By John Savage, Banker Trust
Although the Dominican Republic is not typically regarded as a tax haven, that is actually one of its attractions. Unlike traditional offshore centers, it has not been under pressure from the likes of the OECD, the G20 and the Obama administration. The Dominican Republic has a territorial tax system much like Panama’s, meaning that you can live there and enjoy the beaches tax free, provided your income comes from outside the country. It’s also known as one of the more liberal places for those seeking a second passport or citizenship.
Three Good Reasons to Consider the Dominican Republic for Second Passports and Offshore Investing
1. Tax Haven
Dominican Republic has a territorial tax system, meaning that if you live there, you would only be subject to pay taxes if you had local income. You can earn what you like outside the country and you don’t even have to declare it, yet alone pay any taxes. This applies to both individuals and companies.
2. Second Passports
Dominican Republic is one of the most liberal countries when it comes to granting citizenship through naturalization. You obtain one in as little as a year. As long as you haven’t done anything to upset the President, he will sign a decree making you a citizen. Absences don’t affect your citizenship status. This liberal naturalization law dates back to 1948. Dual citizenship is allowed.
Note: Please do not confuse the Dominican Republic with the Commonwealth of Dominica. The Commonwealth of Dominica is a small, English-speaking island state with an established economic citizenship (second passport) program catering mainly to the super wealthy. The Dominican citizenship program requires an investment of hundreds of thousands of dollars. With Dominican Republic, however, you could obtain your second passport for as little as $26,500 plus the one year wait.
Dominican Republic is a good place to live. First of all, it’s affordable. The tax exemption you get in the Bahamas by buying a half-million-dollar property you get almost for free here. The capital, Santo Domingo, is a modern cosmopolitan city with a beautiful colonial heart. The Spanish colonized it, then the Americans were mainly responsible for the development of the city. The country’s second city Santiago, and the beautiful north coast, were only joined by decent roads built by the Americans in the 1920s. Before that, the north was almost a separate country – trading more with the British and Germans. Today there is a substantial Jewish population up there, and parts where French and Italian are frequently spoken. So there’s really something for everybody.
Dominican Republic has not been high on the traditional lists of places to retire to, that are hyped on the internet. This might be a good thing. Real estate is good value, it’s relatively easy to immigrate and obtain citizenship, and the business environment is nearly as favorable as the climate!
Owning a second passport through dual citizenship in another country is an integral part of international diversification. The idea is that no government should have the sole power over your life or your assets. If you are the citizen of only one country, as most people are, you are essentially at the mercy of your government. If they decide to jail you or confiscate your assets, most of the time you’re on your own.
Putting your money into foreign real estate is very appealing strategy right now. Real estate has always made sense as an asset allocation, but we are more persuaded today than ever that foreign property should be part of every investment portfolio. You can’t watch everything going on in the United States right now and not be persuaded that holding real assets in the form of real estate outside that country isn’t a very good idea.
As you know, thanks to the new U.S. HIRE Act, currency controls in the United States have been seriously tightened. When this legislation takes full effect, foreign financial institutions will be required to report on the investment activities of U.S. citizens.
It’s been increasingly difficult for some time for an American to open a bank account overseas. Some banks have taken the position that they don’t want to do business with Americans, period. Not worth the hassle. Some banks are even kicking current American clients, even longtime American clients, to the curb, unceremoniously closing their accounts.
Options for Americans to protect their assets abroad are going to continue to diminish. If you aren’t already holding a sizable portion of your assets outside your home country, we strongly recommend that you make this a priority agenda, and a portfolio of international real estate holdings should be an important part of your strategy.
First, if you’re an American, it is one of two assets you can hold offshore without triggering a reporting requirement to Uncle Sam (the other is gold and other precious metals). The real estate you hold in another country is your own business.
Plus, it’s unseizable. The IRS might be able to take your foreign bank accounts (the new legislation makes this easier than ever). But how are they going to take your condo in the Dominican Republic?
Why Obtain the Dominican Republic Passport
Dual Citizenship – Dual citizenship is permitted and there is no residency requirement. However, once citizenship is granted you have the option of living and working in the Dominican Republic for the rest of your life.
Granting of Citizenship- If you submitted all documents, passed all necessary procedures, as a rule we can expedite your case where you will receive your Certificate of Naturalization and Passport. The Minister of Immigration will personally sign the Certificate of Naturalization authenticating you as a citizen of the Dominican Republic.
Visa-Free Travel – Travel visa-free to more than forty (40) countries. Visas to the US, Canada, and European Countries are available for an additional cost.
Tax Free Status – Second passport and Dominican citizenship is the key to preserve your wealth. If you have income coming in from outside of the Dominican Republic you do not pay income tax on this income.
Security – Protection of bank accounts, real estate and businesses, both abroad and within your own country.
Confidentiality – The Government of Dominican Republic does not inform the country of your current citizenship or residency about your second or third citizenship.
For more information about tax haven and second citizenship opportunities in the Dominican Republic, please complete and submit the form below.