Investment In Dr

[afraile]

I am about to invest in DR and I have 2 choices:

- To invest a high amount in a foreign franchise or
- To invest a smaller amount in a communication business (selling of phone lines, cellulars and accesories).

Due to the highly unstable economic situation, with the peso´s value dropping day after day, what of the above investments do you recommend most?. Thank you.

[Escott]

I recommend you not go into a business in a country you know nothing about. There is a lot more to this place that is hazardous to your business health than the value of the peso.

You should reconsider this country for a place to do business in.

Scott

[ALGS]

Foreign franchises in the Dominican Republic , might be the least feasible of all businesses at this moment. Simple:

- The Franchise royalty is going to be paid in: US Dollars
- Almost everything that will be used in the Franchise's operation will be paid in: US Dollars.

And here's the best part:

- Your franchise earnings will be in: DOMINICAN PESOS!! (44 pesos: 1 dollar and still rising.

But, As Escott says (through-the-lines), you should better consider spending some time here first, doing some research and contacting people in the line of business of your preference.

Good luck
Algs

[Chris]

I would be very very careful at the moment investing in any business in the DR. The free zone businesses (focused on exports) are still hanging in there. But this country is currently financially unstable and teetering at some edge of falling into financial rack and ruin as you may know. Anything that makes money off someone walking in from the street (like cell phones or most franchises) must be approached with the utmost caution.

Wait a few months and see what the next election brings.

Having said that there are questions. Have you lived in the DR? How well do you know the business environment? Who is your proposed target market?

[Dolores]

There is good money to be made in downturns and upturns of markets. The DR is in a general downturn, but that is not true for all sectors. And very few countries in the world have shown more resilience and capacity at quickly springing back given a chance as the Dominican Republic. Right now focus on any business that generates hard currency or sells to areas that have access to hard currency. Study the growth areas.

For perspectives, check out Thursday's conference by David Anthony of The Economist Intelligence Unit at Funglode. See 4 December listing for the conference on our Calendar page at http://www.dr1.com/calendar/index.shtml

Check out Frederic Emam Zade's paper on the Dominican Republic's Economic Perspectives for the Next Decade. See link at the bottom left of the opening page of funglode.org