It covers payment methods and information on, banking systems, foreign exchange controls, and U.S. and correspondent banking.
Methods of Payment
The following methods of payment are the most common:
- Cash (since most Dominican companies maintain dollar accounts abroad) by electronic/wire transfers.
- Supplier credit (once a trading relationship has been established).
- Documentary letters of credit including stand-by letters of credit.
- Documentary collections through the banking system.
- Commercial credit cards, however, it is recommended that U.S. firms accept these credit cards with caution because of the possibility of fraud.
The following local firm performs credit checks on Dominican companies:
Address: Ave. Abraham Lincoln No. 1019
3rd Floor, Ens. Piantini
Santo Domingo, Dom. Rep.
The Central Bank of the Dominican Republic implements monetary policy and issues the national currency (Dominican pesos, commonly abbreviated as “RD$”). The Central Bank also manages external payments.
Commercial banks represent one of the principal sources for private sector financing. Most requested loans are short and medium term, ranging from 30 to 90 days for working capital or trade financing and from 1, 3 or 5 years at the most for capital expenses. Working capital fixed-term loans require that the borrower make either periodic payments of principal and interest or a single principal balloon payment of the entire outstanding balance at maturity. These loans are reviewed on a case-by-case basis. Financing for construction or tourism projects may have longer terms typically from 7 to 10 years or more in a few cases.
Indicative current interest rates for loans in local currency are as follows:
In RD$ the preferential rates range between 7 and 18 percent.
Non-preferential rates can go as high as 23-26 percent for loans denominated in RD$.
Interest rates for the commercial/corporate sector are revised usually every 6 or 12 months.
Local commercial banks offer almost the same services that a U.S. bank offers to its clients, with the exception that there are no local checking accounts in U.S. dollars, and instead, local banks offer savings accounts in U.S. dollars.
Foreign Exchange Controls
The Monetary Board sets monetary policy and oversees Central Bank operations. It also sets banking and financial norms through resolutions.
All foreign exchange transactions operate in the private market where all sectors of the Dominican economy are free to buy and sell foreign exchange through commercial banks and exchange houses (casas de cambio). The currency has a floating exchange rate which is currently around RD$55.00 per US$1.00.
US Banks & Local Correspondent Banks
The only full-service U.S. commercial bank in the Dominican Republic is Citibank, N.A.
Address: Ave. Winston Churchill Esq. Ave. Andres Jose Aybar
Torre Citibank, Acropolis Center – 24th Floor, Ens. Piantini
Santo Domingo, Dominican Republic
Tel: 809/ 473-2404
Fax: 809/ 955-2657
Most local banks have correspondent banking relationships in the U.S.