I am trying to take a bunch of high-paying American production jobs and turn them into "high-paying" Dominican jobs in a free-trade zone and then ship the product back here to the US. The products are ornamental art designs, the market is already established in the US and elsewhere, and I'm not going to try to sell a thing to anybody in the DR. In fact, I only picked the DR because of the combination of cheap labor and tax-free trade-zone deal. It's also a plus that board meetings can be held on a tropical island without any fear of having the expenses denied by the IRS... and various corporate officers can manage a Caribbean vacation a couple of times a year and have the company pay for it.
PRIOR to catching a plane to the DR (I HATE flying) I want to have as many questions answered as possible. I could hire a consultant, but I'd rather get the information from a "peer reviewed" location such as this one. I really appreciate the propensity of certain members of this forum to say "Hey! So-and-So is full of shit! It doesn't work that way at all!" It took me quite a while to get used to people like CRISCO, but I've come to appreciate the effect such accountability has. Also, there are people who post here that I'd never have an opportunity to communicate with otherwise.
I can't find much information on the Free-Trade Zones on this board. If the archives have something, please let me know what terms to use for searching and I'll go back to reading.
As to specifics, I have read with interest the people who have talked about the labor laws and their chilling effect on hiring employees. What about paying piece-work? I really hate to pay by the hour, and always prefer to tie the pay directly to the performance, so naturally I like piece-work. I've also found that if I can set the pay scale to allow an experienced and hard worker to make 150% of the average wage for that locale, then there is always enough competition for the jobs to lessen the problems with finding workers. An added plus is that they give themselves their own raises for experience and longevity, right up to the point that those things cease to contribute to productivity.
Piece-work is a variable rate of pay. If a worker developed an attitude and stopped working hard, their pay would fall. If I had to fire them, would their liquidation be based on an average pay, their ending rate of pay, or maybe some kind of government formula? And, if they are fired for cause, do I still have to pay liquidation?
Just how hard is it to get a license for operation in one of these free-zones, and what will it really cost? In fact, where *are* these free zones? I'd love to see a map of the country with all the free zones marked on it. I guess I'm dreaming, though. I'll have to deal with whatever I can near the cheapest point of departure for cargo containers, because the downside of shipping jobs down to the DR is that I have to ship product back to the US.
Speaking of shipping, I have to send 40 ft. containers to various points around the US. Who can I talk to to get some realistic shipping rates that will be close enough to "ball park" for planning purposes? What companies would be worth working with, and is there anybody I should avoid?
I have read that I can bring production equipment (Lathes, grinders, welders, presses, tooling, etc.) into the country duty-free for the purpose of setting up a business. Is that just bathroom reading? I know the customs guys are corrupt... but am I going to have my production equipment sitting in a container until I pay the ransom- even if the law says that I don't have to? If it's likely, then who is the best person to bribe?
Probably most important of all, how long does the process of transferring a small production line down to the DR actually take? It will take me a week to set up presses and machines, but what about the bureaucracy end of things? Does the license and permit process take days, weeks, months or years? I'm reminded of an experience I had in Southern California years ago. Some problems we dealt with the local police, and some problems we dealt with the local gang... just a matter of knowing who handled what and how to do business. Who handles what in the DR?
Once I get set up and producing, other than labor problems, what should I be concerned with? I know that there'll be problems, there always are. There is always a "gotcha" somewhere in there, and I'm wondering what it might be. I have been reading some of Golo's posts with extreme interest. I was in the Philipines in 1986 when Marcos fell.... that was a real experience for this white boy, and I don't look forward to seeing it happen again.
I have lots of questions, but those are the major ones right now. I'd have to move down to the DR to manage the operation, but I'd bring my family with me. Yes, I speak Spanish, OK to get by, but I have a native Spanish speaking wife. I've been in lots of third world places and dealt with the "manyana" culture for years, in Mexico, the PI and on Guam. This is one time when I'm more worried about the larger unknown than the minor stuff.
PRIOR to catching a plane to the DR (I HATE flying) I want to have as many questions answered as possible. I could hire a consultant, but I'd rather get the information from a "peer reviewed" location such as this one. I really appreciate the propensity of certain members of this forum to say "Hey! So-and-So is full of shit! It doesn't work that way at all!" It took me quite a while to get used to people like CRISCO, but I've come to appreciate the effect such accountability has. Also, there are people who post here that I'd never have an opportunity to communicate with otherwise.
I can't find much information on the Free-Trade Zones on this board. If the archives have something, please let me know what terms to use for searching and I'll go back to reading.
As to specifics, I have read with interest the people who have talked about the labor laws and their chilling effect on hiring employees. What about paying piece-work? I really hate to pay by the hour, and always prefer to tie the pay directly to the performance, so naturally I like piece-work. I've also found that if I can set the pay scale to allow an experienced and hard worker to make 150% of the average wage for that locale, then there is always enough competition for the jobs to lessen the problems with finding workers. An added plus is that they give themselves their own raises for experience and longevity, right up to the point that those things cease to contribute to productivity.
Piece-work is a variable rate of pay. If a worker developed an attitude and stopped working hard, their pay would fall. If I had to fire them, would their liquidation be based on an average pay, their ending rate of pay, or maybe some kind of government formula? And, if they are fired for cause, do I still have to pay liquidation?
Just how hard is it to get a license for operation in one of these free-zones, and what will it really cost? In fact, where *are* these free zones? I'd love to see a map of the country with all the free zones marked on it. I guess I'm dreaming, though. I'll have to deal with whatever I can near the cheapest point of departure for cargo containers, because the downside of shipping jobs down to the DR is that I have to ship product back to the US.
Speaking of shipping, I have to send 40 ft. containers to various points around the US. Who can I talk to to get some realistic shipping rates that will be close enough to "ball park" for planning purposes? What companies would be worth working with, and is there anybody I should avoid?
I have read that I can bring production equipment (Lathes, grinders, welders, presses, tooling, etc.) into the country duty-free for the purpose of setting up a business. Is that just bathroom reading? I know the customs guys are corrupt... but am I going to have my production equipment sitting in a container until I pay the ransom- even if the law says that I don't have to? If it's likely, then who is the best person to bribe?
Probably most important of all, how long does the process of transferring a small production line down to the DR actually take? It will take me a week to set up presses and machines, but what about the bureaucracy end of things? Does the license and permit process take days, weeks, months or years? I'm reminded of an experience I had in Southern California years ago. Some problems we dealt with the local police, and some problems we dealt with the local gang... just a matter of knowing who handled what and how to do business. Who handles what in the DR?
Once I get set up and producing, other than labor problems, what should I be concerned with? I know that there'll be problems, there always are. There is always a "gotcha" somewhere in there, and I'm wondering what it might be. I have been reading some of Golo's posts with extreme interest. I was in the Philipines in 1986 when Marcos fell.... that was a real experience for this white boy, and I don't look forward to seeing it happen again.
I have lots of questions, but those are the major ones right now. I'd have to move down to the DR to manage the operation, but I'd bring my family with me. Yes, I speak Spanish, OK to get by, but I have a native Spanish speaking wife. I've been in lots of third world places and dealt with the "manyana" culture for years, in Mexico, the PI and on Guam. This is one time when I'm more worried about the larger unknown than the minor stuff.