Thinking Of Retirement? Bavaro, Punta Cana Dominican Republic Is The Ideal Retirement Haven

To start off with, deciding to relocate somewhere takes some thought  and very proper planning.  I am going to outline the steps I suggest to clients with regards to the Dominican Republic, but really this can apply to a number of places also, so this might be a very general primer for many people who yearn to do this regardless of where or why.

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First and foremost, I think it important to get  your own personal financial house in order. That is to say, get the money matters, such as banking and investments straightened out first.  

Many clients have chosen the Dominican Republic because bank account interest is 100% locally tax-free; interest rates for US dollar deposits do tend to be higher than other places, including current interest rates in Panama.  



So, if you're considering living of your savings, the DR might be one place to look at, even if you decide to live elsewhere.  

US Dollar Bank time deposits (CD's) pay up to 10% at the moment, and if you are going to live in the country, then deposits paying up to 22% in Dominican Pesos might be worthwhile as well.

Stated more clearly, while it is almost impossible to live off the current interest earned in US bank accounts (which is also taxed) at the moment, it is very possible to do so in the Dominican Republic.  

How much do you need?  That really depends upon what kind of lifestyle you want, but it is safe to say you can pay your monthly rent, monthly utility bills and cover things like grocery shopping on the equivalent of US$ 1,200 to $1,500 per month.  

If you happen to have more than this amount coming in (as interest from your investments) then ever better.  As a very practical example, many clients are earning the equivalent of US$ 1,800 from peso based investments (US$ 100,000) and are covering their monthly living expenses with that.
 

Also keep in mind that there are many places to invest or do your banking regardless of where you are living.  As a case in point, many of our clients in Mexico and as far away as Asia do some of their banking in the DR to take advantage of the higher US dollar rates.  

Similarly, many clients living in the DR might also do some banking or have investments in Austria, Costa Rica, Venezuela, Switzerland, the Channel Islands, and Ireland just to name a few.  So, it is very possible to be a citizen of the world, be diversified and take advantage of the best places for returns on your money.

While many people often travel to visit relatives, some of our clients often travel to visit their money (which might even be a better reason at times).  Keep in mind that many countries offer tax-free banking incentives for foreigners only and or local citizens as well.  In this regard, this might be another reason for searching out a financial home, which could be different from your physical one.
 

The second step might be the investigation of residency requirements or programs for where you want to live.  The question then becomes which county offers the best process or program with respect to becoming a resident and or citizen?  Once again, many clients have chosen the Dominican Republic, but there are a number of places to consider - each with their own set of requirements.   

In comparison to places such as the Turks & Caicos, which requires an investment of US$ 250,000 into the country (real estate or other) just to become a resident, the Dominican Republic process can be much less cumbersome than many other Caribbean Islands (and less expensive).
 

Like any country looking to attract new and good residents (and citizens), the Dominican Republic department of immigration asks that clients provide a number of things, which are as follows.  One is a letter of good conduct from their local police department, to prove the client does not have a criminal background.  

The other is a requirement that the applicant take a local medical exam, to offer proof that the applicant does not have a disease which could effect the other locals in the population or have a drug dependency problem (Aids, Tuberculosis, and drug usage is what is screened for).  

On the subject of illegal drugs, it should be noted that the Dominican Government has no tolerance at all for drugs, and you will not find drugs for sale the way I have in places like Jamaica or Antigua. So, if this is your cup of tea, forget about the Dominican Republic as a place for you.  

Regardless if you are a tourist, a foreigner or a local, they will lock you up and throw away the key.I mention this because some people have asked, and my reply is that the Dominican Republic, in many respects, is much more free and libertarian than North America, but they do not tolerate any nonsense either.

The other main requirement or part of the residency process in the Dominican Republic involves what is termed economic solvency, and is the part most clients are confused about.  To explain economic solvency, the department of immigration looks for an investment or assets inside of the country of RD$ 500,000 Dominican Pesos, which is equivalent to about US$ 31,000.  

The interesting thing is that this requirement is very open ended in that it can be demonstrated in a number of ways.  This includes opening of a local bank account or brokerage account, purchase of real estate, or the demonstration of a business investment as well.  There is no requirement that a client specifically place money into any particular type of investment or asset. 

 In addition, such money or investment always belongs to the client.  The Dominican Government simply wants you to demonstrate you have some funds to support yourself, and are solvent.  In this regard, we of course assist clients with local banking introductions as part of our services and also assist with such things as the formation of locally incorporated company (should the client wish as well).

I mention this because some people have asked, and my reply is that the Dominican Republic, in many respects, is much more free and libertarian than North America, but they do not tolerate any nonsense either.  

While the Dominican Republic does not have an economic or instant citizenship program as some other countries do, the process for residency is very straight forward, is less cumbersome or expensive that other jurisdictions, and does offer the client to apply for naturalization and citizenship later on. 

 In addition, while non-citizens do not have the opportunity to vote in local elections, legal residents do have all the other rights of local citizens.  Which include the right to legally live and work in the country, open a business, and own property or real estate (in fact non residents may own real estate as well).
 

Another major consideration or question is what do I do when I get there?  In other words, what kind of leisure or even business activities are available?  This is quite frankly, another key point to look at when deciding on a place to relocate or retire.  In the case of the Dominican Republic, the country is located on the second largest island in the Caribbean, offering beaches, mountains, golf, sport fishing, boating and a host of other similar things.  

The country's largest city and capital, Santo Domingo, offers modern shopping malls, movie theaters, concerts, ballet, theater, and pretty much everything you might expect to find in a modern city.

If your concern is business opportunities, it is interesting to note that the country offers one of the largest collections of duty free and tax-free business zones or compounds in the world.  Some clients have sought to set up both service and manufacturing businesses, such as travel agencies, order fulfillment, jewelry manufacture, perfume and leather hand bags (mail order), and a host of other things. 

 Operating your business inside of one of these zones or compounds offer an exemption on duty or import taxes and the opportunity to earn business income 100% locally tax-free.  Should you wish to explore opportunities in the local market, equally interesting is the fact that the country had one of the fastest growing economies in Latin America.