Time To Plant Your DR Flag
In my Monday dispatch, I reported on the option to qualify for residency in the Dominican Republic by making a US$200,000 investment in a CD in that country.
A reader wrote yesterday asking for clarification. He was confused, because his Dominican attorney had assured him that he had to use a corporation to qualify for DR residency through an investment in a bank CD.
His attorney was right… until recently.
The government of the Dominican Republic continues to modify the immigration process in an ongoing effort to make it as easy as possible for would-be investors and expats to establish themselves in this country. The relevant government agencies are working in real time to improve and streamline investor-relevant policies and processes.
Another recent change comes in the form of a required insurance policy. This replaces the local Dominican guarantor that residency applicants historically have had to obtain. The guarantor system created a business that mirrored an insurance policy. Dominicans would sign off as guarantors for applicants for a fee. Some people apparently were guarantors for as many as several hundred people.
The point of the guarantor was to cover the costs of deporting an immigrant, should that become necessary. The government wanted to avoid being on the hook for the cost of sending a foreign resident back to his home country, should he commit a crime in the Dominican Republic, for example.
Trouble was, these back-alley guarantors disappeared if it ever came to them having to ante up, as they had signed on for.
Now, instead of seeking out a guarantor, every residency applicant must purchase an actual insurance policy. The policy cost is nominal (around US$100). The insurance policy is better for the government as they are better protected, and it’s better for the residency applicant as US$100 is a fraction of what some guarantors were charging.
Changes like these can happen often and quickly in the offshore world. That’s why I always recommend taking advantage of an opportunity when you’re able.
Big Opportunity In The Dominican Republic
Right now, one big opportunity in the Dominican Republic is to get an easy backup residency that can lead to a second passport… quicker than any other naturalization option currently available anywhere.
Other opportunities in this country that we’re talking about at this week’s Live and Invest in the Dominican Republic Conference include appealing and affordable lifestyle and retirement choices. This island nation boasts many great beach locations, from the south coast close to the capital, Punta Cana at the far east of the island, and the Samaná Peninsula, where Europeans have been settling in Las Terrenas for decades, to the north coast with yet more beautiful beaches.
If beach living isn’t your dream (don’t laugh… not everyone wants to live at the beach), Santo Domingo offers city life and the oldest colonial zone in the Americas.
Or you could look to the lush and mountainous interior of the island for a more rural setting.
Of course, real estate is on the agenda at this week’s event, as well.
The Dominican Republic has one big advantage over other countries when it comes to property purchase. It’s possible for foreigners—resident or non-resident—to obtain local financing. Terms are decent, with up to 70% loan to value possible (even 80% if you know someone).
Interest rates for U.S. dollar loans are in the range of 8% to 10%. That’s more than you’ll pay for mortgage money in the States but better than the double-digit rates if you borrow in Dominican Republic pesos.
My big-picture point is that the Dominican Republic offers very appealing options right now for every flag-planting category. Whether you’re looking for an offshore bank account (Dominican banks will open accounts for non-residents), a backup residency option, a retirement destination, or real estate or other investment opportunities, you should be looking at the Dominican Republic.
And I recommend you look sooner rather than later. The country is beginning to attract attention.
Immigration applications are up dramatically, for example… mostly from Americans, but Europeans and South Americans are coming to the country in increasing numbers, as well.
This influx of foreign retirees and investors will only help the country continue to build economic momentum.
Now is the time to plant your DR flag.
“Lief, I have a variety of offshore real estate properties. I am about to sell my home and move offshore. Need to have info on LLC, trust. Have U.S. custodians now for my IRAs. Should I keep them in the United States or take them offshore?”
Your U.S. IRAs must remain with U.S. custodians. That is, there are no non-U.S. custodian options for this.
It’s the investments in your IRA that you can move offshore. If that is your goal, then you need a custodian that allows for the type of investment that you’re looking to make with your IRA funds overseas. Midland IRA in Illinois is a good option.
If you’re interested in forming an offshore trust, the attorney I recommend for this is Joel Nagel. You can contact him here.