Law 171-07 Regarding Special Incentives To Foreign Retirees And Passive Investors Of Non-Dominican Source

Author:Pellerano & Herrera
Profession:Pellerano & Herrera
  1. PURPOSE OF LAW 171-07

    As stated in the preamble of Law 171-07, "the Dominican State recognizes that the capital and currency contributions coming from abroad contribute to the development and general well being of the population, the economic activity and national production"; thus, it is an ongoing priority for the Government to take the necessary measures to allow the Dominican Republic to remain an attractive option to foreign investors vis-a vis other countries in the region.

    Pursuant to the provisions of Law 171-07, retirees and passive investors, as defined under Article 1 of said Law, are eligible to obtain the Dominican residency; and to that effect, they benefit from the expedited residency process created pursuant to Decree No. 950-01 that allows foreign investors to obtain the issuance of the requested residency card within a term of no longer than 45 working days.


    For the purposes of the law, the term investor shall mean "those individuals that benefit from steady and permanent income derived from capitals generated or located abroad by reason of any of the following: (i) deposits and/ or investments placed in banks outside of the Dominican Republic; (ii) remittances from foreign banks or financial entities; (iii) investments made in foreign corporations; (iv) remittances of payments related to real estate properties; (iv) interest paid in connection with securities, in national or foreign currency, with the State or its institutions, provided that the invested capital was generated abroad and the currency conversion is made at any financial institution in the DR; (v) interests, income or dividends derived from investments made in movable or real estate assets located in the Dominican Republic, provided that the capital invested was generated mainly abroad.

    Those individuals who qualify as retirees or investors under Law 171-07 may benefit from the following exemptions:

    1. Real property transfer taxes for the first property acquired.

    2. 50% of the Mortgage Registration Tax, if the secured creditor is a financial institution subject to the regulations enacted pursuant to the Monetary and Financial Law.

    3. 50% of the Real Estate Property Tax.

    4. Taxes on dividends and interest payments, regardless of the source (Dominican or non Dominican source).

    5. 50% of the capital gain tax (provided that the investor is the majority shareholder of the company that is liable for payment of the tax and if the main...

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