DOMINICAN REPUBLIC Law and Practice Contributed by: Giselle Pérez Reyes and María Virginia Ditrén Báez, Guzmán Ariza Abogados
Finally, the country benefits from solid infrastructure, a skilled workforce, and an established track record with major multinational mining operations. A stable mac - roeconomic environment, competitive energy options and proximity to North American markets further rein - force the country’s attractiveness as a mining invest - ment destination. 5.2 Foreign Investment Restrictions and Approvals in the Exploration and Mining Sectors The Dominican Republic has an open foreign invest - ment regime, and there are no special approval requirements or restrictions for foreign participation in exploration or mining. Foreign investors may own 100% of mining compa - nies and can apply for, hold and transfer mining con - cessions under the same conditions as local investors. Foreign investment does not require prior authorisa - tion – only a simple post-registration with ProDomini - cana for statistical purposes. The main constitutional limitation applies to the purchase of real property in border zones, but this does not restrict foreign owner - ship of mining concessions, which are administrative rights rather than land. Protections for foreign investors are reinforced through national treatment guarantees, Foreign Investment Law No. 16-95, DR-CAFTA and various BITs. 5.3 International Treaties Related to Exploration and Mining The Dominican Republic is party to several multilateral and bilateral treaties that provide robust protections for foreign investment in the mining and exploration sectors. First, as a member of DR-CAFTA, the country grants investors national treatment, most-favoured-nation (MFN) treatment, protection against unlawful expro - priation, fair and equitable treatment, and access to investor–state arbitration under ICSID or UNCITRAL rules. These protections apply to mining and natural resource investments.
Second, the Dominican Republic has executed mul - tiple BITs with countries including Spain, Canada, France, Switzerland, the Netherlands, South Korea and Taiwan, among others. These BITs provide guar - antees such as non-discrimination, full protection and security, free transfer of capital, and recourse to inter - national arbitration. In addition, the Dominican Republic is a contracting state to the ICSID Convention, allowing foreign min - ing investors to bring claims directly against the State before international tribunals. Together, these treaties ensure that foreign investors in the mining and exploration sectors benefit from strong legal protections, international dispute reso - lution mechanisms and guarantees of fair treatment. 5.4 Sources of Finance for Exploration, Development and Mining Mining activities in the Dominican Republic are gener - ally financed through a combination of equity contri - butions, private investment and international capital markets, reflecting the high capital requirements and risk profile of the sector. First, equity financing from foreign parent companies remains one of the primary sources of funding, par - ticularly during the exploration phase. Exploration activities, which typically do not generate revenue and carry significant geological risk, are most com - monly supported through shareholder capital injec - tions rather than debt financing. Second, mining companies – especially junior and mid-tier operators – frequently obtain financing through private equity funds and public capital mar - kets. Third, large-scale mining projects typically rely on pro - ject finance structures, in which lending is secured primarily by the future cash flows of the project rather than by the general credit of the sponsoring company. Such structures customarily combine financing from commercial banks with participation from multilateral financial institutions.
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