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If you are considering relocating
to another
country or if you are simply seeking out second citizenship options,
the
truth of the matter is that the Dominican Republic may be one of the
last
places that comes to mind. However, this not so small Caribbean
nation
(population about 8.5 Million) located just 3 and ½ hours by
plane
from New York and 90 minutes from Miami, with plenty of direct
international
flights to Europe and parts of South America, might be just the
destination
you have been looking for. There are of course many reasons to
consider
the Dominican Republic, as a second residence, retirement destination
or
relocation destination, and we will highlight some of those reasons
very
briefly here for you as we go along. However, one of the reasons
that
many people also seek out the Dominican Republic is the quick and
uncomplicated
process both for legal residency and eventual citizenship as well, so
this
topic specifically is the heart of what we wish to principally discuss
for
you also.
.
In regards to the idea of the
Dominican Republic
as a relocation or retirement destination, it certainly is true that
the
country offers some of the most affordable real estate in the entire
Caribbean.
This is especially true when you begin investigating the costs for
apartments
or homes in places such as the Bahamas, Bermuda, St. Martin, Aruba,
Turks
& Caicos Islands, etc. If seeking a second home close to the
beach
or a brand new luxury apartment in the modern capital of Santo Domingo,
it
is not difficult to realistically find either one in the US$120,000
range
for something in the upper end real estate category. In
comparison,
if you have ever attempted to shop for real estate in some of the other
Caribbean
Islands, you will quickly realize what a bargain this is.
.
Another interesting and important
point is
that bank account interest is also Tax-Free for residents or
non-residents
alike. The fact that one can earn up to 10% in US dollar
investments
or up to 24% on deposits in the local currency, the Dominican Peso,
means
that an early retirement income derived from banking investments is a
reality
and not just wishful thinking. As an example of this idea, this
of
course means that it is very possible, should you have US$300,000 in
liquid
assets as an example, to buy a home for cash, put some funds into Peso
investments
with the idea of actually living off your bank account interest (try
doing
that in North-America these days), and invest the rest into some
quality
mutual funds or whatever else you might like. Even if your means
are
more modest, having a monthly pension or income of US$2,000 per month
affords
a very comfortable upper middle class lifestyle in the Dominican
Republic
as well. And if you are concerned about modern conveniences,
access
to shopping or leisure activities, you should not be. Tony
Roma’s,
Outback Steakhouse, The Gap, Radio-Shack, Price-Smart, Carrefours (one
of
the largest supermarket chains in France, offering a number of European
food
products), brand new movie theaters with the latest films in English,
Robert
Trent Jones designed golf courses, and modern medical facilities are
all
here for you as well.
.
However, aside from some very
attractive
reasons to consider living in the Dominican Republic, as we hinted at
earlier,
the country offers a very simple and uncomplicated process both for
residency
status and naturalization (citizenship and second passport) also.
Before
we dive into this theme though, there are some initial questions that
some
people may have, such as: Why would someone be interested in going
through
a process for residency status or even a second citizenship? Is
this
legal? What are the benefits?
.
For most people, it would seem
the reasons
as to why someone would consider a second legal residency or even
citizenship
has to do with taxes, banking or investments, and personal safety,
usually
in that order. On the taxes issue, chances are that if you
currently
reside in Europe, your personal and corporate income taxes could go as
high
as 65% or more. If you live in the United States or Canada,
perhaps
things are not so bad tax wise in comparison to the Europeans, but
there
is a good chance as well that when you calculate both income taxes and
social
welfare taxes (social security and things like unemployment insurance,
etc.)
you are paying close to 50% also. So relocating to another
jurisdiction
might be a matter of legally opting out of the current high tax state
you
live in at the moment. How so? Well, for Europeans and
Canadians
especially, citizens of such jurisdictions can declare themselves
legally
non-resident for tax purposes. Meaning, if you can prove that you
are
legally resident someplace else, most European governments will allow
you
to check out, so to speak (without giving up your citizenship, which is
another
matter). The logic behind this is, if you are no longer living in
your
previous home country, you are not using the various government
services
you would otherwise pay taxes for and use, and therefore you should not
have
to pay for something you are not using. This makes sense to me
and
many other people as well, but that reality is unfortunately different
for
Americans. However, there is a bright spot in that Americans can
exempt
up to about US$80,000 or so (this figure is indexed up each year) if
such
a person is both living and working outside of the US. So, again,
if
Americans can prove they are legally resident elsewhere and drawing a
salary
from work done outside of the US as well, then there is a tax savings
in
terms of salaried income (tax exempt up to the amount indicated).
In
either case, having proof of a legal residence status elsewhere can
certainly
allow for a tax savings, especially if the new residency is from a
country
with low or no taxes.
.
On the topics of banking and
personal safety,
it is very sad but true these days that Americans especially have a
difficult
time establishing a bank account, brokerage account or other kind of
investment
(mutual funds) outside of the US as a US citizen. Why the
difficulty?
Well, it certainly is very legal for a US citizen to own a bank account
or
investment account outside of the US (in terms of US tax laws or
regulations).
In addition, it is very legal in most countries for foreigners to
establish
accounts as well. The problem then is not the legality of it, but
rather
the internal policy of many banks or investment firms. Meaning,
many
such firms will not accept US citizens as clients because they do not
want
the aggravation of being harassed by the US tax authorities (which is
really
what this is all about). So, they simply do not accept US
citizens
as an internal policy. However, the answer is, why not become
something
other than a US citizen? Obtaining a second citizenship is
perfectly
legal for Americans and for many other nationalities as well (which is
also
true for the Dominican Republic). In this regard, Americans who
are
not Americans, or we can say, can provide something other than a US
passport
as a legal identity document (such as a passport from another country)
can
get around this problem.
.
The personal safety issue, while
perhaps
not always as compelling as first two for the vast majority of people,
certainly
weighs heavy on the minds of many American travelers as well.
Many
American travelers going into areas where Americans are not warmly
welcome
often promote themselves as Canadian instead (although when it comes
time
to produce a Canadian Passport, then the little white lie is
revealed).
So, for this reason, the idea of having an identity and perfectly legal
travel
document from someplace else - may help you avoid danger and in the
most
extreme cases, perhaps even save your life.
.
So, now that we have briefly
discussed the
reasons why someone would consider seeking out a second legal residency
or
citizenship, let us take the time to discuss why the Dominican
Republic?
While there are very few countries offering what are called instant
citizenship
or economic citizenship programs these days, certainly every country
has
a process allowing you to become a legal resident, and eventually at
some
point in the future, a citizen (entitling you to a passport). And
this
is true when it comes to the Dominican Republic, and a long list of
other
countries. However, the real difference might be the costs,
requirements
and waiting time. Stated another way, it is not a question of
whether
or not you could become a legal resident or citizen in another country,
but
rather how difficult or how reasonable this process might be. It
is
with this theme especially that the Dominican Republic stands out head
and
shoulders above many other jurisdictions and why many of our clients
have
elected to call this wonderful island nation their second home.
.
THREE
STEPS TO CITIZENSHIP
AND A PASSPORT:
.
FIRST STEP: Provisional Residency
.
The initial process is of course
the application
for legal provisional residency first. In this regard, there is
of
course a list of requirements to meet, but they are fairly simple to
comply
with for most people. One such requirement is the medical exam
that
MUST be taken inside the country with the medical doctor at the
Department
of Immigration. While this sounds somewhat daunting, it is not,
and
in fact the entire process can take less than two hours (including time
waiting
your turn). A very brief interview is conducted, asking the
applicant
some standard questions (have you had any surgery in the last five
years,
do you take any prescription medication, etc.) In addition, a
urine
sample, a blood sample and chest x-ray is taken. What they are
looking
for is Aids, illegal drug usage and tuberculosis. Providing you
have
none of these ailments, you will pass with flying colors.
.
The next step is the deposit of
the residency
application itself, including all supporting documentation such as
copies
of current passport, certified or official copies of your birth
certificate
(you will not get this back, so it is a good idea to keep some extra
sets
before hand) and a police letter of good conduct from your local police
department.
In addition, immigration also looks for what is called economic
solvency
in the amount of RD$500,000 pesos at least. What does this
mean?
Well, it simply means that they want you to demonstrate that you are
not
destitute and have assets of some kind inside the country.
However,
the way to demonstrate this is very open ended and RD$500,000 is
equivalent
to about US$15,000 under current exchange rates. So, it could as
simple
as opening a bank account (which can be maintained in US dollars as
there
is no requirement that you need to convert your fund to Pesos), or you
could
demonstrate a real estate purchase, business investment or even utilize
a
locally incorporated company as well.
.
In addition to the above, an
Interpol background
check is completed by the national police and often enough, this is the
most
time consuming process of all. However, assuming you are not
someone
wanted by Interpol, you will not have a problem and this background
check
not a concern.
.
Once the residency application
file is deposited,
it has been the case that immigration has processed such applications
fairly
quickly and as such you can expect to obtain your initial provisional
residency
card (valid for one year) and your initial Cedula card (also valid for
one
year) within 60 to 90 days. With such documents in hand, you can
legally
live and work inside the country and have all the rights of a citizen
with
the exception of voting privileges (only citizens can vote in local
elections).
In addition, this puts you on track towards eventual citizenship, or we
can
say starts the clock ticking.
.
SECOND STEP:
Permanent Residency
.
Once the one-year time frame for
the provisional
residency has passed, the above process is repeated once again exactly
as
explained, with the purpose of renewing and actually changing your
status
to Permanent Residency. So, it is the case that you would visit
immigration
once again, take the medical exams indicated once again, etc.
However,
the good news is that this second card from immigration is valid for
two
years and the second Cedula card for six years, so there is a longer
time
frame for expiration accordingly.
.
Why the process of one year
provisional residency
first and then permanent residency after that? Well, just as
anywhere
else, the Dominican Government wants to make sure that applicants have
demonstrated
themselves to be law abiding citizens and have a put a window of time
in
for that purpose.
.
THIRD STEP:
Becoming a Citizen (and gaining a second passport)
.
The application for
naturalization (to become
a naturalize citizen) is prepared and deposited ONLY after an applicant
has
obtained Permanent Residency Status. Some clients that come from
countries
that prohibit dual citizenship (Holland and Germany are two examples)
may
elect to stay with Permanent Residency status and not move forward with
naturalization
out of fear of losing their previous citizenship and passport.
However,
most countries recognize and accept dual citizenship, including both
the
United States, and the Dominican Republic.
.
The entire Naturalization Process
takes about
5 months to complete. All told, there is not much for the
applicant
to do, other than to find a very competent attorney to assist with the
file
preparation and related certifications that must be obtained. In
other
words, quite a bit of paperwork goes into the application, and of
course
the file is passed through a number of government offices and
channels.
Since the President of the Dominican Republic signs off on all
naturalizations
via decree, part of the process involves the applicant’s file passing
through
the President’s office as one of the final phases.
.
What does the applicant need to
do?
Well, there is one requirement that the applicant make himself or
herself
available for a brief interview. Basically this would happen
about
two to three months from when the file was deposited, but all depending
on
fast things move along, it could be sooner than that. In any
event,
the applicant would be asked to demonstrate knowledge of the country
and
some basic historical facts (name the major cities and airports, name
the
founding fathers, name the date when the constitution was signed,
etc.).
Once the interview has been successfully completed, the only other
visit
requirement is for the swearing in ceremony, usually officiated by the
Chief
of the National Police or the Vice-President (whom ever is
available).
This ceremony is held once a month with all the other new citizens
gathered
together as a group, immediately following the date the applicant’s
naturalization
is signed by the President. In fact, technically speaking, you
would
be a citizen once the President makes you one via decree, but this last
formality
still exists and you are required to be present for it. However,
after
attending the ceremony, your naturalization documents are completed and
certified,
allowing for you to apply for a passport (which takes approximately one
day),
and apply for your new Cedula Card as a citizen (which would take
approximately
45 days).
.
In summary, every
country has some sort of
process for becoming a legal resident and hopefully a citizen in the
future,
but the difference is of course the time you must wait to do so and
perhaps
whatever other requirements as well. In comparison to many other
countries,
the process in the Dominican Republic is fairly uncomplicated and
reasonable
for most middle class people. In contrast to this, for places
such
as the Turks & Caicos or Bermuda, a sizeable real estate purchase
is
required in those jurisdictions (US$300,000) and it is very difficult
to
gain citizenship. In Ecuador, you are required to renounce your
existing
citizenship if you wish to become a citizen of Ecuador. So, the
point
is, you should of course investigate a number of countries, but after
you
do, chances are you will find that the Dominican Republic is an
excellent
option.
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