Countries › Dominican Republic › Guide › 3. Investing › Investor protections in the Dominican Republic: expropriation, confiscation limits and what the law guarantees

Investor protections in the Dominican Republic: expropriation, confiscation limits and what the law guarantees

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Last verified: 2026-10-30 · Status: Stable

Property can only be taken for public utility or social interest, with fair value paid in advance, set by agreement or by a court. Confiscation needs a final judgment and is limited to listed illicit sources. There is no separate legal stability contract for foreign investors, and the Constitution bars retroactive laws.

USD figures use the Banco Central de la República Dominicana reference selling rate of RD$60.9007 per US dollar for 29 October 2026, the latest row in its published rate file on the verification date, rounded to the cent.

Key facts

Compensation on expropriation	Fair value, paid in advance, by agreement or court Constitución art. 51 num. 1, as of 2026-10-30 · in force
General legal stability contract for foreign investors	None found in Ley 16-95 or Ley 98-03 Ley 16-95, as of 2026-10-30 · in force
Performance requirements under Ley 16-95	None set in the law Ley 16-95, as of 2026-10-30 · in force

The rule

1. The State recognizes and guarantees property, which has a social function. No one may be deprived of property except for justified public utility or social interest, with prior payment of its fair value, set by agreement or by a competent court. In a declared state of emergency or defence, the compensation may not be prior.Constitución de 2024, art. 51 and num. 1, 2024-10-27 official text · verified 2026-10-30

2. There will be no confiscation for political reasons.Constitución de 2024, art. 51 num. 4, 2024-10-27 official text · verified 2026-10-30

3. Only by final judgment can goods be confiscated or forfeited, if they derive from illicit acts against public property, or are used in or come from drug trafficking, organized transnational crime or any offence in the criminal laws. This applies to national and foreign persons.Constitución de 2024, art. 51 num. 5, 2024-10-27 official text · verified 2026-10-30

4. Remittance of capital, declared dividends and realized gains needs no prior authorization, after income tax.Ley 16-95 sobre Inversión Extranjera, art. 7, 1995-11-20 official text · verified 2026-10-30

5. Law applies only to the future. In no case may public authorities or the law affect or alter legal certainty arising from situations established under earlier legislation.Constitución de 2024, art. 110, 2024-10-27 official text · verified 2026-10-30

6. Rules in ratified treaties apply internally once officially published.Constitución de 2024, art. 26 num. 2, 2024-10-27 official text · verified 2026-10-30

7. For DR-CAFTA investors, expropriation must be for a public purpose, non discriminatory, with due process and on prompt, adequate and effective compensation at fair market value immediately before the taking, paid without delay and freely transferable, plus interest at a commercially reasonable rate.DR-CAFTA, Chapter Ten, art. 10.7, 2004-08-05 official text · verified 2026-10-30

8. State contracts can send disputes to treaty based jurisdictions and to national or international arbitration under law, with foreign persons domiciled in the country otherwise under Dominican law and courts.Constitución de 2024, art. 220, 2024-10-27 official text · verified 2026-10-30

9. Incentive laws can carry their own stability promise. Ley 158-01 bars new taxes, charges and fees during the exemption period, and Decreto 372-14 repeats that no new charges apply to a classified project.Ley 158-01 art. 5; Decreto 372-14, art. 5; art. 13 paragraph III, 2014-10-09 official text · verified 2026-10-30

Point	Constitution	DR-CAFTA
Purpose	Public utility or social interest	Public purpose, non discriminatory
Value	Fair value	Fair market value before the taking
Timing	Prior, save emergency or defence	Without delay
Interest	Not addressed	Commercially reasonable rate
Remedy	Agreement or competent court	Local courts or Section B arbitration

Domestic and DR-CAFTA expropriation tests

Worked example

A plant worth RD$121,801,400 (US$2,000,000.00) is declared of public utility for a road. The owner negotiates a price and, failing agreement, goes to the competent court. Absent a declared emergency, payment comes before the State takes possession. A United States investor with a covered investment can also rely on art. 10.7 and its fair market value standard.

Step by step

Keep the investment registered, so the investor status and the remittance guarantee are clear.
Keep a current independent valuation of key assets.
On notice of a taking, contest value and timing at once, with counsel on both domestic and treaty routes.
For a treaty claim, send the notice of intent early; see disputes/investment-arbitration.

Common traps

The prior payment rule falls away in a declared state of emergency or defence.
No statute reviewed here gives a tax stability contract, so a tax change applies unless an incentive law says otherwise.
The arbitration clause matters. Without one, disputes with the State stay in Dominican courts for foreign persons domiciled in the country.
The Decreto 372-14 paragraph is regulation; its strength against a later law is untested in this guide.

Sources

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