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Forming
An "Offshore Company" in the Dominican Republic
. Why the Dominican Republic May be The Ideal Choice for Some Investors. A Caribbean Vacation paradise that is also A Secret Tax Haven.
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Forming
An "Offshore Company" in the Dominican Republic
. Why the Dominican Republic May be The Ideal Choice for Some Investors. A Caribbean Vacation paradise that is also A Secret Tax Haven.
|
|
In
line with our preference for civil law jurisdictions, the Dominican Republic
remains another choice
for investors, especially if a client
wishes to take advantage of the many local real estate and investment opportunities
that can be found in this "undiscovered" island.
.When many people think about Offshore
Incorporations or Trusts, the Dominican Republic is one of the last places
that come to mind. To be sure, the Dominican Republic is not a traditional
tax haven as the Isle of Man, the Bahamas, Panama or some other jurisdictions.
Even so, that may be even more of a reason for investors to consider forming
a Dominican Company to protect their real estate or vacation property.
In addition, the Dominican Republic does offer investors Tax-Free Banking
and US dollar accounts.......at interest rates much higher than what is
available in Panama.
. .
Like any other strategy to protect your assets and gain tax advantages, the main goal of asset protection is the separation of personal property from the benefical owner. In other words, if your assets are not in your name, they cannot be taken away from you if a lawsuit arises or if someone wishes to attach your property for some reason. In essence you do not own the property, a completely separate entity does. Dominican civil law, in our opinion, often provides for a stronger legal backing (compared to some other common law jursidcitions) when it comes to certain types of possible assaults on your assets. Investors faced with a Divorce action, or other types of civil suits, will certainly find better protection under the Dominican Civil Law Court system. But this is not the only real benefit of a Dominican Company. Owning your Dominican Republic Vacation property, real estate or investments via an incorporated company also provides tremendous tax advantages. Title transfer tax can be reduced using certain strategies with a Dominican Company as the owner of your property. In addition, when it come time to sell your property, a savings on capital gains is also possible. . Articles of Incorporation - Like most jurisdictions, a standard document is drafted to indicate the company purpose, tenants, direction and officers. The company purpose can be as general or as specific as the client wishes. We suggest, as with all of our client incorporations, that the articles include such languange that gives the client complete and sole authority over bank accounts or company contracts. . Company Name - Since most foreigners are not aware of the Dominican Incorporation, you will not find many companies in the registrar that contain names in other than the Spanish Language. . We have, however, successfully incorporated company names in the English language for clients. All Dominican companies end with the denotation of C x A. This notation is uniquely used in the Dominican Republic, but just like the terms "Inc, Ltd. or S.A.", indicates that this is an incorporated company. As with other jurisdictions, clients must provide three choices of the company name to make sure that the desired name is not currently registered or in use by another incorporated company. . Authorized Capital - The authorized capital of the company must be expressed in Dominican Pesos and can be any amount the client wishes. For the purpose of initial costs, taxes and the annual registration fee, we suggest that the client form the company with the minimum required capital, which is 100,000 Dominican Pesos or less than US$7000 under current exchange rates. The authorized capital is indicated on the incorporation documents, but the client need not prove this amount via bank deposit or otherwise in order to complete the initial incorporation documents. . Stockholders or Founders - Unlike some jurisdictions, the Dominican company does require that seven individuals form the company. Usually, these persons are also the stockholders as well, but certainly do not necessarily have control. Since the majority of shareholders are required to be Dominican, this is accomplished for the client through the use of six nominee Dominican shareholders, with the client either acting the first dominant shareholder with 94% of the stock, or by the client's other offshore entity as the predominant shareholder. . Directors of the Company - The Dominican Company requires that three individuals are assigned to take the positions of President, Vice-President and Secretary. Usually we suggest that the client take the position of President, and as such is the only director who is duly authorized to sign on bank accounts or engage in other business on behalf of the company. We also suggest that a spouse or other trusted person be named as the Secretary for convenience of authorizing company resolutions (see the company seal or "Sello") . Company Seal or "Sello" - Each Dominican company must use a company seal, which only the secretary will use in conjunction with his or her signature to verify company documents or resolutions. We automatically obtain a company seal for the client when we create a corporation. . Tax Liabilities of the Company - Your Dominican company enjoys the benefit of tax free bank account or time deposit interest. Assuming the company is not engaged in any local commerce, no tax liabilites will be due other than the minimual annual registration tax, which is currently less than US$150 based upon the 10,000 Peso authorized share capital. If clients intend to rent out their property that is owned by the Dominican company, clients are advised to speak with us regarding strategies to eliminate a local taxable income possibility. A local accountant will be required to complete an annual tax statement or "Declaration de Renta" indicating that the company had no taxable income for the previous year. This can be easily accomplished and costs less than US$800 for this service. . An Incorporation can be done in the Dominican Republic for less than US$2,600. This includes our advisory fee, all incorporation taxes and fees, nominee directors, attorney and filing fees, registration and documents. All incorporation documents are turned over to the client including: the formal hard cover binding of the incorporation documents, two separate corporate resolutions permitting the client to establish bank accounts or conduct other business, the offical company seal or "Sello" and all other related documents as required. . |