Benefits of the CONFOTUR Law in the Dominican Republic

The CONFOTUR Law, officially known as Law 158-01 on the Promotion of Tourism Development in the Dominican Republic, is an initiative that seeks to promote tourism development in the country. This law has created a favorable environment for investors in the hospitality and real estate industry, offering significant tax incentives. Here are some of the benefits that project buyers can obtain under the CONFOTUR Law.

1. Exemption from Real Estate Property Tax (IPI):

Under the CONFOTUR Law, approved tourism projects are exempt from Real Estate Property Tax (IPI) for a period of 15 years. This can result in huge savings for buyers, increasing the return on their investment. The Annual Property Tax for individuals consist in 1% per year of the value of the property that exceeds RD$9,520,861.00 (around US$170,000 – as of May 2025).

2. Property Transfer Tax Exemption:

Project buyers are also exempt from paying property transfer tax, which is typically 3% of the property value. This can represent significant savings, especially for higher value projects. The 3% transfer tax is mandatory for all changes made to the title registration and the CONFOTUR is the only exemption that applies.

3. Income Tax Exemption for the project:

The income derived from CONFOTUR-approved tourism projects, including rental income, may be exempt from income tax for up to 10 years depending on different factors. This benefit not only improves the return on investment, but it can also be a huge incentive for those investors looking for rental revenues.

4. Customs tax exemption:

Project developers and buyers are exempt from paying customs taxes on the import of equipment, furniture, vehicles and other goods necessary for their project. This can be especially beneficial for projects that require a large number of imports. In many cases the developers that have CONFOTUR approved for their projects offer furniture packages to the buyers, which usually are high quality items at very good prices due to the import tax exemptions.

5. Access to preferential financing:

The CONFOTUR Law also facilitates access to preferential financing for project buyers. This can include lower interest rates, more favorable loan terms, and greater access to investment capital.

Important note to consider: While some countries require foreign investors to meet residency criteria to qualify for tax benefits, the Dominican Republic it’s among the few countries in the world that don’t differentiate between local citizens, foreigners with residency and foreigners without residency. The CONFOTUR benefits apply equally to all non-residents and foreign nationals. This inclusive policy expands investment opportunities for individuals and organizations worldwide.

Conclusion

In conclusion, the CONFOTUR Law offers a wide range of tax incentives and financial benefits for buyers of projects in the Dominican Republic. Whether you are considering investing in a hotel, a resort, a residential project or any other type of tourism project, the CONFOTUR Law can be an excellent way to improve the profitability of your investment and promote the success of your project.

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