Santo Domingo, Republica Dominicana

Structuring Real Estate Investments in The Dominican Republic

By Alfredo Guzmán Saladín, Guzmán Ariza, Attorneys at Law

During the present decade, the Dominican real estate market has been booming, along with the Dominican economy, which has grown at close to 6%, the highest in the Americas.

Several statutory incentive laws make it attractive for foreign investors to purchase property in the country. For example, Law 158-01 on Tourism Incentives, as amended by Law 195-13 and its regulations, grants wide-ranging tax exemptions to qualifying new tourist projects by local or international investors. The most common entity used by foreign real estate investors in the country is a local individually owned enterprise or LLC. Some, preoccupied by the complexities of reporting a foreign entity to the tax authorities in their jurisdiction, prefer to register their domestic entity in the Dominican Republic.

There are no restrictions regarding the structure or legal form of foreign investment in real estate. If it is duly incorporated and recognised in the jurisdiction where it was formed, entities can do business in the Dominican Republic upon registration at the Chamber of Commerce and Internal Revenue. As for Dominican entities, the law allows different types of commercial companies and corporations, all of which provide limited liability for its owners or shareholders.

There are other investment entities recognised under the law, such as business, limited, and per-share limited partnerships, but they are seldom used because they do not offer full liability shields to their members and are subject to the same tax treatment as the other entities. In 2011, Law 189-11 introduced local fiduciary vehicles as a holding option.

Dominican law does not recognise the concept of pass-through entities. Local and foreign entities are subject to the same tax regardless of their legal structure, with two exceptions: entities that have obtained exemptions under the Tourism Incentive Law and closed-end real estate investment funds approved by the Security and Exchange Superintendence.


Alfredo Guzmán Saladín

Alfredo Guzmán Saladín

GGI member firm
Guzmán Ariza, Attorneys at Law
Law Firm Services
Santo Domingo and six further offices throughout the Dominican Republic
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Guzmán Ariza is a top-ranked Dominican law firm, servicing clients through seven strategic locations around the country. The firm is customer oriented and offers a full range of legal services, earning the international reputation of being a respected and reliable law firm that produces results.

Alfredo Guzmán Saladín is Guzmán Ariza’s Partner Co-Chair of the real Estate and Corporate Practices. He is the premier real estate practitioner in Casa de Campo, as well as in Bávaro and Punta Cana, where he has acted as counsel to major developers in the construction ventures of the most relevant tourism investment deals in the country.


Published: Real Estate Newsletter, No. 11, Spring 2020 l Photo: QUISQUEYA IMAGESTOCK - stock.adobe.com

 

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