SANTO DOMINGO– Despite the highly favorable investment climate in the country, legal security for investors to feel that their capital is protected remains one of the local obstacles, according to Santiago Sicard, executive president of the Dominican Republic Investment Funds Association.
Speaking at the plenary session on the rental law during the 8th National Housing Roundtable, the professional stated that the country has a number of viable conditions for attracting investment. “Any investor wants to take these steps: opportunity, security, long-term viability (meaning they can reinvest), sustainability, a positive impact on society, a business that can grow not only locally but also regionally, and of course, profitability,” he explained.
In his opinion, all of the above is present in Dominican Republic housing. “We only have one area where we fall short: legal security, especially so that investors feel secure knowing that, even if they aren't seeking the highest return, as is the case today with many investment funds worldwide, which aim not only to generate high returns but especially to have a real impact on society, they need the assurance that their capital—let's not talk about interest, profitability, or merit—will be reasonably safe.”.
Sicard understands that, given the reality of the "tight" budgets that countries like ours manage, international capital represents an alternative to alleviate the deficits.
In that context, he believes that having a renewed rental law would be excellent news for the Dominican Republic. “Tenant protection is always necessary, and the goal is for tenants to be increasingly protected, but we cannot allow the innocent to pay for the guilty. What do I mean by that? In the investment equation, risk is always tied to profitability, and higher profitability translates into lower financing rates and lower rents.”.
The expert understands that “if we have greater legal certainty and less risk, capital will be able to finance not only builders but also buyers at much lower rates, and secondly, lower rental costs. You don't have to own the property, you don't have to be an owner, you just have to have access to capital,” he explained.
He explained that nowadays there are long-term rental schemes in the world and that all that is needed is a good rental law that protects the compliant tenant and penalizes the non-compliant one.
He added that with the transformations and the volume that investments bring, urban development can be achieved that allows the population to have parks, avenues, aqueducts, sewers and communication routes.
“And that is a task that we cannot leave solely to the government; the government is doing very well, but we as the private sector have a responsibility. The country is ours, so we have to act accordingly.”.
Investment funds
Sicard highlighted the importance of investment funds because they allow for larger volumes of capital, bring structure and networks, which, when invested, help to make financing much less expensive due to lower risk.
He added that "they contribute strategic plans because they do this frequently, so they have a network of people, entities, and counterparts that allows the efficiencies you already manage to be optimized and maximized.".
“Third, the investment fund wants the projects to be successful, so it not only contributes financially, politically, and socially, but also helps position its brand and the specific project. Furthermore, if it receives capital from small investors, they will champion that project, want to invest in it, and want to recommend it. Finally, investment funds seek profit for their investors, from those who invest 10,000 pesos to those who invest 500,000 or 2 billion pesos.”.
