CONFOTUR Regime and Tourism Promotion

1. What counts as an eligible tourism project?

Law 158-01, as amended, defines a broad menu of eligible project types: hotels and resorts, eco-tourism, theme parks, tourism port infrastructure (marinas), small and medium tourism enterprises, restaurants in qualified zones, hospital infrastructure oriented to medical tourism and, in general, investments that expand the country's tourism offer. Qualification distinguishes new projects from extensions of existing ones.

2. Zones of application

The regime originally applied to pre-defined poles. Law 195-13 significantly expanded territorial coverage, including most of the country under specific conditions. Application to a specific site requires verifying zone qualification and, for coastal or protected areas, coordinating with environmental rules.

3. Benefits package

For a qualified project, typical benefits include:

• Income tax: exemption for the benefit period (up to fifteen years) on revenues attributable to the qualified operation.
• VAT and tariffs: exemption on equipment imports, construction materials, furniture and machinery required to build, equip and start up.
• Real-estate transfer: exemption on the first transfer of property destined to the project.
• Municipal taxes: favorable treatment as negotiated with the relevant municipality within the general framework.

Benefits apply only to the qualified activity and the approved period. Operations outside the project are taxed ordinarily.

4. Application process

The typical procedure involves:

1. Submission to CONFOTUR with technical, financial and environmental documentation.
2. Evaluation by CONFOTUR's technical secretariat (Ministry of Tourism), with input from complementary institutions where applicable.
3. CONFOTUR resolution granting, conditioning or denying qualification.
4. Project registration and effective application of exemptions through DGII and Customs.
5. Compliance with execution schedule and periodic reports during benefit term.

5. Practical application cases

The regime is widely used in hotel and coastal lifestyle projects. Key items requiring care: (a) clear delimitation of the qualified project versus non-qualified related activities, (b) traceability of exempted imports through to project incorporation, (c) articulation with environmental licensing and municipal permits, and (d) schedule compliance — the leading cause of revocation in practice.

6. Upcoming reforms and debates

Recurring public discussions cover additional extensions, differentiations by tourism type (sustainable, community, medical), articulation with a potential new general fiscal framework, and tightening of environmental requirements. For investment decisions beyond five years, assume that the general regime continues but that ancillary requirements (environmental, ESG, labor) will tighten.