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CONFOTUR: How the Dominican Republic’s Tourism Development Council Boosts Real Estate Investment
As the Dominican Republic continues to position itself as a top destination for international tourism, the government has introduced a range of incentives aimed at boosting foreign investment in tourism infrastructure. The Consejo de Fomento Turístico (CONFOTUR), or Tourism Development Council, plays a central role in these efforts, providing tax breaks and other advantages for investors who develop tourism-related properties. For U.S. investors interested in the Dominican market, understanding CONFOTUR’s incentives is key to maximizing investment returns.

1. What is CONFOTUR?

Established by the Dominican government, CONFOTUR is a program designed to encourage development within the tourism sector by offering substantial fiscal incentives to both local and foreign investors. Through CONFOTUR, qualifying projects in tourism zones, including hotels, resorts, villas, and vacation rentals, are eligible for a series of tax exemptions and legal benefits.

Core Objective: CONFOTUR’s main goal is to increase tourism capacity, attract high-value travelers, and enhance the country’s tourism infrastructure, particularly in areas with high potential for economic development (source).

2. Key Incentives for Investors

CONFOTUR offers several financial incentives that reduce overall investment costs, making the Dominican Republic one of the most attractive destinations for tourism-related real estate investments in the Caribbean. Some of the primary benefits include:

  • Exemption from Transfer Tax: Properties under CONFOTUR are exempt from the standard 3% transfer tax applied to property transactions. This exemption significantly reduces upfront costs for investors entering the market.
  • Property Tax Exemption: CONFOTUR properties are also exempt from the 1% annual property tax for up to 15 years, lowering long-term costs for property owners and providing a clear advantage over non-qualifying properties (source).
  • Exemption from Capital Gains Tax: Investors are not subject to capital gains tax upon selling CONFOTUR-registered properties, allowing them to retain more profit from asset appreciation. This exemption can lead to substantial savings, especially in high-growth tourism zones.

3. Qualifying Criteria for CONFOTUR

To qualify for CONFOTUR’s benefits, projects must meet specific criteria and undergo an application process through the Ministry of Tourism. Generally, the project must contribute to the tourism sector, either by creating lodging facilities, vacation rentals, or attractions in designated tourism zones.

  • Tourism Zone Requirements: CONFOTUR primarily applies to projects in designated tourism areas such as Punta Cana, La Romana, Samana, and Puerto Plata. The government continuously updates tourism zones based on economic potential, giving investors diverse location options.
  • Project Scope: Eligible projects include a wide range of real estate developments, from large hotel chains to smaller boutique hotels, as well as ecotourism and luxury villa projects. Approval depends on the project’s impact on tourism infrastructure and employment (source).

Application Insight: Engaging a legal advisor with experience in tourism and real estate law can improve the application’s success, ensuring compliance with regulatory requirements and expediting approval.

4. Application Process: Navigating CONFOTUR’s Requirements

The CONFOTUR application process involves submitting a detailed project plan, which outlines the project’s location, anticipated economic impact, and alignment with tourism goals. The approval process typically takes between 6 to 12 months, depending on project complexity and government processing times.

  • Required Documentation: Investors must submit financial statements, land ownership proof, and architectural plans. Once reviewed, the Ministry of Tourism grants approval if the project aligns with CONFOTUR objectives.
  • Permit Acquisition: Following CONFOTUR approval, investors must secure additional permits, such as environmental and construction permits, before breaking ground. These permits ensure that the project meets national safety and environmental standards (source).

Pro Tip: Investors should allocate adequate time and resources for the application and permit acquisition phases, as thorough preparation can minimize delays.

5. Maximizing Returns on CONFOTUR Projects

Projects under CONFOTUR enjoy cost advantages that enhance profit margins and attract international clientele. By leveraging these tax exemptions and incentives, investors can increase their ROI, particularly in high-demand tourism zones where rental yields and property values continue to rise.

  • Boosting Occupancy Rates: Properties located in CONFOTUR-approved tourism zones often achieve high occupancy rates due to increased visibility and government support for tourism promotion. Short-term rental properties, particularly in popular areas like Punta Cana, regularly reach occupancy rates of 70–85% during peak seasons.
  • Property Appreciation: CONFOTUR incentives also attract long-term investors interested in capital appreciation. With continuous development in tourism infrastructure, property values in designated zones are projected to appreciate at annual rates of 5-8% (source).

6. Conclusion: Strategic Benefits of CONFOTUR for U.S. Investors

For U.S. investors seeking profitable real estate opportunities, the Dominican Republic’s CONFOTUR program presents a unique combination of fiscal incentives and market growth potential. By lowering initial and ongoing costs through tax exemptions, CONFOTUR allows investors to focus on property development and management while maximizing their returns. With its investor-friendly framework, the Dominican Republic remains one of the Caribbean’s most appealing options for tourism-based real estate investment.
In Summary: CONFOTUR creates a pro-investment environment that encourages tourism infrastructure development and provides U.S. investors with substantial tax benefits, ensuring that the Dominican Republic remains a competitive, growth-oriented destination in the Caribbean market.
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