"The Fairest Land Under Heaven" - Christopher Columbus

Dominican Republic: World's Most User-Friendly Expat Haven

(source: Overseas Opportunity Letter, a publication of Live and Invest Overseas, May 20, 2009)

Dear Overseas Opportunity Letter Reader,

Editor Rebecca Tyre returned recently from a scouting trip to the Dominican Republic.

Her conclusion? This is one super-user-friendly place to live or retire.

Rebecca continues:

"Expat friendly...that's the first thing that comes to mind now when I think about the Dominican Republic.

"Yes, this is a touristy country, but that has its benefits. All that tourist infrastructure amounts to an extensive network of businesses and services that the expat can easily plug into. As an expat in the DR, you have many more choices for the kinds of amenities you might be looking for than you'll typically find in other countries.

"Furthermore, gaining full-time legal foreign residency is a straightforward proposition. You simply apply for provisional residency and then deposit the equivalent of US$15,000 in a Dominican bank. After one year, you are granted full residency.

"The truth is, though, many expats don't even bother going this legal route. Many stay on the island indefinitely as 'tourists.'

"You obtain a tourist visa upon entry into the country. It costs US$10 and is technically valid for 60 days. However, the police are not vigilant about checking foreigners' passports, so many expats remain in the country for years with nothing more than tourist credentials.

"They report that, when they want to leave the island, they pay a small fine...then they return without restriction. Some expats have been living in the Dominican Republic this way for years...

"Expats have been coming to the Dominican Republic for three decades, starting businesses and launching services geared toward their fellow foreign residents. In the Samana peninsula, for example, on the Dominican Republic's northeast coast, you find expat-owned grocery stores carrying gourmet foods, specialty products, and otherwise hard-to-find items.

"The town of Las Terenas boasts the country's first drive-through bar and restaurant, owned and operated by a U.S. expat.

"Yes, drive-through bar. No kidding. You pull up and order a cheeseburger and a beer to go. Your lunch is delivered to you in your car...and you continue on your way.

"Where a service need appears, an expat steps up to open a business to fill it. U.S., Canadian, French, and Italian expats run hotels, restaurants, cafes, and real estate offices throughout the country.

"A French national doctor opened a medical practice to treat the thousands of French-speaking expats on the island.

"It's an entrepreneur's playground...and a tax haven. As a foreign resident in the Dominican Republic, you’ll pay no tax on money earned outside the country…not even on money remitted to the country for your living expenses.

"In addition, the first 290,000 pesos (about US$8,000 as of this writing) that you earn locally is also tax-free.

"Rental income is subject to tax at the rate of 25%, but related expenses are deductible.

"Note that, for rental income, you'll be charged a 10% withholding tax. This isn't on top of the rental income tax, though. It's sort of an advance payment and is credited against your ultimate rental tax liability.

"If you sell a piece of real estate in the Dominican Republic, you must pay 25% capital gains tax, as the income is considered as ordinary.

"When you buy real estate in the Dominican Republic, the sale is recorded in the national registry. Your annual property taxes are based on that recorded value.

"Registered real estate values are generally lower than actual market values. Strictly speaking, this isn't legal, and there are risks. But it's the way it's done here in the DR.

"If the registered value for the piece of property you purchase is less than US$138,327 (at today's exchange rate), you do not pay property taxes. If the registered value is greater, you pay a 1% annual property tax.

"Not every potential expat would be happy in this tourism-based culture, but I have to say that I was smitten.

"Certainly, the Dominican Republic is the most affordable Caribbean choice. It's also one of the most user-friendly expat havens worldwide right now."

Kathleen Peddicord

P.S. "Like many places around the world right now," continues Rebecca, "the Dominican Republic's real estate market is down...way, way down. Construction companies are laying off workers, and real estate agencies are closing their doors.

"Which is to say, there is a serious window of opportunity on this island. If you are a buyer with cash, name your price. What could you buy? How about a brand-new, one-bedroom apartment about a five-minute walk from a pristine Caribbean beach for US$100,000...or even less.

"Interested in something bigger? I saw one top-of-the-line condo, about 250 square meters, sitting with the beach on its doorstep. Finished and furnished to an impressive standard. In a full-amenities development. Even the asking price is a good deal, given what you're buying...but I'd bet that, if you made a cash offer, you might buy this for 50 cents on the asking-price dollar. The seller needs cash."

More on this soon. Meantime, for more information on current real estate opportunities in this country, take a look here. http://www.liveandinvestoverseas.com/dominicanrepublic2.html.