In may 2017 the “Live and Invest in the Dominican Republic Conference LIOS” was held in Santo Domingo.
This conference took great interest and was one of the busiest “Live and Invest Overseas” ever organised. Main topics were the straightforward process of buying real estate in this country as a foreigner and obtaining residency.
The Ministry of Tourism has launched a program that makes certain properties tax exempt for up to 15 years. For retired persons it is so that they are eligible for reduced transaction fees when closing on a property purchase, thanks to their age! How nice is that.
Next topic covered was a comprehensive overview of the country’s visa and naturalization programs.
The Dominican Republic is one of the easiest and quickest jurisdictions in the world for obtaining residency and a second passport. If you qualify under the so-called Fast Track residency program, you are also fast-tracked to become a DR citizen, with the passport to prove it. You can apply for naturalization six months after obtaining your permanent residency card.
That is an extraordinary opportunity and was one of the primary appeals for the conference-goers. Many opted in the application process for Fast Track residency, even before arriving at the event.
This makes an important point of notice. You must begin the residency process in your current country. In fact, you need to obtain a residency visa before going to the DR as part of the overall process. Enter on a tourist visa, and you won’t be able to complete the residency process.
Residency process begins (and initial residency visa in hand), the next step is a quick visit to the DR to set up a bank account, provide fingerprints and photos, and submit to a medical exam. You should then receive your permanent residency card within 45 to 60 days afterwards.
Having completed this process, (after having received your permanent residency), you need to wait only six months before you can put in your application for citizenship.
It appears that the Dominican Republic is a top real estate investment haven… a top choice for foreign residency and a second passport… and, as well, a classic tax haven which tops it all.
The Dominican Republic taxes only income earned in the Dominican Republic. Living here, you’d be liable for tax only on income you earned here. When earning no DR income, and you owe no DR tax art all. Money brought into the country from any outside source (including retirement, pension, or investment income, as well as income earned in any other country) is 100% tax-free!
Dominican income, including investment and rental income generated in the DR, is taxed from 10% to 25% depending on total annual net earnings. If net rental income, for example, is less than US$9,000 per year, no tax is owed.
What if the property you buy doesn’t qualify for the 15-year tax exemption? If it’s valued at US$150,000 or more, the annual property tax is 1% of the assessed value above the initial US$150,000. Unless you’re 65 years old or older. Again, Third Agers enjoy a special discount. If you’re 65 or older, the 1% property tax is reduced to 0.5%! What if the property value is less than US$150,000? Then the annual rate of property tax is zero.
No wonder the Dominican Republic is a favorite by expats. It’s in the heart of the Caribbean, the weather is wonderful, it is fast and easy to reach from wherever on the world and the tax advantages trumps it all.
For further information please contact Guzmán Ariza, national law and business consulting firm.