 Recent legislation has made it very attractive for foreign investors to invest in the Dominican Republic.
Advantages of Registering as a Foreign Investor
An investor in possession of a Certificate of Foreign Investment has the right to freely transfer into foreign currency through private exchange markets:
- the total amount of capital invested, including capital gains;
- the total amount of profits declared during the fiscal year, after paying relevant taxes.
During the 60 days that follow, the investor must submit the following documents to the Central Bank:
- annual declaration of dividends duly certified by an authorised Certified Public Accountant (CPA);
- proof of payment of relevant taxes.
Non-registration of investment at the Central Bank does not affect the validity of the investment in any way. However, the investor could run into difficulties when trying to repatriate funds.
(The unabridged text of the Law 16-95 and its regulation 320-96, is available in French at the Dominico-French Chamber of Commerce)
Promotion of Tourism Development in developing regions or areas: Law 158-01
Tourism-related activities include the following: hotels, convention centres, cruises, ecological recreation parks or theme parks, tourism or port infrastructure, operation of small- or medium-sized companies dependent on tourism.
Tax Exemptions for a period of 10 years cover:
- 100% exemption of income tax
- Taxes on the construction and registration or sale of real estate rights
- No customs duties on importation of raw materials, equipment, building materials, and any other goods necessary for building, the setting up and operation of tourism-related activities
- Companies or individuals can deduct up to 20% of their annual profits, if they invest in a project included in this law.
There is one tax on property, commercial or residential, when the market value is over 5 million Dominican Pesos *. It is 1% of the value declared over this amount. This tax is not reimbursable and is a one-off tax. Property transfers are taxable at 3% of the property market value. However, properties worth less than 1 million Dominican Pesos * are exempt for this transfer tax. (Again, Bachata Properties can recommend reliable Dominican lawyers to handle this part of your real estate investment).
*1 Dominican Peso = US$33
*1 Dominican Peso = 39 Euros
Real Estate
Foreigners can acquire property in the Dominican Republic in the same manner as Dominicans. Presentation of the certificate of property issued by the person who registered the deed is enough proof that the seller has a deed to transfer the property. Any mortgage or charges would be on this certificate. However, before buying property, it is advisable to verify this directly in the Deeds Registration Offices whose archives are open to the public. (Usually a lawyer in the Dominican Republic does this kind of work for foreigners and Dominicans alike).
This step protects the buyer against the existence of a sale or mortgage that, even though it may have been authorised previously, hasn’t yet been registered when the buyer submits the sale contract for registration. For this reason, rapid registration of the sale is extremely important. To do this, the buyer must submit an original of the sale contract to the Registration Office of Deeds, which must be legalised by a Notary Public, together with the Certificate of Property in the seller’s name; the latter will be cancelled and substituted by a new deed in the buyer’s name.
Since 1995, there are no restrictions for foreigners about buying property in The Dominican Republic.
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