31
May

Retire in the Dominican Republic can be an attractive option for many people, due to the advantages that the country offers to foreign nationals. These advantages range from the possibility of living tax-free, to enjoying a relaxing life, and an excellent climate, among others.

In this article we will explain why retire in the Dominican Republic can be the best option for many people who seek to live a relaxing and quiet life, enjoy the fruits of their labor, their business and at the same time live tax-free. The Dominican Republic offers great benefits for retirees, such as:

Cost of Living: 

The living cost in the Dominican Republic is low compared to most highly developed countries. According to Numbeo, the Dominican Republic is ranked 74th in its Ranking of countries, where it analyzed highest costs of living.

This means that life in the Dominican Republic is cheaper than in countries like the USA, Canada, and most European countries.

This makes our country an appealing destination for many people looking for a place to retire with an affordable cost of living. Food, housing, and other essential services are significantly cheaper in the Dominican Republic, which allows retirees to extend their pensions, retirement savings, etc.

High-quality medical care:   

The Dominican Republic has numerous hospitals and clinics with high-tech equipment. The cost of medical treatment in the Dominican Republic is significantly lower than in other highly developed countries. Additionally, the Dominican Republic was among the leading countries in medical tourism throughout Latin America, according to statistics.

This means that retirees in the Dominican Republic can have access to high-quality health care, stay healthy and avoid excessive health costs.

Warm Climate:

In the Dominican Republic the average annual temperature hovers around 78.6°F which makes it an ideal destination for retirees looking to escape the cold and harsh winters of their home countries.

Cultural Diversity:

Another advantage of retire in the Dominican Republic is our great cultural diversity, with people of many different nationalities living in the country. This makes it possible to carry out your life and interact in the way you prefer, either by integrating as a local or living in areas inhabited predominantly by foreign nationals.

Additionally, our country has a rich history, vibrant music as well as exquisite cuisine. This gives you as a retiree the opportunity to experience a new culture, and new experiences as well as make new friends.

Relaxed Pace of Life

The pace of life in the Dominican Republic is more relaxed and slower paced than in most developed countries. Which allows retirees and foreign nationals in general to live a more relaxed and calm life with less stress.

The possibility of retire in the Dominican Republic and living tax-free

One of the greatest benefits of retiring in the Dominican Republic is the potential to live tax-free. This depends on your personal situation, specifically if you obtain Residence as a Retiree.

The Dominican Republic offers a tax exemption for all foreign nationals and Dominicans who obtain Retiree Residency in the Dominican Republic.

The Dominican Republic offers a tax exemption incentive so that foreign nationals do not pay taxes on their income if they fall under one of the established laws.

Please note that in the Dominican Republic the tax regime is territorial, which means that you will only need to pay taxes for the following:

1. What is generated in the country
2. Your commercial and financial activities in the country

Therefore, nothing that takes place outside of the Dominican Republic applies, with the exception of “Dividends or Interests” generated outside national territory. However, if you comply with Law 171-07 and obtain Resident status as a Retiree, you would be exempt from this and other taxes.

We will be providing additional details on the benefits of retiring in the Dominican Republic below:

1. Your pension or retirement benefits will not be taxed, regardless of the amount you receive, since it is considered an income generated outside of the Dominican Republic.

This is one of the reasons why the Dominican Republic is one of the best countries to Retire to, as it does not levy Retirement benefits.

2. Exemption from taxes that levy the payment of dividends and interest, generated in the Dominican Republic or abroad.

This is one of the most important and substantial exemptions for any foreign national.

One of the main drivers for individuals to change their legal and tax domicile is taxation.

We live in a world where taxes represent a significant burden, and one of the GREAT BENEFITS that you can enjoy, if you decide to reside in the Dominican Republic with this type of immigration status, is to be exempt from paying taxes for dividends and interest generated both in the Dominican Republic and abroad.

Like most countries, we pay taxes based on income generated where we reside, and in this order, you would not need to pay any taxes in the following circumstances:

– In the country where the income is generated, if you do not reside there.

– In the country where you reside, if that country is the Dominican Republic.

3. Tax exemption on real estate transfers for the first property acquired.

The transfer fee is 3% of the total value of the property acquired, based on the value specified by the Department of Internal Revenue (DGII in Spanish) or the contract amount.

However, if you have obtained resident status by way of being a Retiree, you may apply for an exemption from this tax.

4. Property Tax Exemption of 50% when applicable.

As in many countries, we pay Real Estate Tax (IPI in Spanish) which is 1% of the registered value.

If you have Retiree Resident status, you would only pay 50% Real Estate Property Tax (IPI).

5. Tax exemption of 50% on mortgages, for cases when the creditors are financial institutions regulated by Monetary and Financial Law.

The Mortgage Tax is 2%, however, individuals granted retiree residency may opt for an exemption of 50%.

6. Exemption of 50% from Capital Gains Tax.

This exemption applies when the rentier is the majority shareholder of the company subject to the payment of this tax and said company is not engaged in commercial or industrial activities. This exemption is not as easily understandable or applicable, since it only applies to companies that are not commercial or industrial in nature.

7. Exemption from tax payment for Household Goods and Personal Assets.

If you have this type of residency status, you may enter all your belongings without having to pay customs tax.

8. Partial exemption from motor vehicle taxes.

The applicant is allowed to import one (1) motor vehicle under the benefits of this program. However, vehicles purchased in the local market will be exempt from paying the Transfer Tax of Industrialized Goods and Services (ITBIS in Spanish), as well as the Consumer Selective Tax.

In addition to these benefits, upon obtaining Retired Resident status, you will also enjoy the following benefits:

1. Permanent Residence, renewable every two (2) years.
2. You may claim the following dependents:

– Spouse

– Underage children or those who are able to prove their dependency.

– Underage individuals for whom you have been granted custody rights.

3. After three (3) years, you can apply for Naturalization – Dominican Nationality by way of Retirement.

4. And as we mentioned above, you will not have to pay taxes on your various sources of income outside of the Dominican Republic, your retirement, or pension benefits.

“You will not have to pay taxes on your retirement benefits in the Dominican Republic.”

How do I apply and what do I submit to obtain Retiree Residency?

It is an extremely easy process, if you can prove that you receive a minimum monthly retirement benefit of:

– One Thousand Five Hundred US Dollars ($1,500.00); and

– Two hundred and fifty US dollars ($250) for each additional dependent.

This would be the main requirement, without limiting it to following parameters:

1. Age
2. Nationality

In other words, any foreign national can apply for this type of residency regardless of age or nationality.

Requirements:

1. Current Passport
2. Apostilled criminal record
3. Apostilled Birth Certificate
4. Apostilled Marriage Certificate
5. Apostilled Retirement Certification
6. Among other things, that may apply based on your nationality and your consulate at the beginning of the process.

Morillo Suriel Attorneys at Law is a law firm specialized in several areas of the law, with a department specialized in Immigration Law. This department is prepared to help you with any questions or concerns related to Retirement in the Dominican Republic, Retiree Residency or any other related topic.