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Offshore
Banking
About
Using
Offshore
Trusts
The
Bahamas
Dominican
Republic
Forming
a Panama
The
Panama Offshore
Is
it Better in
Investing
With
About
Y2K
The
Premium
The
Stock Exchange
Dominican
Republic ~Secret Tax Haven
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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. 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. 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 advanteages.
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 10,000 Dominican Pesos or less
than US$700 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.
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$200 for this service.
An Incorporation can be done in the Dominican Republic for less than US$2,000. 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. |