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.
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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$100,000 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.
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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 9% 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.
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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?
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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.
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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.
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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.
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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.
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THREE STEPS
TO CITIZENSHIP AND A PASSPORT:
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FIRST STEP:
Provisional Residency
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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.
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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$17,000
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.
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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.
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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.
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SECOND STEP:
Permanent Residency
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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.
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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.
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THIRD STEP:
Becoming a Citizen (and gaining a second passport)
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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
naturaliz, although as of late 2004 there are political rumors that
they may change) 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.
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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.
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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).
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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. |
