Law 8-90 at a glance, DR free zone economics
| Labor Cost (semi-skilled) | ~$2.50–$3.40 / hr (fully loaded ~$4–$5) |
| Corporate Tax | 0% (Law 8-90 free zone regime) |
| Shipping to U.S. East Coast | 2–4 days (Caucedo, Río Haina) |
| Setup Timeline | 4–8 months (CNZFE → operational) |
| Trade Access | CAFTA-DR duty-free to U.S. |
| Best Fit | Med devices, electronics, textiles, light industrial |
Law 8-90 Exemptions: At a Glance
Is this relevant for your company?
- You are considering moving production closer to the U.S.
- You sell into the U.S. market and need lower landed costs
- You want to reduce labor, tariff, or tax exposure
- You are comparing DR vs. Mexico or other nearshore options
| Benefit | What’s Covered | Duration |
|---|---|---|
| Corporate income tax | 100% exempt | 20 years, renewable |
| Import duties | 0% on machinery, equipment, raw materials | Full exemption period |
| Export tax | 0% on all manufactured goods exported | Full exemption period |
| VAT / ITBIS | 100% exempt on free zone transactions | Full exemption period |
| Municipal taxes | 100% exempt | Full exemption period |
| Qualifying companies | Manufacturing, assembly, processing, logistics inside CNZFE-authorized parks | From CNZFE registration date |
Full eligibility criteria, compliance requirements, and sector breakdown below.
Bottom line: Dominican Republic Law 8-90 grants manufacturers operating inside free zones 100% exemption from income tax, import duties, export taxes, VAT, and municipal taxes for 20 years, renewable. Enacted in 1990, it remains the legal foundation for DR’s export manufacturing competitiveness in 2026. This page breaks down every tax exemption, eligible sector, and compliance requirement so you can evaluate whether Law 8-90 applies to your operation.
Full Tax Exemption Breakdown
| Tax / Obligation | Exemption Under Law 8-90 | Duration |
|---|---|---|
| Corporate income tax | 100% exempt | 20 years, renewable |
| Import duties (equipment) | 100% exempt | Indefinite during zone operation |
| Import duties (raw materials) | 100% exempt | Indefinite during zone operation |
| Export taxes | 100% exempt | Indefinite |
| ITBIS (DR VAT equivalent) | 100% exempt | Indefinite |
| Municipal and local taxes | 100% exempt | Indefinite |
| Repatriation of capital and profits | 100% allowed, no restriction | Indefinite |
| Payroll tax (INFOTEP levy) | Partial, 1% on payroll applies | Ongoing |
Eligible Sectors Under Law 8-90
| Sector | Common Products |
|---|---|
| Textiles and apparel | Garments, uniforms, technical fabrics |
| Medical devices | Surgical instruments, disposables, diagnostics |
| Electronics assembly | PCBs, wiring harnesses, components |
| Tobacco | Premium cigars (La Romana, Santiago) |
| Jewelry and accessories | Gold, silver, gemstone finishing |
| Footwear | Athletic, industrial, fashion |
| Food processing (for export) | Packaged goods, beverages |
| Services (BPO, logistics) | Call centers, fulfillment, distribution |
Compliance Requirements to Maintain Exemption
| Requirement | Details |
|---|---|
| CNZFE license | Required, operator or user license, renewed annually |
| Export percentage | Must export minimum % of production (sector-dependent) |
| Annual CNZFE report | Employment, production, and export data submitted yearly |
| Physical presence in free zone | Operations must be within a CNZFE-registered park |
| Social security contributions | Applies to all DR employees regardless of zone status |
Get a company-specific Law 8-90 eligibility analysis → Start here
This analysis is part of a broader Dominican Republic manufacturing strategy. See full breakdown: Free Zones Guide | DR vs Mexico Comparison | Labor Costs | Lease Costs | Get a free analysis
| Benefit | Details |
|---|---|
| Income tax | 100% exempt (20 years, renewable) |
| Import duties | 100% exempt on equipment & raw materials |
| Export taxes | 100% exempt |
| ITBIS (VAT) | 100% exempt |
| Municipal taxes | 100% exempt |
| Repatriation of profits | 100% allowed |
| Eligible sectors | Manufacturing, services, logistics, tech |
Need a company-specific breakdown? Get a free analysis →
See also:
DR Free Zones Guide |
DR vs Mexico Comparison |
Labor Costs |
Get a free analysis
QUICK ANSWER
Dominican Republic Law 8-90 is the legal framework governing free industrial zones. It grants companies operating in DR free zones full exemption from income tax, import duties on machinery and inputs, export tariffs, sales tax on goods for export, and restrictions on capital repatriation, with no statutory time limit on the exemptions.
What Law 8-90 Exempts
Income Tax: Free zone companies pay zero corporate income tax on income generated within the free zone. This is a full elimination, not a deferral or credit. Import Duties: Machinery, equipment, raw materials, components, and spare parts imported for use in free zone production are fully exempt from customs duties. Export Tariffs: Goods produced in the free zone and exported are exempt from all export-related taxes and tariffs. ITBIS (VAT): Sales of goods produced in the free zone for export are exempt from Dominican Republic value added tax. Capital Repatriation: Profits earned in the free zone can be repatriated to the parent company without restriction.
Who Qualifies for Law 8-90 Benefits
Any company engaged in manufacturing, assembly, processing, logistics, or services for export can qualify for a free zone operating license under Law 8-90. The company must operate within an authorized free zone park, obtain a CNZFE operating license, and maintain operations that generate employment and add value in the DR.
The CNZFE Regulatory Framework
CNZFE (the National Free Zones Council) administers Law 8-90. CNZFE issues operating licenses, monitors compliance, and maintains the registry of free zone companies. Free zone companies are subject to annual reporting and must maintain their qualifying operations to preserve exempt status.
Law 8-90 and CAFTA-DR Combined Effect
The combination of Law 8-90 exemptions and CAFTA-DR duty-free U.S. access is the structural foundation of the Caribbean Corridor. A company operating in a DR free zone under Law 8-90 pays zero tax on its DR operations AND exports duty-free to the U.S. market, creating a cost structure unavailable through any other single jurisdiction in the Americas. To assess your operation’s eligibility, contact EGS.
Frequently Asked Questions
What is Dominican Republic Law 8-90?
Law 8-90 is the Dominican Republic’s primary free zone legislation. It grants 100% tax exemption on income tax, import duties, ITBIS, municipal taxes, and export taxes to companies operating within CNZFE-approved industrial free zones.
How long do Law 8-90 tax exemptions last?
Law 8-90 exemptions are granted for 20 years and are renewable. Companies that remain in compliance with CNZFE requirements and maintain active manufacturing operations retain their exemption status indefinitely through renewal.
Who qualifies for Law 8-90 benefits?
Any company operating within a CNZFE-approved free zone park qualifies, including 100% foreign-owned entities. Eligible sectors include textiles, electronics, medical devices, tobacco, and general manufacturing. Companies must maintain a signed lease within an approved park and meet CNZFE compliance requirements.
Does Law 8-90 apply to service companies or only manufacturers?
Law 8-90 primarily covers manufacturing and industrial operations. Service companies operating within free zones may qualify under separate regulations but the core exemptions under 8-90 are designed for export-oriented production activity.
Continue Your Research
Complete Guide: Manufacturing in the Dominican Republic – Everything foreign manufacturers need to know about production in DR free zones.
How to Set Up Your DR Free Zone Company – Step-by-step company formation, licensing, and compliance.
Find Out If Your Company Qualifies for Law 8-90
Law 8-90 eligibility depends on your product category, production model, and export volume. EGS reviews your operation against CNZFE requirements and maps the fastest path to your Free Zone Operating License.
→ Book a free 20-minute qualification call, confirm your Law 8-90 eligibility and get a clear setup roadmap.