To start off
with, deciding to relocate somewhere takes some thought and very
proper planning. I am going to outline the steps I suggest to clients
with regards to the Dominican Republic, but really this can apply to a
number of places also, so this might be a very general primer for many
people who yearn to do this regardless of where or why.
First and foremost,
I think it important to get your own personal financial house in order.
That is to say, get the money matters, such as banking and investments
straightened out first. Many clients have chosen the Dominican Republic
because bank account interest is 100% locally tax-free and because interest
rates for US dollar deposits do tend to be higher than other places, including
current interest rates in Panama. So, if one consideration is to
have the ability to live off of your savings, the DR might be one place
to look at, even if you decide to live elsewhere. US Dollar Bank
time deposits (CD's) pay up to 10% at the moment, and if you are going
to live in the country, then deposits paying up to 22% in Dominican Pesos
might be worthwhile as well.
more clearly, while it is almost impossible to live off the current interest
earned in US bank accounts (which is also taxed) at the moment, it is very
possible to do so in the Dominican Republic. How much do you need?
That really depends upon what kind of lifestyle you want, but it is safe
to say you can pay your monthly rent, monthly utility bills and cover things
like grocery shopping on the equivalent of US$ 1,200 to $1,500 per month.
If you happen to have more than this amount coming in (as interest from
your investments) then ever better. As a very practical example,
many clients are earning the equivalent of US$ 1,800 from peso based investments
(US$ 100,000) and are covering their monthly living expenses with that.
Also keep in
mind that there are many places to invest or do your banking regardless
of where you are living. As a case in point, many of our clients
in Mexico and as far away as Asia do some of their banking in the DR to
take advantage of the higher US dollar rates. Similarly, many clients
living in the DR might also do some banking or have investments in Austria,
Costa Rica, Venezuela, Switzerland, the Channel Islands, and Ireland just
to name a few. So, it is very possible to be a citizen of the world,
be diversified and take advantage of the best places for returns on your
many people often travel to visit relatives, some of our clients often
travel to visit their money (which might even be a better reason at
times). Keep in mind that many countries offer tax-free banking
incentives for foreigners only and or local citizens as well. In
this regard, this might be another reason for searching out a financial
home, which could be different from your physical one.
step might be the investigation of residency requirements or programs for
where you want to live. The question then becomes which county offers
the best process or program with respect to becoming a resident and or
citizen? Once again, many clients have chosen the Dominican Republic,
but there are a number of places to consider - each with their own set
of requirements. In comparison to places such as the Turks
& Caicos, which requires an investment of US$ 250,000 into the country
(real estate or other) just to become a resident, the Dominican Republic
process can be much less cumbersome than many other Caribbean Islands (and
Like any country
looking to attract new and good residents (and citizens), the Dominican
Republic department of immigration asks that clients provide a number of
things, which are as follows. One is a letter of good conduct from
their local police department, to prove the client does not have a criminal
background. The other is a requirement that the applicant take a
local medical exam, to offer proof that the applicant does not have a disease
which could effect the other locals in the population or have a drug dependency
problem (Aids, Tuberculosis, and drug usage is what is screened for).
On the subject of illegal drugs, it should be noted that the Dominican
Government has no tolerance at all for drugs, and you will not find drugs
for sale the way I have in places like Jamaica or Antigua. So, if this
is your cup of tea, forget about the Dominican Republic as a place for
you. Regardless if you are a tourist, a foreigner or a local, they
will lock you up and throw away the key.
mention this because some people have asked, and my reply is that the Dominican
Republic, in many respects, is much more free and libertarian than North
America, but they do not tolerate any nonsense either.
The other main
requirement or part of the residency process in the Dominican Republic
involves what is termed economic solvency, and is the part most clients
are confused about. To explain economic solvency, the department
of immigration looks for an investment or assets inside of the country
of RD$ 500,000 Dominican Pesos, which is equivalent to about US$ 31,000.
The interesting thing is that this requirement is very open ended in that
it can be demonstrated in a number of ways. This includes opening
of a local bank account or brokerage account, purchase of real estate,
or the demonstration of a business investment as well. There is no
requirement that a client specifically place money into any particular
type of investment or asset. In addition, such money or investment
always belongs to the client. The Dominican Government simply wants
you to demonstrate you have some funds to support yourself, and are solvent.
In this regard, we of course assist clients with local banking introductions
as part of our services and also assist with such things as the formation
of locally incorporated company (should the client wish as well).
the Dominican Republic does not have an economic or instant citizenship
program as some other countries do, the process for residency is very straight
forward, is less cumbersome or expensive that other jurisdictions, and
does offer the client to apply for naturalization and citizenship later
on. In addition, while non-citizens do not have the opportunity to
vote in local elections, legal residents do have all the other rights of
local citizens. Which include the right to legally live and work
in the country, open a business, and own property or real estate (in
fact non residents may own real estate as well).
consideration or question is what do I do when I get there? In other
words, what kind of leisure or even business activities are available?
This is quite frankly, another key point to look at when deciding on a
place to relocate or retire. In the case of the Dominican Republic,
the country is located on the second largest island in the Caribbean, offering
beaches, mountains, golf, sport fishing, boating and a host of other similar
things. The country's largest city and capital, Santo Domingo, offers
modern shopping malls, movie theaters, concerts, ballet, theater, and pretty
much everything you might expect to find in a modern city.
If your concern
is business opportunities, it is interesting to note that the country offers
one of the largest collections of duty free and tax-free business zones
or compounds in the world. Some clients have sought to set up both
service and manufacturing businesses, such as travel agencies, order fulfillment,
jewelry manufacture, perfume and leather hand bags (mail order),
and a host of other things. Operating your business inside of one
of these zones or compounds offer an exemption on duty or import taxes
and the opportunity to earn business income 100% locally tax-free.
Should you wish to explore opportunities in the local market, equally interesting
is the fact that the country had one of the fastest growing economies in
of a US recession has been felt to some extent, the local economy is still
poised to turn in a positive return this year again. In fact, new construction
projects are still under way and many clients have sought to fill a void
with products or services that did not exist before (but are in demand
at the moment due to the growth of the middle class).
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