If you are considering buying a property in the Dominican Republic, I am sure that you will appreciate this information about the Law 171-07 regarding special incentives to foreign retirees and passive investors of non-dominican source.
I. PURPOSE OF LAW 171-07
As stated in the preamble of Law 171-07, “the Dominican State recognizes that the capital and currency contributions coming from abroad contribute to the development and general well being of the population, the economic activity and national production”; thus, it is an ongoing priority for the Government to take the necessary measures to allow the Dominican Republic to remain an attractive option to foreign investors vis a vis other countries in the region.
Pursuant to the provisions of Law 171-07, retirees and passive investors, as defined under Article 1 of said Law, are eligible to obtain the Dominican residency; and to that effect, they benefit from the expedited residency process created pursuant to Decree No. 950-01 that allows foreign investors to obtain the issuance of the requested residency card within a term of no longer than 45 working days.
II. TAX BENEFITS UNDER LAW 171-07
For the purposes of the law, the term investor shall mean “those individuals that benefit from steady and permanent income derived from capitals generated or located abroad by reason of any of the following:
(i) deposits and/ or investments placed in banks outside of the Dominican Republic;
(ii) remittances from foreign banks or financial entities;
(iii) investments made in foreign corporations;
(iv) remittances of payments related to real estate properties;
(iv) interest paid in connection with securities, in national or foreign currency, with the State or its institutions, provided that the invested capital was gener- ated abroad and the currency conversion is made at any nancial institution in the DR;
(v) interests, income or dividends derived from investments made in movable or real estate assets located in the Dominican Republic, provided that the capital invested was generated mainly abroad.
Those individuals who qualify as retirees or investors under Law 171-07 may benefit from the following exemptions:
a) No Property transfer taxes for the first property acquired.
b) 50% of the Mortgage Registration Tax, if the secured creditor is a financial institution subject to the regulations enacted pursuant to the Monetary and Financial Law.
c) 50% of the Real Estate Property Tax.
d) Taxes on dividends and interest payments, regardless of the source (Dominican or non Dominican source).
e) 50% of the capital gain tax (provided that the investor is the majority shareholder of the company that is liable for payment of the tax and if the main corporate purpose of the company is not commercial or industrial.
f) Import duties levied on the importation of home furnishings, office and professional equipments.
g) Import duties levied on motor vehicles (for 1 vehicle); and if acquired in the Dominican Republic, it will be exempted from the ITBIS (VAT) and the Specific Consumption Tax (ISC).
The exemptions previously described will remain in full force and effect for the duration of the residency issued in favor of the retiree or passive investor.
In the event of death of the retiree or passive investor, his/her acquired rights under Law 171 shall be vested on his/her spouse, or in his/her absence on any other dependant, as de ned under Article 5 of said law, as long
as they comply with the legal requirements that were applicable to the original applicant, as established in Articles 3 and 6 of this legislation.
If you want to know about Application Requirements, do not hesitate to contact us at: firstname.lastname@example.org and we will send them to you immediately.
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