The high informality in MSMEs represents a serious obstacle to the effective enforcement of Law No. 42-08 on the Defense of Competition in the Dominican Republic, warned the president of the Board of Directors of the National Commission for the Defense of Competition (ProCompetencia), María Elena Vásquez Taveras. According to the Central Bank’s 2022-2023 National MSME Survey, nearly 85.2% of these businesses operate outside formal regulatory frameworks, a situation that weakens competition and affects the market.
Impact of informality on the defense of competition
During her speech at the 2025 Global Forum on Competition, held in Paris, Vásquez Taveras explained that the high informality in MSMEs limits the tracking of economic transactions and ultimately impairs the overall functioning of markets.
The coexistence of formal and informal businesses creates uneven competition that hinders compliance with legal, tax, and regulatory obligations, generating deep inequalities and affecting ProCompetencia‘s ability to detect and penalize anti-competitive practices.
In fact, between 2018 and 2023, the institution had to close or suspend 17 investigations precisely due to the lack of reliable data and the predominant informality in the analyzed sectors, showing that this issue not only affects formal agents but also directly impacts consumer protection.
Structural difficulties generated by informality
- Inability to perform precise economic analysis due to a lack of reliable information.
- Limitations in influencing the formulation of public policies that regulate and promote competition.
- Difficulty in interinstitutional coordination due to data dispersion and incompleteness.
- Generation of macroeconomic distortions that affect productivity, growth, and decision-making.
Initiatives to combat informality
In response to this situation, ProCompetencia is promoting the creation of the Observatory of Competition and Informality, which will centralize data on the impact of informality in Dominican markets. This tool will facilitate the formulation of public policies with protocols guaranteeing the confidentiality and traceability of information.
Additionally, it is proposed to reform the competition law to expand the sanction regime to natural persons, allowing action against anti-competitive practices even within the informal sphere.
International context and relevance of the forum
The 2025 Global Forum on Competition, organized by the Organisation for Economic Co-operation and Development (OECD), brings together competition authorities from over 100 countries to analyze current challenges such as artificial intelligence, informal markets, and the healthcare sector.
ProCompetencia‘s participation is a wake-up call regarding the high informality in MSMEs as a structural problem that hinders healthy competition and requires comprehensive solutions to strengthen formal markets in the Dominican Republic.
Call to strengthen the Dominican market
The high informality in MSMEs not only halts investigations and sanctions, but also weakens the state’s capacity to guarantee fair markets and the protection of responsible consumers. Attention to this issue is vital to improve competitiveness, business formalization, and sustainable economic development.