The Commonwealth of Dominica (Dominica) is a member of the Organization of Eastern Caribbean States (OECS) and the Eastern Caribbean Currency Union (ECCU). The Government of Dominica strongly encourages foreign direct investment, particularly in industries that create jobs, earn foreign currency, and have a positive impact on its citizens. Dominica remains vulnerable to external shocks such as climate change impacts, natural hazards, and global economic downturns. According to Eastern Caribbean Central Bank (ECCB) figures, the economy of Dominica had an estimated GDP of $409.9 million USD (1,107.78 billion Eastern Caribbean dollars) in 2021, which signified a slight recovery from a 15.4 percent contraction in 2020 due to the ongoing COVID-19 pandemic and the resulting stagnation of the tourism sector. The IMF forecasts real GDP growth of 7.9 percent in 2022 and expects GDP to reach pre-pandemic levels by 2023.
The economy also continues to recover from the devastation caused by Hurricane Maria in 2017. Losses from Hurricane Maria were estimated at $1.37 billion or 226 percent of GDP. Prior to the onset of the COVID-19 pandemic, the government was primarily focused on reconstruction efforts, with support from the international community. During the COVID-19 pandemic, the Government of Dominica has received financial support from the International Monetary Fund (IMF) and the World Bank to provide fiscal assistance and macro-economic stability and support in health-related expenditures, loss of household income, food security, and the agricultural sector.
Through its economic policies, the government is seeking to stimulate sustainable and climate-resilient economic growth by implementing a revised macroeconomic framework that includes strengthening the nation’s fiscal framework. The government states it is committed to creating a vibrant business climate to attract more foreign investment.
Dominica remains a small emerging market in the Eastern Caribbean, with investment opportunities mainly in the service sector, particularly in eco-tourism, information and communication technologies, and education. Other opportunities exist in alternative energy, including geothermal energy, and capital works due to reconstruction and new tourism projects.
The government provides some investment incentives for businesses that are considering establishing operations in Dominica, encouraging both domestic and foreign private investment. Foreign investors can repatriate all profits and dividends and can import capital. Dominica’s legal system is based on British common law. It does not have a bilateral investment treaty with the United States, though it does have bilateral investment treaties with the UK and Germany.
In 2018, the Government of Dominica signed an Intergovernmental Agreement to implement the U.S. Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in Dominica to report the banking information of U.S. citizens.
|TI Corruption Perceptions Index||2021||45 of 180|
|Global Innovation Index||N/A||N/A|
|U.S. FDI in partner country ($M USD, historical stock positions)||N/A||N/A|
|World Bank GNI per capita||2020||7,270|