It is the base of the Donquixote Pirates, judging by the presence of his subordinates and his smiley on the mansion. Initially it was thought that they were allowed to stay there only because Doflamingo was an ally of the World Government, but later it was revealed to be due to his status as King of Dressrosa. However, with Doflamingo renouncing his pact with the World Government, his status as a king has been revoked along with his privileges as a Shichibukai.  The Straw Hat Pirates and Trafalgar Law are currently on their way there to destroy the SMILE factory.
Dressrosa is relatively close to Punk Hazard, as travel between the two islands can be done in a short period of time.
Dressrosa means "pink dress" ("rosa" means "pink" in many languages such as Italian, Spanish, Portuguese, Catalan, Galician, German and Swedish).