Free zones sector forecast to get US$500 million in 2023

The Free Zone sector projects an investment of more than US$500 million and the generation of some 32,500 direct jobs by year’s end of 2023, according to data offered by the Dominican Association of Free Zones (Adozona), the Ministry of Industry & Commerce (MICM) and the National Council of Free Export Zones. The announced US$500 million are scheduled to be invested in the sector creating an additional 32,500 jobs in 2023. The announcement was made during the celebration of the 25th Conference of Free Zones of IberoAmerica, of the Association of Free Zones of the Americas (AFZA). This is the fourth time, the DR hosts the important regional event that this year took place at the Westin Punta Cana Resort & Club from 1-2 December 2022.

President Luis Abinader gave the welcoming remarks, highlighting the stellar performance of the free zone sector and its contributions to the national economy. The sector has been growing in generation of jobs, exports, number of companies, total investment and local purchases and in training of staff.

Industry & Commerce Minister Victor (Ito) Bisonó stressed the free zone sector operations are 100% formal, with close to 192,000 jobs by the end of October 2022. “And I must add that these are not only more jobs, but jobs that require considerable technical or professional skills. He highlighted that women make up 50% of the free zone workforce.

From January to October 2022, exports from free zones reached US$6.53 billion, 10% more than the previous year. The Dominican Republic free zones are a global leader in cigars and machine-manufactured cigarettes, with 36% of exports. At a regional level, the country is a leader in the categories of medical devices, electrical, textile and footwear.

For his part, the president of Adozona, Luis José Bonilla Bojos said that the free trade zones are deeply rooted in the country, with more than half a century of history, generating direct jobs, professionalizing the Dominican labor force and promoting productive linkages and the growth of exports.

“Overall, the sector’s value chains and their impact generate 379,900 jobs for our economy, for a multiplier of 2.19 with respect to direct employment. In other words, for every 100 direct jobs, 119 jobs are generated in other productive sectors,” said Bonilla Bojos.

The executive director of the CNZFE, Daniel Liranzo stressed that the free zones have the highest incidence in the total exports of the Dominican Republic. Free zone exports are 60% of the total exports of goods of the country.

“In 2021 alone, exports of goods from free zones surpassed the US$7 billion threshold, with a growth of 22% compared to 2020. And if we take into account exports of services, total exports rose to US$8.88 billion, that is 43% of exports of goods and services (including tourism),” Liranzo pointed out.

The increase in local purchases was another major topic addressed at the conference. Last year alone, these purchases were more than RD$110 billion and by the end of September 2022 they have already reached RD$104.19 billion.

While the free trade zones represented 3.6% of the GDP in 2021 directly, when taking into account the impact of their purchases and the demand generated by the chain’s employees, the total impact on the GDP increases to 7.6%.

The country currently has 84 free zone parks, most managed by the private sector or under a public-private modality. These parks are home to 778 companies with a total accumulated investment to 2021 amounting to US$5.90 billion, most US investment.

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Ministry of Industry & Commerce

5 December 2022