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The Dominican Republic's economy grew by an impressive 7.5% in 2010, driven primarily by the construction and the telecom industries....

The Dominican Republic's economy grew by an impressive 7.5% in 2010, driven primarily by the construction and the telecom industries. Tourism, the economy's most important sector, increased by 3.1% that year, affirming the country's position as the Caribbean's top tourist destination. The Dominican Republic also continued to be the Caribbean favourite for foreign investors, receiving 37% of the $5.8 billion invested in the region in 2009 and 2010.

Despite these positive statistics, attorneys report that a new cost-consciousness has come into play in the legal market. One partner observes: "Efficiency is one word out there affecting everybody - how deals are structured, new fees, new ways of addressing things. The good old days aren't coming back. We have to learn to live in the new environment."

That new environment is full of change, reflected by a new constitution which came into effect in January 2010 and a raft of legislation that has been passed or is pending, much of it designed to appeal to foreign investors and/or align the country with recommendations made by members of the World Bank.

In June 2011, Congress approved a new tax package that will replace revenue lost to the Dominican Republic through the implementation of the Central American Free Trade Agreement-Dominican Republic. The changes will include an increase from 25% to 29% for corporations and an additional 1% tax on corporate assets. Opponents say the increases will deter foreign investment.

Other important legislative changes include amendments to the country's Monetary and Financial Law, which are expected to pass this year and seek to modernise the legal sector by implementing internationally-accepted best practices.

Also relevant is The Law on Commercial Entities and Individual Enterprises, which was passed in 2008 but gave companies until December 2010 to become compliant by changing their bylaws or corporate status. The law will modernise local corporate legislation, making new corporate structures available to small- and medium-sized companies, and for the first time regulating processes such as M&A and consolidations.

The Law for the Development of the Mortgage Market and Trusts is also being implemented, introducing the use of trusts to create vehicles that will facilitate funding for the construction of low-income housing.

Other important legislation includes the Law for the Development of Renewable Energy Sources, which will provide government incentives for the use of renewable energy, bio-fuel, bio-diesel and ethanol over hydrocarbons.

Financing related to the Barrick Gold Mine in Pueblo Viejo, located northeast of the country's capital Santo Domingo, has been particularly active. First worked by the Spaniards in the 1500s, the mine was shut from 1999 to 2007, when it was reopened by the largest mining company in the world, the Canadian-based multinational Barrick Gold. At the time of writing, the $3 billion construction on the mine is still underway, with operations slated to begin in September 2011.