dominican republic

Applying For Residency and Citizenship in The Dominican Republic

Why Choose The Dominican Republic?


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republic residency applicationIf 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 10 Million as of 2014 statistics) 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 less costly 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 a higher end one bedroom condo (with elevator, door man, etc.) in the US$115,000 range or perhaps anywhere from US$145,000 up to about US$200,000 for a 2,500 square foot 3-bedroom condo in the more upper end real estate category (a building with elevator, off street secured parking, reception area with door man, etc.).  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 - especially when you consider some of the amenities or size assuming you find something

similarly priced elsewhere.

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Another interesting and important point is that many local banks in the Dominican Republic offer accounts in US Dollars, Euros, the Dominican Peso (which is the local currency) and perhaps soon accounts denominated in the Chinese Yuan Renminbi (the Central Bank of the Dominican Republic has already started a pilot program in 2014 with this currency).  One can receive wire transfers in the previous mention currencies and also deposit checks drawn in these currencies as well.  Interest rates have come down in terms of traditional retail banking products (Savings Accounts, Certificates of Deposit) in comparison to previous years, but one can expect about 4 percent for Peso Savings Accounts and up to about 8 percent for Peso Certificates of Deposit.  However, in terms of Government Bonds and Commercial Paper, investors can expect up to 5 percent for US Dollar denominated Commercial Paper and up to 10 percent for longer-term Peso denominated Government Bonds (longer term meaning 7 years).  With that said, should you consider investing your funds in the local currency (all of your local utility bills and other living expenses would be calculated in Pesos) this could mean that an early retirement income derived from 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 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 equivalent to US$2,000 per month affords a reasonable middle class lifestyle in the Dominican Republic. 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.  In fact quite a few American retail chains and food chains have been opening new stores throughout 2013 and 2014.


However, aside from some very attractive reasons to consider living in the Dominican Republic, as we hinted at earlier, the country offers a less costly process both for residency status and naturalization (citizenship and second passport) in comparison to some other jurisdiction.  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$97,600 as of 2013 (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 inmost 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.




Which Dominican Republic Residency Category?



Many people are confused about the various residency categories in the Dominican Republic and do not always know which is the best way to apply.  And of course coupled with that, what kind of residency status you may have eventually could also determine both the waiting time and filing requirement for citizenship in the Dominican Republic (should you desire a second passport).  But before we go any further, it is very important to note that the Dominican Republic does fully accept and recognize dual citizenship.  At no time will any applicant be asked to renounce previous citizenship in order to obtain residency nor citizenship (and a second passport) from the Dominican Republic.


In terms of the different application avenues, there is no investment requirement for those clients wishing to pursue the ordinary residency process, but Qualified Investors DO benefit from a faster track citizenship application process.  To contrast this with other jurisdictions offering what is called instant or economic citizenship, some programs elsewhere may cost US$70,000 (or more), or require a US$300,000 (or more) investment in real estate – and such programs may still take perhaps 6 months or more to complete anyway.  However, in the Dominican Republic, clients have the opportunity to pursue a process that costs less than US$25,000 – which is less than ONE THIRD the cost of some processes in other countries - IF your interest is naturalized citizenship fairly quickly after applying for residency.  Of course the difference the process in the Dominican Republic and some other jurisdictions is going to be the time line, but if a process that allows you to obtain citizenship and a passport in less than two years combined with a third of the cost of some other countries (or maybe even more of a savings) is appealing to you, then the Dominican Republic is one of your options.


Ordinary Residency Application: Provisional Residency Is The First Step



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 proof of a local bank account.  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 (initially 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.


However, there have been some changes to this process with regards to when you can apply for naturalized citizenship as an ORDINARY RESIDENT.  Under the recent legislation passed in 2011, applicants would continue to renew and hold PROVISIONAL residency status for 5 years.  Once the 5 years have passed, then at that time the applicant can change their status over to PERMANENT RESIDENCY.


Ordinary Residency Application: Permanent Residency Is The Second Step



Once the five-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 Permanent Residency card from immigration is valid for two years and the second Cedula card for two years as well.  Once the applicant has completed two years of Permanent Residency, then at that time they can apply for Naturalized Citizenship. 



Qualified Investor Residency Application: Permanent Residency Is The First Step


In 2007 a formal law was created incorporating both the retiree program that previously enacted or out into place by Presidential Decree, and some additional categories were added on as well, notably that of a Qualified Investor.  These categories falling under the same special law are:

A. Pensioner or Retiree – With a fixed Monthly Retirement Income, Pension or Annuity.  B. Independent Investor – With Proof of Monthly Income coming from any investment or non salaried source (meaning bank account interest, brokerage accounts, rental income, royalties, etc.).  C. Lump Sum Investor – With Proof of a local investment of US$200,000 (or equivalent in another currency) in local financial instruments, real estate, business enterprise, etc.

In order to qualify for this special status regardless of A, B or C, there is NO age requirement (as is the case in some other jurisdiction if applying as a pensioner or retiree), with obviously the time line of eligibility for naturalized citizenship application shortened down to 6 months from the date your investor residency card is issued.  One of the positive aspects however is that unlike in some other jurisdictions, there is NO requirement for the applicant to invest in real estate, although you are welcome to do so should you wish – and keep in mind that this will allow you to file for naturalized citizenship under that qualifier.  Also, the Dominican Republic has been and still is a real estate investor's paradise because per square foot, you will get more for your money in the Dominican Republic compared to just about any place else in all of the Caribbean (from basic properties up to luxury condominiums or homes).  In fact, over the past 10 years, many of our clients have already doubled their money in some cases with regards to real estate investments – and are still buying now in 2014 because real estate holdings are a hedge against inflation and possible devaluation of the US Dollar – AND is still reasonably priced compared to similar properties elsewhere (compared to St. Martin, Bahamas, etc.).

But not only that.  Persons applying under the above mentioned special investor residency process also can obtain a reduction on title transfer taxes for their first real estate purchase, AND annual real estate taxes are quite low in general compared to the US, Europe, etc.  In terms of annual real estate taxes in the Dominican Republic : You can expect to pay one (1) percent of the property value, calculated for the amount over and above US$100,000 (real estate valued at the Peso Equivalent of US$100,000 and below is tax-free in terms of any annual real estate taxes).

In terms of some general real estate information and how it relates to the application process (for residency and citizenship) - there is no specific or fixed amount they are looking for or  requiring in terms of a real estate purchase, so it is up to you what  you might consider.  Real estate in Santo Domingo or Santiago will be less expensive than  property in a tourist area such as Juan Dolio or Punta Cana.  With  regards to Santo Domingo, you can find a higher end 3 bedroom condo  (in an upper middle class area) ranging from say US$145,000 for a  1,400 square foot property up to US$250,000 for maybe a 2,400 square  foot property - and everything and anything in between.  Outside of Santo Domingo, there is a builder doing Swiss chalet style vacation properties in the mountain area of Jarabacoa (new construction) for about US$125,000.  In addition, you can get a 2 or 3 bedroom townhouse condo in Punta Cana – Bavaro for about US$125,000 but  it will be smaller (about 1,200 square feet or so).


Information About Getting Started:

Regardless if you intend to apply as an ORDINARY RESIDENT APPLICANT or QUALIFIED INVESTOR APPLICANT, immigration has started to insist as of June 2012 that potential applicants obtain a special residency visa from their nearest Dominican Consulate as the first step (the second step would be a visit to the Dominican Republic to start the actual process with immigration).  You should be aware that this is NOT a new law or requirement, but rather one that has been in place for many years.  However, The Dominican Department of Immigration did not enforce this provision previously, that is until they started doing so in June of 2012.  So, we can call this visa in your passport the first step in the process, and then the actual filing process with the Dominican Department of Immigration in Santo Domingo as the next part of the initial residency process.



Application For Naturalized Citizenship In The Dominican Republic


The application for naturalization (to become a naturalize citizen) is prepared and deposited ONLY after an applicant has completed the required Permanent Residency period.  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, although most countries recognize and accept dual citizenship, including both the United States, and the Dominican Republic.

The entire Naturalization Process can take up to 10 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 grants Naturalized Citizenship via Presidential 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 30 to 60 days 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 three business days), and apply for your new Cedula Card as a citizen.

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 high value 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.