Why The Dominican Republic Is A Top Backup Residency Option
When I sat down with my conference team to put together our 2016 calendar of events, the Dominican Republic was at the top of my list of destinations I wanted to be sure we included.
Why the Dominican Republic in 2016?
In short, the answer is that this island nation is your best option for an affordable life in the Caribbean and one of the best places in the world right now to invest in a rental property, both because of the growing demand and also because the property market is undervalued. In some places, you can buy a rentable one-bedroom apartment for as little as US$50,000.
Another reason to be looking at the Dominican Republic right now is its approach to residency. You don’t have to live in the country to be a resident and enjoy the associated benefits, making this a great backup residency option.
Furthermore, while officially you’re required to have two years of permanent residency before you’re eligible to apply for naturalization in the Dominican Republic, the country is keen to attract foreign investors and residents and so is allowing applications for naturalization after just six months of permanent residency. The naturalization process used to take seven years; it’s currently taking a year-and-a-half. Again, this country is very eager to attract foreign investment dollars.
FAQs About The Dominican Republic
Here are answers to frequently asked Dominican Republic questions to help you consider and process the investment, residency, citizenship, and other opportunities on offer in this sand-fringed jurisdiction…
Q: Do you have to be a resident to open a bank account?
Q: Is there a minimum deposit requirement when opening a bank account?
A: No, not always. Depends on the bank.
Q: Where is the Dominican Republic in relation to FATCA? Are banks compliant?
A: Yes, some banks are compliant. This is an evolving situation here, as it is everywhere in the world.
Q: Panama, for example, restricts many professions. Are there such restrictions here?
A: No, none at all. You can practice any profession or start any kind of business you want in the Dominican Republic, so long as you are qualified to do so. If you are an attorney back home, for example, you could practice in the Dominican Republic after having your license validated here. In that case, to obtain that validation, you would need to be a resident.
Q: Would passive income count toward an investor visa residency?
A: Yes, any income can be used for this. The requirement is to be able to show that you have been receiving this income for at least five consecutive years.
Q: What is the minimum investment amount to qualify for investor residency?
A: The minimum for domestic investor residency status is US$200,000. For this visa option, a real estate purchase doesn’t qualify.
Q: What if you registered a company and put US$200,000 in it and then the company used that money to buy a piece of real estate. Would that qualify for the residency?
A: Yes, that would work. You could register the company for the sole purpose of buying the condo. That qualifies.
Q: If you obtain Dominican Republic citizenship, would you be required to give up previous citizenships?
A: No, the Dominican Republic allows you to keep up to three citizenships.
Q: Can you get provisional residency and still travel back and forth to the United States freely?
Q: What is the required time in country to maintain residency once you’ve established it?
A: You need to come back to renew every four years. Stay away for longer than four years, and you’ll have to pay a fine when you renew… but you should still be able to renew.
If you’re shopping the globe for a backup residency or second citizenship option, this is one of your best.
“Lief, I am subscriber of your Simon Letter. It is a good read, but it does not answer all of my short-term questions. So I am wondering what kind of guidance you can offer me in the following situation.
“I hold an EU passport. I am in the process of cutting all ties with my home country in Europe. I will spend on average three weeks per month in Mexico during the next one to three years. I will be consulting physically at client sites and plan on renting an apartment.
“For ‘proof of address’ for opening of new bank accounts, etc., I can get a UK bank statement and a TV license, although I don’t live there or spend time there. I can probably get utility bills from Mexico later on, but I am also willing to rent/buy an apartment in a country like Panama, which seems to have a future and is not too far away. What do you think?
“Finally, I need to invoice a U.S. LLC for my services in Mexico. The question is how to do this in a tax-efficient way without living or spending time in the United States?”
You’ve got the idea. To meet the proof-of-address requirement for opening a bank account, you need to show a utility bill for that address with your name on it. It could be an address in the U.K. of a friend or the address of an apartment in Mexico that you rent or of a house in Panama that you own. Doesn’t really matter. You just need a bill in your name with the address you’re referencing on the account application forms.
Billing a U.S. LLC for your work in Mexico is a bit trickier because of potential tax implications. You should speak with a U.S. tax advisor. I recommend Vincenzo Villamena.