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This year Dominican lawyers report an increasing number of new firms in the market, with one noting: "New firms are being born out of the recomposition of the market." The clearest examples being DR&R Abogados y Consultores Fiscales, set up by two former Pellerano & Herrera partners Norman De Castro and Luis Rivas and Bobadilla Abogados, formerly known as Grisolía & Bobadilla....

This year Dominican lawyers report an increasing number of new firms in the market, with one noting: "New firms are being born out of the recomposition of the market." The clearest examples being DR&R Abogados y Consultores Fiscales, set up by two former Pellerano & Herrera partners Norman De Castro and Luis Rivas and Bobadilla Abogados, formerly known as Grisolía & Bobadilla.

In July 2011, the Law on Mortgage Market Development and Trusts was enacted. As the first law in the country on trusts, this piece of legislation established trusts as a legal instrument. In addition, by providing tax incentives and exemptions, the law promotes private sector participation in low-cost housing projects. With corresponding regulations being issued, it is expected that the law will facilitate the development of the real estate market in the country.

One piece of legislation still in the pipeline is the new restructuring and insolvency law. "Obsolete" and "not applicable" is how one partner describes the current law, illustrating the urgent need to have a new one in place. Although the new law is still pending congressional approval, lawyers expect it to be passed as early as 2012.

CONTEXT AND TRENDS In May 2012, ruling party candidate Danilo Medina won the presidential election in the Dominican Republic. Although there was a slow-down in economic activity prior to the result, lawyers agree that the outcome has given "some peace of mind to a lot of people," considering the new president is "the previous president's wing man" and that the "same economic lines are going to be followed by the new government"....

In May 2012, ruling party candidate Danilo Medina won the presidential election in the Dominican Republic. Although there was a slow-down in economic activity prior to the result, lawyers agree that the outcome has given "some peace of mind to a lot of people," considering the new president is "the previous president's wing man" and that the "same economic lines are going to be followed by the new government". "The level of uncertainty is dispelled," one partner notes, with another adding that: "We're already seeing a revival of activities."

As one of the main contributors to Dominican Republic's GDP, tourism continues to drive the country's economic growth. "In general, activity in the tourism sector is picking up and improving," one partner says. The first quarter in 2012 recorded an all-time high in visitor growth with a 9% increase compared with the same period in 2011, according to the country's minister of tourism. In addition, there have been several new resort openings over the past year, with more in the pipeline in the near future. Following the opening of Hard Rock Hotel & Casino Punta Cana in 2011, a Four Points by Sheraton Punta Cana Village Hotel will operate in October 2012, along with a Westin Punta Cana Resort scheduled to open in late 2013. Besides, in April 2012, luxury hotel brand JW Marriott Hotels & Resorts also announced its plan to open a hotel in Santo Domingo, the capital of the Dominican Republic, in 2014.

The real estate market is also picking up, although slowly. "Commercial real estate prices are truly through the roof," one partner notes. Construction in terms of public infrastructure has always been active since the previous government decided to push economic growth by spending in this sector and the new government is likely to continue promoting the construction of low-cost housing. Meanwhile, construction in the private sector, which has been affected by the economic crisis when financing became more expensive, is starting to recover. Starting in 2012, construction that went on during the financial crisis is selling well and other projects that have paused during the economic downturn have now been resumed. In addition, fleeing capital from Venezuela has also helped to boost the revival in the private sector as the money was invested in big commercial centres in the Dominican Republic.

On the financing side, multilateral banks are playing an increasingly important role in the country. "Multilateral banks like the Inter-American Development Bank and The European Investment Bank took the place of international commercial banks and financed the major projects," one partner says. "Over the last two years, many projects were financed by those banks."

In the M&A sector, lawyers report a mixed picture. One notes that there have not been many substantial transactions despite some entities moving toward consolidation in the financial sector. Another says that with foreign firms acquiring local ones, the M&A sector has been doing well.

The high level of public debt and bureaucracy are two issues raised by lawyers. "It is frustrating for foreign investors to issue the same files to different departments to get one permit," one partner remarks. Although several administrations have been talking about creating one single window for investors, it has not been realised yet. "It is a great opportunity for the new president to do this," the partner adds.

MAJOR LATERAL HIRES

Luis Rivas
From: Pellerano & Herrera
To: DR&R Abogados y Consultores Fiscales

Norman De Castro
From: Pellerano & Herrera
To: DR&R Abogados y Consultores Fiscales

MAJOR LEGISLATION CHANGES

Law on Mortgage Market Development and Trusts
In effect as of July 2011