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Foreign Real Estate Investment in Dominican Republic

Abstract: For the purpose of real estate investment, the Dominican Republic treat foreign investors as the local ones, and they can buy real estate thorough the Dominican territory without restrictions, even in touristic and maritime locations.

On last two decades, Dominican Republic (DR) has set as one of the most rapid growth economy in Latin America with a mean growth rate with a real 5.4% GDP between 1992 and 2014. RD still has the fastest growing regional economy for 2014 and 2015, with a 7 percent GDP. The recent growth has been trigged by the manufacturing and tourism industries. In 2016 is expected a 7.3% GDP growth.[1]

Concerning the Direct Foreign Investment (IED, as per Spanish initials), Dominican Republic has become the regional epicenter to attract IED. The investments obtained in Dominican Republic for 2015 represented a 37 percent of all investments received in the Caribbean, strengthening it as the largest IED receptor in Central America and the Caribbean.[2]

On this satisfactory business environment a legal system has played a basic role which offers the following advantages: Fair treatment for local and foreign investors, repatriation of 100 percent of profits, free convertibility of funds, free access to international currency in local commercial banks and the Central Bank and a fast and easy registration process.

The real estate industry is not an exception and foreign investors are treated as the local ones, and they can buy real estate thorough the Dominican territory, even in touristic and maritime locations. The only exception is for the border region, on which our constitution forbids the real estate buying by alien people.

To purchase a real estate in Dominican Republic foreign people do not need to be resident nor need a local partner. Such purchase can be carried out through a natural person or a local or offshore Company.

Once the purchasing is completed, the alien citizen has the full and absolute ownership on the real estate, with all the same use and disposition rights as Dominican citizens are entitled to.

Further, according with Law 171-07 on incentives to retired people and foreign source rentiers, the real estate investors can obtain a resident permission in 45 days.

In addition, the real estate industry has been promoted significantly by a number of government measures to stimulate the tourism abroad and give significant tax incentives to the investors by Law No. 158-01 on Tourist Development Promotion. Such law has as basic aim to develop the tourism industry in a reasonable and sustained way in some locations of our country, by several and attractive tax opportunities for those investors desiring to be engaged in this field. Among those facilities are worth to mention the tax exemption for 10 year of 100% on the taxes for income, capital gain, company incorporation and capital increase, real estate transfer and real estate property. Moreover such law exonerates a 100% of custom taxes or goods importation taxes, movables estates, equipment and those material needed for building and setting up the real estate facilities purchased.

 

Rodolfo Mesa

r.mesa@mesalex.com

Mesa & Mesa| Abogados

Santo Domingo, Dominican

Republic.

[1] Dominican Republic. World Bank. www.worldbank.org

[2] Foreign Direct Investment in Latin America and The Caribbean 2016. Economic Commission for Latin America and the Caribbean. www.cepal.org

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Mesa Mesa
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