Dominican Republic's New Financial Law Makes It Easier For U.S. Banks To Enter Dominican Banking Market

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Dominican Republic's New Financial Law Makes It Easier For U.S. Banks To Enter Dominican Banking Market

U.S. banks seeking to expand overseas may be more likely to turn to the Caribbean country of the Dominican Republic, now that it has passed a new banking law.

Located on an island in the Caribbean, the Dominican Republic is a growing destination for U.S. businesses seeking to establish or expand overseas operations. An economically and politically stable country organized as a representative democratic government, the Dominican Republic is the Caribbean's largest democratic country. The Dominican Republic inflation rate is lower, and its growth rate is significantly higher, than other Central and Latin American states. As a result, the Dominican Republic is likely to continue receiving an even greater amount of U.S. -- and international -- investments for the remainder of this decade. Registered foreign investment in the Dominican Republic during 2001 exceeded US$1,200 million -- 25 percent more than in 2000.

Indeed, a recent report by the International Monetary Fund pointed out that "[a]fter suffering a decade of economic stagnation in the 1980s, the Dominican Republic took off in the second half of the 1990s and, with output growing at nearly 8 percent a year, became one of the world's fastest growing economies." In the IMF's view, the Dominican Republic "is a textbook case of a small economy with limited natural resources that, by opening itself to trade and financial flows, has been able to turn its economy around."

Reasons For Growth

There are many reasons for this incredible growth. The count...

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