The Dominican Republic is open to foreigners and investors from a foreign country, as has been demonstrated through the various laws available to interested parties. The first of these is Law number 285-04 on Migration, application regulation number 631-11 and Law number 171-07 on Incentives for Pensioners and Rentista from foreign sources, which, as its name says, offers a series of tax incentives for those who decide to avail themselves of said law. These benefits are:
1) Exemption of 50% of the taxes on the registration of real estate property established in law 173-07 on tax collector normally is 2%.
2) Exemption on mortgage registration established in law 173-07 tax collector.
3) Exemption from the 3% tax for the real estate transfer of the first home purchased in the Dominican Republic.
4) Exemption from import taxes for motor vehicles for those foreigners who establish their residence in the Dominican Republic, in the category of pensioners or Rentista, subjecto to certains restrictions.
5) Exemption from the payment of taxes on the importation of household items, contemplated in Law 14-03, based on the tariff in the Dominican Republic, subject to certains restrictions.
6) Exemption from the payment of the Real State Tax when applicable (the exempt amount for the year 2020 is RD $ 7,710,158.20).
The exemption of 50% of the capital gain tax, provided, that it the rentista is a majority shareholder of the company and that said company.
The beneficiary must be a holder of the residence card as a Dominican resident under the category of pensioner or rentier to be able to opt for these exemptions. In this sense, law 171-07 has established that pensioners or retirees are those foreigners who receive US$1,500.00 or its equivalent, on a monthly and fixed basis, either by a public institution such as Social Security in the case of the United States or from of a private retirement plan.
The Dominican Republic recognizes the family as an institution of society, so if an applicant for residence in the pensioner category wants his family to accompany him on his retirement in the Dominican Republic, he may choose to do so, fulfilling some requirements. The most important of these is that for each family member who depends directly on the main applicant, the latter must show an additional income of US$250.00 or its equivalent. In other words, if the main applicant wants his wife to opt for residence in the pensioner category, then the amount for the pension that he requires proving to the consular and immigration authorities is US$1,750.00.
According to the law rentista have been defined as those people who enjoy stable and permanent incomes, whose main asset generated is from abroad and verifiable BY any of the following reasons:
1) Deposits and / or investments in banks established abroad
2) Remittances from banking or financial institutions abroad
3) Investments in companies established abroad
4) Interest received from securities issued in foreign currency generated abroad, which are in financial institutions legally authorized to operate in the Dominican Republic.
5) Benefits obtained from investments in securities issued in foreign and national currency, with the State or its institutions, as long as the capital has been generated abroad and the currency exchange is carried out in any of the country’s financial institutions.
6) Interests, income or dividends of real estate or real estate investments made in the Dominican Republic, the principal of which has been generated or accrued mainly abroad.
The rentista must demonstrate that they have received in a stable and uninterrupted way the sum referring to as rent for at least the last 5 years and that they will continue to receive it.