LEGAL PROCEEDINGS The legal framework for the real estate procedures in the Dominican Republic is the new Law No. 108-05, of Real Estate Registry. The ownership of a property is acquired through a process that includes the sign and registry of the Sales Contract among other documents and Certifications require by the Title Registry Office and the payment of the Real Estate Transfer Tax. After reviewing the deposit file, the Title Registry Office canceled the former Title of Deed and dispatch the new Title of Deed, which represent the ownership right of the new owner. Among the principal proceedings for the real estate acquisition: Due Diligence Each national citizen or foreigner investor that would like to acquire a real estate under the Dominican Republic Territory first should proceed with hiring a lawyer for the research of the legal status, tax and fiscal risks of the select properties (taxes up to date, loans, burden, mortgage or encumbrance, litigation, opposition, real ownership, etc). These proceedings will take place before the Title Registry Office, the Local Internal Revenue Office and with the assistance of a surveyor (Cadastral and parcel localization, real meters quantity of the property). This step is finalized with the approval of the lawyer and his surveyor, before both have obtained and verified the related certifications and the gather information. Drafting and Negotiation of the Agreements and Contracts for purchase the properties. Subsequent to the buyer have the certain that the investment to purchase the property is secure, and the Negotiation on price, payments are set, the lawyer proceed with the drafting and signing of the Contracts between the parties. At first instance, and if the buyer wants, it could be prepare a Promise Sale Agreement or Purchase Option Contract, finally when the Promise Sale Agreement conditions are over, is time for the Final Sales Contract. The Buyer has the option to do this final Sales Contract from the first beginning of the real estate acquisition transaction, eliminating the option of the Promise Sales Agreement. In all moment of the negotiation and Contract drafting, the lawyer must protect his client’s interest. Real Estate Transfer, Request Documents and Certifications Compile, File Deposit With the purpose of transferring the property and to obtain the Title of Deed on behalf of the new owner, it must be deposit an inventory of documents and certifications required by the Title Registry Office of the corresponding Jurisdiction. Both, Seller and Buyer should dispatch a list of documents in order to complete the file. The other required documents and certifications must be obtained by the lawyer, in the different publics entities. The list of documents will change, depending of if a company is involved representing the Seller or the Buyer or both. Some of these documents are: 1. Title of Deed original. 2. Final Sales Contract duly signed and legalized. 3. Receipt of Payment for the corresponding taxes or the Tax exemption certification. 4. Copy of Identification documents of both parties. 5. In case of a company, Assembly approving the sale or the purchase (depends on the case) of the property. 6. Tax’s payer Registry. 7. Among others. The lawyer will compile those documents and give the duly follow up for the emission of the Title of Deed. Title of Deed’s on behalf of the new owner. The Title Registry Office of the corresponding Jurisdiction, after reviewing the complete file deposit by the lawyer, will canceled the previous Title of Deed and will Release the new one on behalf of the new owner, which could be a person or a Company and will represent its ownership rights. Finally the lawyer conveys the Title of Deed to its client. Purchase of Real Estate by Foreigners No restrictions on foreigners. Dominican Republic, paradise for retirees, pensioners and annuitants. New Law no.171-07 on special incentives to pensioners and annuitants of foreign source.
Investing in the Dominican Republic could be a dream come true; with the enactment of the said Act, the Dominican Republic granted increases incentives for foreign investment, becoming one of the countries with stronger incentives for pensioners, retirees or annuitants of foreign source. This law offers numerous benefits for those who come to settle and invest to our country. Pension or retirement: Those who are retired or pensioner, receiving a monthly income for a pension or retirement of a government agency or private company of foreign origin, who have declared their intention to relocate his definitive residence to our country and eventually receive the benefits of his pension or retirement in the Dominican Republic. Annuitants: Those who enjoy a stable and permanent annuity, whose principal source is generated from outside or by any of the following reasons: 1. Deposits and/or investments in banks abroad; 2. Remittances from banking institutions or foreign financial; 3. Investment in companies established abroad; 4. Remittances provide by real estate; 5. Interest earned on certificated issued in foreign currency generated abroad, who are in financial institutions legally authorized to operate in the Dominican Republic; 6. Profits earned by investments in certificate issued in foreign currencies and / or national level, with the State or its institutions, provided that the capital has been generated abroad and carried out the changeover in any financial institutions in the country; 7. Interest, dividends or income from investment securities or property held in the Dominican Republic, whose principal has been generated or accrued mainly abroad. Benefits and exemptions granted by this Act:
• Investment Residence Program, set up by Decree No.950, September 20, 2001, allowing foreign investors to obtain permanent residence within 45 days;
• Law No.1493, August 26, 1993, Customs Tariff on the Dominican Republic, which exempts from taxes to furnishings Household and personal property;
• Law No.168, May 27, 1967, on Partial Tax Exemption of Motor Vehicles.
• Exemption from taxes on real estate transfers, for the first property acquired;
• 50% exemption of taxes on mortgages, when the credit financial institutions are satisfactorily regulated by the Monetary and Financial Law;
• Exempt 50% of property tax, if this applies;
• Exemption of duties on the payment of dividends and interest generated in the country or abroad;
• Exemption of 50% tax on capital gains, if the annuitant is the majority shareholder of the company and is subject to the payment of this tax and the company must not be devoted to commercial or industrial activities. Minimum Amount Pension or Monthly Income: The pensioner will receive a monthly income of no less than One thousand five hundred dollars (US$1,500.00) and the annuitant shall receive a monthly amount corresponding to two thousand dollars (US$ 2,000.00) or its equivalent in national currency. In the case of annuitant, they will have to prove that they receive a permanent and stable revenues generated or from abroad, for a period not less than five years, through a copy of the Contract properly translated into Spanish by a authorized interpreter, legalized by the Dominican consulate in the country of origin of the document. As well, must submit receipt of income from foreign currency into the country through a copy of a check (s) or transfer announcement from a financial institution established abroad. | Text Provided by Luciano & Nunez, Attorneys At Law Dr. Janelle Luciano Núñez
Mobile: (809) 854.1847
Email: janelleluciano@gmail.com | Top |