In previous articles, we analyzed the differences between financial investments and real estate investments. This time, we want to focus on the attractiveness of real estate investments. invest in emerging countries, especially in contexts of high global economic and political uncertainty.
We will take as main reference Dominican Republic, a country that is consolidating itself as one of the region's most promising investment destinations.
Why invest in emerging countries?
In a context where many governments are adopting aggressive fiscal policies and the economic environment is showing signs of instability, more and more investors are seeking to protect and diversify their assets by moving part of their resources abroad. The real estate sector from emerging countries, driven by the growth of and the arrival of new residents, offers an excellent combination of profitability, growth and opportunityHowever, it is essential to consider factors to anticipate the country's future, including: country risk.
What is country risk?
El risk country measures the economic and political stability of a nation. In financial markets, it is commonly expressed as the premium that a country pays compared to U.S. Treasury bonds. A reference instrument to measure it is the EMBI index (Emerging Markets Bond Index), developed by JP Morgan in the 90s, which allows for comparing risk across different countries. The greater the spread, the greater the perceived risk for investors, and vice versa.
Venezuela stands out with the highest country risk in the region, registering 17,086 points, reflecting a perception of very high economic and political instability on the part of international markets.
A country that draws attention for its evolution and growth in the last three years is
Dominican RepublicWith a tourism growth rate of approximately 10% annually, economic policies that promote foreign investment, and economic stability and a legal framework that protect investments, it has established itself as one of the region's strongest economies.
In the first half of 2025, the number of visitors exceeded 6 million, reflecting the strength of the tourism sector.
Dominican Republic: stability, growth and opportunity.
In the context of Latin America and the Caribbean, Dominican Republic stands out for its low level of country risk, with solo 200 points by May 2025, the lowest in its environment, compared to the 530 points recorded in 2022This places it below tourism competitors such as Mexico, Colombia, Costa Rica, Brazil, and Panama.
This solid performance has led to agencies such as Fitch Ratings grant the country a positive perspective in its risk rating, being the only one in Central America with that projection.
Main strengths of the Dominican economy:
- Economic growth: In 2024, the country led the region with a growth of 5%, far exceeding the average for the South American region.
- Controlled inflation: With an interannual index of 35%, within the Central Bank's target range (4.0% ± 1.0%).
- Solid employment: The unemployment rate was at a low 8%, more than 5 million people employed.
- Expanding GDP: Reached the 124,500 milliona GDP per capita approximately $11,500.
- Foreign Direct Investment (FDI): Exceeded the 4,000 million annually in the last three years, projecting to reach 4,700 million by the end of 2025.
In addition, the country has consolidated three key pillars of its balance of payments:
- Remittances: More of 10,756 million in 2024.
- Tourism: Contribution of 10,975 million coming from 2 million visitors.
- Exports: They reached the 12,925 million, 7% more than in 2023.
The set of these activities has generated income greater than 43,000 million, reflecting a diversified and resilient economy.
Future perspectives
By 2025, projections point to a growth of 4.5%, maintaining the regional advantage even in an uncertain global context. In addition, the Dominican financial system it keeps solid and well capitalized, with no signs of significant macroeconomic risks, according to the Central Bank.
Key opportunities are also opening up in sectors such as nearshoring, (business relocation), the export diversification and tourism and real estate infrastructure, where a greater attraction of foreign capital is expected and as we commented in a previous article, Golden Age, a retirement population exceeding 28 million people over the next five years.
Key considerations when investing
While the environment is favorable, it is essential to consider the following factors before investing:
- Political and economic stability: Assess institutional strength, currency confidence, and growth prospects.
- Legal security: Verify the transparency of the legal system and the protection of property rights.
- Tax system: Analyze tax regimes, double taxation treaties and tax burdens.
- Local regulations: Know the laws related to foreign investment, real estate ownership, and specific requirements.
- Market risks and opportunities: Evaluate the sector's appreciation potential, demand, and volatility.
- Associated costs: Take into account commissions, taxes, procedures and expenses
Investing in the real estate sector of emerging countries like the Dominican Republic not only allows you to diversify your assets and access higher returns than many Western economies, but also offers attractive tax advantages and immigration facilities.
for foreign investors. All of this is framed within a clear legal framework, with a solid banking system and notable economic and political stability.
The Dominican Republic is positioned as a rapidly expanding destination, with solid macroeconomic fundamentals and a growing appeal for international investment.
