Dominican Republic free zone companies operating under Law 8-90 pay 0% corporate income tax for 15 to 20 years, 0% import duties on all production inputs and machinery, and 0% export taxes on finished goods. On $5M in annual profit, the difference vs Mexico’s 30% corporate rate is $1.5M saved annually before touching labor costs.

Full Tax Exemption Table — Law 8-90 (2026)

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How Law 8-90 Works

Law 8-90, enacted in 1990, established the legal framework for Dominican Republic free zones. It created CNZFE (National Free Zones Council) as the regulatory body and defined the conditions under which foreign manufacturers qualify for the full exemption package. The law has remained stable for over 30 years and has not been subject to retroactive changes that would affect existing operations.

The exemption is statutory, not discretionary. A qualifying company receives the full package upon CNZFE approval — there is no negotiation or case-by-case deal structure.

Who Qualifies

To qualify under Law 8-90, a company must operate within a designated free zone park, engage in export-oriented manufacturing or services, obtain CNZFE operational license, and maintain separate accounting from any domestic operations.

There is no minimum investment threshold for standard free zone qualification. Build-to-suit and leased facility options are both eligible. Setup timeline from application to operational status runs 45 to 90 days for CNZFE licensing.

Practical Example: $5M Profit Manufacturer

A manufacturer generating $5M in annual profit pays $0 in Dominican Republic corporate tax under Law 8-90. The same operation in Mexico pays $1.5M at the 30% statutory rate plus a 10% PTU (profit sharing) obligation on pre-tax income. In the U.S., the federal rate is 21% plus state taxes. The DR advantage is not a marginal difference — it is the dominant variable in the total cost model for profitable operations.

Frequently Asked Questions

Does the 0% tax rate apply to foreign shareholders? Yes. Dividend withholding is also exempt, so profits can be repatriated to foreign shareholders without Dominican tax deduction.

What happens after the 15-20 year exemption period? Companies apply for renewal or transition to standard Dominican corporate tax rates. Most established operators have renewed or restructured. The renewal process is governed by CNZFE.

Does Law 8-90 apply to service companies as well as manufacturers? Yes. Qualifying services including call centers, back-office operations, and technology services can also operate under the free zone framework with the same tax benefits.

Is the exemption affected by the OECD global minimum tax? For companies subject to the 15% OECD Pillar Two minimum, the effective rate on DR free zone profits may be subject to top-up tax in their home jurisdiction. This applies primarily to very large multinationals and requires separate tax analysis.

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