He reported that they are currently in the process of modifying Law 189-11, where important and necessary changes regarding the trust figure are foreseen.
Taken from Diario Libre
SANTO DOMINGO – In the Dominican Republic, there are over RD$160 billion in assets managed through trusts, according to statements by Christian Molina, executive president of the Dominican Association of Trust Companies (Asofidom). These resources are distributed among more than 900 trusts nationwide.
“The trust’s main focus has been on real estate trusts, specifically housing development. In that regard, 40,000 homes have been delivered to various families, nine out of ten of which are low-income families and are low-cost housing,” explained the Asofidom executive.
He reported that they are currently in the process of modifying Law 189-11, where important and necessary changes regarding the trust figure are foreseen.
“The first is fiscal transparency, fiscal neutrality, and being fiscally neutral means not only eliminating an exemption that exists in the trust, which is 27% of taxes, but also modeling the tax burden of the trust at a general level,” Molina pointed out in the framework of the activity “The first decade of the trust in the Dominican Republic.”.
He asserted that if the Dominican Republic wants to continue seeing progress in housing and public offering trusts, the government must continue to incentivize the housing construction and value market sectors.
Regarding public-private partnerships (PPPs) in the country, Molina said that the trust structure is the only way to develop PPPs because it can mitigate the risks associated with a PPP, protect the interests of the State as an interested party in the outcome of that PPP, but, above all, facilitate access to financing for the PPP.
“Who are the investors in the PPPs? They are pension funds and institutional investors. The only way for them to invest is through a public offering of securities, which would be done through the trust. In other words, it is the only way to save the PPPs,” he pointed out.
Regarding the regulatory issue, Molina explained that Asofidom understands that the Superintendency of Banks is the ideal regulator for the sector because it has experience as a regulator of financial entities such as trust companies, not three as is currently the case.
He added that the DGII has experience in tax collection and the Securities Market Superintendency would continue to regulate trusts, but only those that are publicly offered securities and not in general.
