic space within which all factors of production, including goods, services and people, move without hindrance.

Economic Partnership Agreement

The Economic Partnership Agreement (EPA) was concluded between the CARIFORUM States and the European Community and its Member States in 2008. The EPA replaced the now expired transitional trade regime of the Cotonou Agreement. 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 Agreement promotes trade-related developments in areas such as competition, intellectual property, public procurement, the environment and protection of personal data.

Caribbean Basin Initiative

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

Caribbean/Canada Trade Agreement

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

Transparency of the Regulatory System

The Commonwealth 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 Invest Dominica Authority provide oversight of the transparency of the system as it relates to investment.

Rule-making and regulatory authority lies with the Unicameral Parliament of the Government of Dominica. The Parliament has one chamber which consists of 21 members elected for a five-year term in single-seat constituencies, nine appointed members and one Speaker and one Clerk of Parliament.

All regulations that relate to foreign investment into Dominica are governed by the relevant national laws of Dominica. These laws are developed within the respective ministries and drafted by the Ministry of Justice, Immigration and National Security. These laws are enforced by the relevant ministry or ministries. The attraction of foreign direct investment is governed principally through the laws that oversee the Invest Dominica Authority and the Citizenship by Investment Program. The National Laws are available online at . This website contains the full text of laws currently in force.

Although some draft bills are not subject to public consultation, input from various stakeholder groups is enlisted in the formulation of the law. In some instances, a special committee is convened to make recommendations on provisions outlined in the law. Public awareness campaigns via print and electronic media are used to sensitize the general population. Copies of proposed regulations are published in the Official Gazette just before the bills are taken to the House of Assembly. Although Dominica does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice. The government maintains a website and an information service on which it posts information such as directories of officials and a summary of laws and press releases. The government budget and an audit of that budget are available on the website:  .

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 is a constitutional provision to guard 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.

Regulations are developed nationally and regionally. At the national level, the relevant ministry reviews and recommends the legal authority that would enable it to effectively perform at the desired levels to reach optimum development objectives. These reviews are then submitted to the Ministry of Justice, Immigration and National Security for the preparation of corresponding draft legislation. Subsequently, the Ministry of Justice, Immigration and National Security reviews all agreements and legal commitments (national, regional and international) to be undertaken by Dominica, to ensure consistency prior to finalization. The Invest Dominica Authority has the main responsibility for investment supervision, whereas the Ministry of Finance monitors investments to collect information for national statistics and reporting purposes.

Dominica’s membership in regional organizations, particularly the Organization of Eastern Caribbean States and its Economic Union, commits the state to implement all appropriate measures to ensure the fulfillment of its various treaty obligations. For example, the new 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 Eastern Caribbean Currency Union, although there are some minor differences in implementation from country to country.

The enforcement mechanisms of these regulations include penalties or legal sanctions. The Invest Dominica Authority 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 Organization of Eastern Caribbean States and the Eastern Caribbean Economic Union, the Commonwealth of 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 Organization of Eastern Caribbean States Authority, unless specific concessions are sought.

The Dominica Bureau of Standards is a statutory body established under the Standards Act of 1999. It develops, establishes, maintains and promotes standards for improving industrial development, industrial efficiency, promoting the health and safety of consumers as well as protecting the environment, food and food products, the quality of life for the citizenry and the facilitation of trade. It also conducts national training and consultations in international standards practices. As a signatory to the World Trade Organization Agreement on the Technical Barriers to Trade, the Commonwealth of Dominica, through the Dominica Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

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. Appeals are made in the first instance to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all Organization of Eastern Caribbean States members.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal, established in 2001 by the Agreement Establishing the Caribbean Court of Justice. 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 Invest Dominica Authority’s foreign direct investment policy is to actively pursue foreign direct investment into priority sectors, and advise the government on the formation and implementation of policies and programs to attract sustainable investment into Dominica. The main laws concerning investment in Dominica are the Invest Dominica Authority Act (2007), the Tourism Act (2005), and the Fiscal Incentives Act. Regulatory amendments have been made to the Income Tax Act, the Value Added Tax Act, the Title by Registration Act, the Stamp Act, the Aliens Landholding Regulation Act and the Residential Levy Act.

All proposals for investment concessions and incentives are reviewed by the Investment Dominica Authority to ensure the project is consistent with the national interest and provides economic benefits to the country. All proposals are submitted to the Cabinet of Dominica for final consideration.

The Invest Dominica Authority provides ‘one-stop shop’ facilitation services to investors to guide them through various stages of the investment process. The Invest Dominica Authority offers a website that is useful for navigating the laws, rules, procedures and registration requirements for foreign investors: .

Under Dominica’s Economic Citizenship Program, foreign individuals may obtain citizenship in accordance with section VII of the Constitution and the 1993 Amendment to the Citizenship Act, which grants citizenship (without voting rights) to qualified investors. Applicants can contribute a minimum of USD 100,000 to the Economic Diversification Fund for a single person or an investment in designated real estate with a value of at least USD 200,000. Applicants must also provide a full medical certificate, undergo a background check and provide evidence of the source of funds before proceeding to the final stage of an interview. The government introduced a Citizen by Investment Certificate in order to minimize the risk of unlawful duplication. Further information can be obtained from the Citizenship by Investment Unit of Dominica website at: .

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 the Community, and actions by which an enterprise abuses its dominant position within the Community. No legislation is yet in operation to regulate competition in Dominica. The OECS agreed to establish a regional competition body to handle competition matters within its single market. The draft OECS bill is with the Ministry of Legal Affairs for review.

Expropriation and Compensation

There are no known pending expropriation cases involving American citizens. In such an event, Dominica would employ a system of eminent domain to pay compensation when property needs to be acquired in the public interest. There were no reported tendencies of the government to discriminate against U.S. investments, companies or landholdings in the reporting period. 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 with regards to contracts entered into with the state. Dominica does not have a Bilateral Investment Treaty or a Free Trade Agreement with an investment chapter with the United States. U.S. Embassy Bridgetown is not aware of any current investment disputes in Dominica.

Dispute resolution in Dominica generally took an average of 681 days. The slow court system and bureaucracy are widely seen as the main hindrances to timely resolutions to commercial disputes. Dominica is ranked 79th out of 190 countries in resolving contracts in the World Bank’s 2018 Doing Business Report. 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 and the local courts do recognize and enforce foreign arbitral awards. The Eastern Caribbean Supreme Court’s Court of Appeal also provides meditation.

Bankruptcy Regulations

Under the Bankruptcy Act (1990), Dominica has a bankruptcy framework that grants certain rights to debtor and creditor. The 2018 Doing Business Report addresses the strength of the framework and its limitations in resolving insolvency in Dominica and ranked Dominica 132nd of 190 countries in this area.

Investment Incentives

In an effort to increase investment in the country, the Government of Dominica implemented a series of investment incentives that have been 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, government encourages local sourcing. There are no requirements for participation either by nationals or by 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 enclave industry, must produce goods exclusively for export outside the CARICOM region.

Enterprise Value Added Maximum Tax Holiday
Group I 50% or more 15 years
Group II 25% to 50 % 12 years
Group III 10% to 25% 10 years
Enclave Enclave 15 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 Hotels Aid Act provides relief from customs duties on items brought into the country for use in construction, extension and equipping of a hotel of not less than five bedrooms. In addition, the Income Tax Act provides special tax relief benefits for approved hotels and villa development. A tax holiday for up to 20 years is available for approved hotel and resort developments and up to 10 years for income accrued from the rental of villas in approved villa developments. These developments must be approved by the Cabinet of Dominica.

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

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

Foreign Trade Zones/Free Ports/Trade Facilitation

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

Performance and Data Localization Requirements

The Government of Dominica does not mandate local employment. The provisions of the Labor Code outline the requirements for acquiring a work permit and prohibit anyone who is not a citizen of Dominica (or the OECS) to engage in employment unless they have obtained a work permit. There is a practice, when work permits are granted to senior management because no qualified nationals are available for the post, to recommend from among citizens of the country, a counterparty trainee. 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, government encourages investments that will create jobs, increase exports and foreign exchange earnings. There are no requirements for participation either by nationals or by the Government in foreign investment projects. There is no requirement that enterprises must purchase a fixed percentage of goods or technology from local sources, but the government encourages local sourcing. Foreign investors receive national treatment. There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance (backdoors into hardware and software, turn over keys for encryption, etc.).

Real Property

Civil law protects physical property and mortgage claims. There are some special license requirements as to acquisition of land, development of buildings and expansion of existing construction, and special standards for various aspects of the tourism industry. Individuals or corporate bodies who are not citizens and who are seeking to acquire land require an Alien Landholders License prior to the execution of transactions, depending upon the amount of land in question. A foreign national may hold less than one acre of land for residential purposes or less than three acres for commercial purposes without obtaining an alien landholding license, if more land is required then a license must be obtained, and the applicant must pay a fee of XCD 6,000 to the Office of the Accountant-General. Applicants must meet all the submission requirements before the grant of license may be considered by the Cabinet. Failure to apply for the license will result in a penalty of XCD 20,000 (USD 7,408. Upon acquiring land under Section 5 for an approved development, the alien shall make an application for development permission under the Physical Planning Act (2002) within 6 months of acquiring the land, and commence construction of the approved development within one year of receipt of development permission. In the World Bank’s 2018 Doing Business Report, Dominica is ranked 164th of 190 countries for ease of registering property. It takes about 42 days to complete the five necessary procedures and the cost is about 13.3 percent of the property value. The report describes the procedure for purchasing and registering property in Dominica.

Intellectual Property Rights (IPR)

Dominica has a legislative framework supporting its commitment to the protection of IPR. While these legal structures governing IP could be considered strong, enforcement generally could be strengthened. The Attorney General is responsible for the administration of intellectual property laws. The registration of patents, trademarks, and service marks is administered by the Companies and Intellectual Property Office.

Dominica is signatory to the Paris Convention for the Protection of Industrial Property (1883), the Patent Cooperation Treaty (PCT) (1970), and the Berne Convention for the Protection of Literary and Artistic Works (1886). It is also a member of the United Nations World Intellectual Property Organization (WIPO).

Article 66 of the Revised Treaty of Chaguaramas (2001) establishing the Caribbean Single Market and Economy commits all 15 members to implement stronger Intellectual Property protection and enforcement. The Economic Partnership Agreement (EPA) that was signed between the CARIFORUM States and the European Community in 2008 contains the most detailed obligations in respect to intellectual property in any trade agreement to which Dominica is a party. The EPA recognizes the protection and enforcement of intellectual property. Article 139 of the EPA requires parties to “ensure an adequate and effective implementation of the international treaties dealing with intellectual property to which they are parties, and of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS).”

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

Dominica is not listed on the USTR’s 2017 Out-Of-Cycle Review of Notorious Markets, or in the 2018 Special 301 Report. For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at .

Capital Markets and Portfolio Investment

Dominica is a member of the Eastern Caribbean Currency Union. As such, it is a member of the Eastern Caribbean Securities Exchange and the Regional Government Securities Market. The Eastern Caribbean Security Exchange is a regional securities market established by the Eastern Caribbean Central Bank and licensed under the Securities Act of 2001, a uniform regional body of legislation governing securities market activities to facilitate the buying and selling of financial products for the eight member territories. The number of equities listed is 13, while the number of debt securities listed is 90. Market capitalization stood at USD 3.07 billion as of December 2016. The Commonwealth of Dominica is a member of this stock exchange, and is open to portfolio investment.

The Commonwealth of Dominica has accepted the obligations of Article VIII of the International Monetary Fund Agreement, Sections 2, 3, and 4 and maintains an exchange system free of restrictions on making payments and transfers for current international transactions. Foreign tax credits normally are not granted unless 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 Eastern Caribbean Central Bank Agreement Act was passed into law by the eight Participating Governments. The Schedule to the Act contains an agreement made on July 5, 1983 by seven member governments and acceded to by the Government of Anguilla on April 1, 1987. This Agreement provides for the establishment of the Eastern Caribbean Central Bank, 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 as such, the Eastern Caribbean Central Bank controls Dominica’s currency and regulates its domestic banks.

In its latest annual report, the Eastern Caribbean Central Bank listed the commercial banking sector as stable. Assets of commercial banks in Dominica totaled USD 938.7 million at the end of December 2017 and remained relatively consistent during the previous year. The reserve requirement for commercial banks was 6 percent of deposit liabilities.

International banks domiciled in the U.S., Canada and Europe are reviewing their correspondent banking relationships in regions that they deem as high-risk for financial services. The Caribbean witnessed a withdrawal of these services by U.S. and European banks in the last three years. In 2015, the Caribbean Community declared the loss of correspondent banking to be a grave issue facing the region. The Caribbean Community is committed to engaging with key stakeholders on the issue and appointed a Committee of Ministers of Finance on Correspondent Banking to collate a collective response to this issue.

In March 2018, the ECCB signed a Memorandum of Understanding with Barbados-based fintech company, Bitt Inc. to conduct a fintech pilot on blockchain technology in ECCB member countries. During the pilot, the ECCB will work closely with Bitt Inc. to develop, deploy and test technology which focuses on data management, compliance and transaction monitoring system for Know Your Customer, Anti-Money Laundering, and Combating the Financing of Terrorism (KYC/AML/CFT). This will help to improve the risk profile of the Eastern Caribbean Currency Union (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; and the issuance of a digital EC currency which will operate alongside physical EC currency. The pilot is expected to begin in late 2018.

Dominica remains well served by Bank and Non-Bank Financial Institutions. As a consequence there are minimal alternative financial services being offered. Informal community group lending is still practiced in some sections of the population, albeit not as significantly as in previous years.

Foreign Exchange and Remittances

Foreign Exchange Policies

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

Remittance Policies

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

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

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

Sovereign Wealth Funds

The Eastern Caribbean Central Bank, of which Dominica is a member, does not maintain a Sovereign Wealth Fund.

State-Owned Enterprises (SOEs) in Dominica work in partnership with ministries, or under their remit — carrying 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.

SOEs in Dominica are governed by their respective legislation and do not generally pose a threat to investors, as they are not designed for competition. However many are established in the context of creating economic activity in areas where the private sector is perceived to have very little interest. They are all wholly-owned government entities. They are headed by boards of directors to which senior management reports.

Privatization Program

Dominica does not currently have a targeted privatization program.

Responsible business conduct (RBC) among both producers and consumers is positively regarded in Dominica. The private sector is involved in projects that benefit society, including in support of environmental, social, and cultural causes. Individuals benefit from business-sponsored initiatives when local and foreign owned enterprises pursue volunteer opportunities and make monetary or in-kind donations to local causes.

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

The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively. According to civil society sources and members of the political opposition, officials sometimes engaged in corrupt practices with impunity. Dominica acceded to the United Nations Convention against Corruption on May 28, 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: .

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

In June 2015, twelve Commonwealth Caribbean countries including Dominica established a new regional body to enhance transparency and to help fight corruption. The formation of the Association of Integrity Commissions and Anti-Corruption Bodies in the Commonwealth Caribbean was heralded as a major step forward in regional efforts to support integrity and address corruption. It is hoped the new body will help to further strengthen public confidence in cross-border initiatives to enhance accountability, knowledge sharing and coordination.

Resources to Report Corruption

Dermot Southwell
Integrity Commission
Cross Street, Roseau, Dominica
Tel: 1-767-266-3436

Dominica held parliamentary elections in December 2014 and the next general elections is constitutionally due by December 2019. On February 7, 2017, riot police were dispatched in the capital city of Roseau to disperse protestors who, vandalized, looted, and started fires at nine businesses. This happened after the main opposition party, the United Workers Party (UWP), held a public meeting that demanded the resignation of the Prime Minister earlier that day. The demand stemmed from allegations that the Prime Minister sold diplomatic passports to criminals and abused Dominica’s economic citizenship by investment program. The Government called these disturbances an “opposition orchestrated attempt to overthrow the government.” The opposition denied this, however, and publicly condemned the violence that followed the public meeting. Following these disturbances, a number of persons were arrested, including an opposition Member of Parliament, an opposition Senator and two other opposition politicians. The President emphasized that despite the right of every Dominican to freedom of expression and freedom to assemble, citizens should still abide by the law.

After the passage of Hurricane Maria in September 2017, there were reports of widespread looting and vandalism of businesses in the capital city of Roseau and its environs. The private sector has called for a public enquiry highlighting that an enabling environment was crucial for attracting private investors

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

The country’s technical and training needs are met largely by the local state college, which offers courses in various technical and vocational skills. 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 United Kingdom 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.

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

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

The labor laws clearly regulate and define layoffs and the conditions under which layoffs can occur. These are regulated by the Protection of Employment Act Chapter 89:02. Severance by redundancy is also regulated by law. Persons employed for three years or more qualify for severance pay, which is regulated under this law. 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. The Constitution of Dominica and labor legislation, especially the Industrial Relations Act Chapter 89:01, provide the right of workers to form and join independent unions, provide the right to strike, and protect the right of workers to bargain collectively with employers. The government generally enforced laws governing worker rights effectively, with successful penalties and remedies. The law prohibits anti-union discrimination by providing that employers must reinstate workers who file a successful complaint of illegal dismissal, which can cover being fired for engaging in union activities or other grounds of wrongful dismissal.

Collective bargaining is permitted in all firms (both public and private) where the employees are unionized. A copy of the agreement must be lodged 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 (8) core conventions, which are based on human rights and labor administration.

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

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

There are no known serious gaps in compliance disputes as related to termination of employment, layoffs and redundancies.

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 be employed gainfully. 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. No new laws were introduced during the reporting period. However, the government announced a review of all laws, which will commence under the recently appointed Law Commission.

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

Table 2: Key Macroeconomic Data, U.S. FDI in Dominica

Dominica Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) (M USD) 2017 USD 562.5 2016 USD 581.4 
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 N/A N/A BEA data available at
Host country’s FDI in the United States (M USD, stock positions) N/A N/A N/A N/A BEA data available at
Total inbound stock of FDI as % host GDP N/A N/A N/A N/A N/A

* Source: Eastern Caribbean Central Bank Statistics: (accessed May 12, 2018). All ECCB GDP figures for 2017 are currently estimates.

Table 3: Sources and Destination of FDI

Data not available. The Commonwealth of Dominica does not appear in the IMF’s Coordinated Direct Investment Survey.

Table 4: Sources of Portfolio Investment

Data not available. The Commonwealth of Dominica does not appear in the IMF’s Coordinated Portfolio Investment Survey for Sources of Portfolio Investment.

Commercial and Economic Affairs, Political/Economic Section
U.S. Embassy to Barbados, the Eastern Caribbean and the Organization of Eastern Caribbean States

2018 Investment Climate Statements: Dominica
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