6 key to retiring to the Dominican Republic


Retiring to the Dominican Republic can be a cultural epiphany if you’re seeking exotica. But without realistic expectations and careful planning, your move abroad could be fraught with frustration.

Even mundane tasks like opening a bank account or getting a plumber to fix a leaky sink could take ages for people used to getting things done quickly in the U.S.

“It’s vitally important to relate your pace to the culture.

Before taking the expatriate plunge, spend a minimum of several weeks in a country immersing yourself in the local culture and honing your foreign language skills, experts say.

Research your newly adopted country’s health care system and tax laws. Make a good assessment of your cost of living. Such preparation will smooth out your transition, helping you avoid potentially costly pitfalls.

Rabbit International Relocation Services located in the Dominican Republic can help you with information or at least point you in the right direction. 

info@rabbitinternational.com The following are six issues to consider before retiring abroad.

6 issues for expatriates

1. Cultural concerns
2. Land ownership issues
3. Health care needs
4. Tax considerations
5. Banking logistics
6. Packing decisions

Cultural concerns

The potential for “culture shock” tops the list of things to consider before retiring overseas.

You can enjoy the experience of discovery without having to mimic the characters depicted on wilderness survival shows — chomping on live grubs and the like — to fit the bill. But it helps if you’re open-minded and love exploring new places.

Flexibility goes a long way, too.

“You have to have the patience to deal with different systems, and if you’re an American who doesn’t know the language, everything is going to take you 50 percent longer.

People who retire abroad are usually seasoned travelers who’ve spent a significant amount of time “on the ground” in a particular country.

Many people retire abroad to save a lot of money and enjoy the good life for less — both valid reasons. But shouldn’t expect to recreate an American lifestyle.

“If you like to eat your early bird special at 5 p.m. and in the Dominican Republic locals don’t eat until 10 p.m., you might feel a little bit strange or you might have to find another way to eat.

Common traits of expatriate retirees:

• Desire a lower cost of living but a higher living standard.
• Want better weather and scenery.
• Appreciate a laid-back lifestyle.
• Have an interest in learning about new cultures.
• Have friends or family already living abroad.
• Adapt to cultural differences.

Land ownership issues

Maybe you’ve found your Shangri-La and are considering buying a home there. Before plunking down a huge deposit on a Dominican villa or beach front condo, try renting first.

If possible, rent for more than one season. This gives you a better feel for the climate, how much utilities cost and what your community is like once the tourist crowd has evaporated.

Check currency conversions and local infrastructure as well. Bad roads can be a fairly common occurrence and not best for BMW’s suspension.
To find a good rental property, go to your chosen location for a few weeks, talk to people in the local expatriate community and try to develop local contacts.

Before making an overseas purchase, hire a lawyer to represent you — and you alone — in any real estate transaction.

Most foreign real estate documents are not written in English, and rights of ownership vary from country to country.

“People fall in love with a house and the idea of it, and they buy it without having the background on the legal tax and estate ramifications. “You need to consult a legal adviser who understands these issues before making a major investment like buying a house.”

When buying property in any foreign country, it’s important to buy from an established real estate firm (The Dominican Republic does not have an equivalent to the Multiple Listing Service system used in the United States) and to make sure you get good English translations of all documents.

“A good lawyer working for you in a foreign country will speak English.

Health care needs

Santo Domingo has the largest number of private hospitals and clinics in the country. You will need to know what to expect from its health care system. Is it modern? How far will you have to travel for basic medical services? Are prescription drugs widely available? Again JDL Relocation Services can help provide you this information. info@juandolioliving.com

Make a thorough assessment of your own health and determine whether you’ll need access to specialists or other kinds of medical care not commonly available outside the U.S.

Medicare will not pay for services or prescription drugs in a foreign country except under very specific scenarios.

Several health care facilities boast that a number of procedures are comparable to that found in the U.S. — and often at lower cost.

Americans hoping to maintain a youthful appearance were among the first to discover the quality of health care available in the Dominican Republic.

Check your private health plan, if you have one, to see if any services are covered overseas.

While the Dominican Republic has some good medical facilities you may want to consider returning to the U.S. periodically for major services.

Tax considerations.

Generally, if you are a U.S. citizen or resident alien, you’re required to file an income tax return whether you’re in the U.S. or abroad, according to the IRS.(A resident alien is a person granted permanent legal residency in the United States as an immigrant. You generally have this status if the U.S. Citizenship and Immigration Service has issued you an alien registration card, also known as a “green card.”)

If you earn income abroad, the IRS may allow you to exclude from income up to $87,600 off your foreign earnings.

What about Social Security?

• U.S. citizens can have their Social Security retirement checks mailed overseas or directly deposited into a foreign financial institution in certain countries. For a list of eligible countries, check the Social Security Administration Web site. The best bet is to have your benefit check directly deposited into a U.S. bank account that you can access overseas.

• Expatriate retirees should hire a financial planner with cross-border experience. If you don’t, you could be putting your retirement nest egg at risk by paying unnecessary taxes. You also risk running afoul of federal tax law.

• “You have to have someone who is familiar with the tax treaties because once you get outside the U.S., that becomes almost 80 percent of the battle in preparing a tax return.

• If you think you can cash out your retirement account and avoid paying U.S. taxes by renouncing your citizenship, think again.

• The tax regime for high-net-worth expatriates who renounce their citizenship is even more complicated. The IRS requires these individuals to continue paying taxes for up to 10 years after renouncing citizenship (and leaving the country) unless qualified for one of two very narrow exemptions pertaining to dual nationality or age.

• The rule largely applies to people with a net worth of $2 million or more on the date of expatriation or who averaged at least $139,000 (for 2008) in annual net income tax liability for the five years prior to expatriation.

• A new U.S. law raises additional tax concerns for expatriates.
• Passed in May, the Heroes Earning Assistance and Tax Relief Act, or HEART Act, goes a step further and imposes income tax on any net unrealized gain from a property sale in excess of $600,000.

• The tax is based on the property’s fair market value on the day before the expatriation or residency.

• The expatriate provisions of the HEART Act were largely meant to provide revenue to pay for other benefits of the act, mostly benefiting U.S. service personnel. It is aimed at individuals of high net worth who seek to permanently escape the long arm of the IRS, rather than the average expatriate who retires to someplace like Belize.

• John Olivieri, a partner with the New York law firm White & Case, thinks the act was passed to discourage U.S. citizens from renouncing citizenship in order to avoid paying taxes.

• “I think the amount of people who expatriate is still very small, so it’s largely symbolic,” Olivieri says. “But now if you expatriate, you’re essentially paying an exit tax.”

• Prescher contends that most expatriate retirees are not interested in making a permanent break from the U.S., and if they are, it’s not to avoid paying taxes.

• “The two things you don’t want to give up are a U.S. mailing address and your U.S. citizenship,” he says. “Those things to me are incredibly important. I’m not living offshore because I don’t want to be a U.S. citizen. I’m living offshore because it’s cheaper and the weather’s better.”

Banking logistics

• When Americans travel for a week or two, they are most likely to exchange currency to pay for things like taxis, souvenirs or dinners.

• But if you’re planning on retiring to the DR, you’ll probably want to open a foreign bank account.

• “It just makes a lot of sense in terms of ease of moving money around.

• When deciding how much to deposit, consider exchange rates and how much money you need to keep in a foreign account to pay bills and buy groceries.

• “The U.S. dollar seems to be taking a bit of a beating right now, so if you feel the dollar keeps weakening, you might want to hold your money in pesos.

• You may want to keeps bank accounts in the U.S. and the DR because it’s convenient.

• “I still keep a U.S. bank account to pay bills and I also have an account in the DR that I can move money into and out of. “There are times where you want dollars and times you want pesos.”

• Fees can add up, too. Foreign ATMs often charge currency exchange fees and withdrawal fees based on a percentage of the withdrawal or a flat rate. The fees are on top of what your stateside bank charges.

• “If a customer is traveling internationally, we encourage them to call us before their trip and inform us of their intentions,” Wachovia Bank spokeswoman Jennifer Darwin says. “This would ensure no disruption to their service.”

• The U.S. Treasury Department wants to know if you have any foreign bank accounts with over $10,000 in them. If you do, you’ll need to report it on a Form TD F 90-22.1.

• The penalties for not filing the form are stiff — up to a $500,000 fine and prison time.

• “It’s to make sure you are including and reporting all your worldwide income.

Packing decisions

• If you’re going overseas for a few months, you may be able to get by with a couple of suitcases. But if you’re planning to retire abroad, you’ll need to start packing months in advance.

• “I think you should take the least amount possible,” she says. “It’s just easier to move around and you save money on shipping.”

• Bring along heirlooms and photos, and rent storage in the U.S. for any other things you want to leave behind.

• You should sell or get rid of large pieces of furniture and major appliances. Now is the perfect time to have the “mother of all garage sales” and pocket some of the money toward your new furniture.

• Remember to focus on why you’re making such a gargantuan move in the first place.

  • “This is a great time in the life of someone to disengage from the material stuff and just really travel light with an open mind and see what this new opportunity may have to offer.
  • Retirees seldom kick back and live off retirement income. Expatriate retirees nowadays are trying new things and getting more involved in their newly adopted communities. “They’re moving to try new stuff and reinvent themselves.
  • “They’re in it for the adventure and the new horizons that are opened up by this.”

Why retire in Dominican Republic

Many of our clients are excitied about the possibility of living in this wonderful Island nation.  The truth is that they should be.  Property taxes so low they are almost non-existant, wonderful Caribbean climate, modern shopping and amenities and the opportunity for tax free offshore banking make this country a paradise.  But, with all things in life, it pays to know where to look.  As mentioned in The Dominican Republic Report, some sections or areas offer much better value than others.    

It is worthwhile to note that some areas are considered to be "exclusive".  
When discussing the capital of Santo Domingo, neighborhoods such as  
Los Cacicazgos, La Esperilla, Gazcue, El Malecon, Bella Vista, Arroyo Hondo, La Julia, Naco, and Piantini will cost more both in respect to property prices and property taxes.  In addition, utility rates tend to be higher in these sections as well.  As an example of other areas, the same can be said for La Romana, Juan Dolio and tourist areas of Sosua, Puerta Plata and Cabrete, Punta Cana, Bavaro. in fact you may even prefer to live in a section that is geared towards tourists.  But, the truth is, you will not find the real hidden property bargains if you focus your seach only in such sections.

When looking for apartments in the capital of Santo Domingo and Santiago de los Caballeros, the better values tend to be found in the more "middle-class" residential sections found in the Zona Oriental, or in sections north-west of the city, 

When looking for investment property or beach-front property, keep in mind the old rule about location, location, location.  To be more specific, look for areas that are not currently over run with tourists, but have the potential for growth due to government incentives.  If you are buying property that is difficult to access, you will have a property that is difficult to sell later on.  Look for areas like Juan Dolio where new projects are under construction, or are planned.  Also look for areas that the government is improving with new highway construction.  While this may sound like common sense, many people fall in love with the surroundings, but forget to think about other factors that will effect future value or re-sale opportunities.  


The World's Top Retirement Havens

Dominican Republic World's Top Retirement Havens From Live and Invest 

  • Enjoy free medical care...

  • Or health insurance for $50 a month or less...

  • Employ a full-time maid a gardener even a driver on a Social Security budget.

  • Live like a king on $1,200 a month.

  • Rent a comfortably, fully equipped home or apartment near the beach for $700 per month or less...

  • Own your own second home in the sun for as little as $120,000...

Right now, you could live and retire in style to dozens of places around the world...even on a budget of $1,200 per month or less. Dominican Republic is one of best overseas retirement and lifestyle havens.

How much will it cost you to live in Overseas Retirement? The only one who can answer that question is you.

Here’s the most important thing to understand about budgeting your new life overseas: You can spend as much or as little as you want to live almost anywhere. Some places are generally more affordable than others, and a handful of places are absolutely cheap. But globalization means you can enjoy more or less any standard of living more or less anywhere on earth, if you're willing to pay for it.

If cost of living is your primary motivation for thinking about moving to another country, I recommend you focus on these choice. If you're not looking to move on a super-fixed income (of, say, US$1,200 a month or less), you have many good options, and here's what I strongly suggest:

Stop obsessing over this cost-of-living question. Yes, of course, you need to know that you'll be able to afford to live in whatever country you decide to try on for size, but here are a few other things to remember, as well.

Most important, your cost of living almost anywhere is controllable. It will not be the same as my cost of living in that same place or, necessarily, the cost of living in that place for anyone else you might speak with.

Most expense items--everything from housing to health care, from travel to entertainment, from your monthly grocery bill to your phone/cable/Internet package--are hugely variable and can be managed.

Many American are living in downtown Santo Domingo City on a budget of US$900 a month. I wouldn't have believed it if he hadn't itemized his monthly costs for me. they renting a small furnished house (without air conditioning), in a local neighborhood, for US$500 a month and controlling his other expenses so effectively that they amount to no more than another US$400 a month.

Maybe you could live in Santo Domingo City on US$900 a month, or maybe that lifestyle would make you miserable. Maybe you'd spend more than I am spending to enjoy the standard of living you're looking for. We know people who do. Santo Domingo City is a place where you can find almost any product or service you might be in the market for…and avail of it if you’re willing to ante up.

Second, cost of living is a forever-moving target, especially if you’re living in a country whose currency differs from the currency in which you derive your income.

Third, none of this is really the point.

The point is, again, that you can control your cost of living, within parameters, almost anywhere in the world. We present in this section, for example, two budgets for living in Good area in Santo Domingo, Dominican Republic. One totals US$1,890. It includes US$700 per month for rent, US$250 per month for a full-time maid, and US$300 per month for entertainment. This constitutes a higher-end budget for living in Santo Domingo. In a more out-of-the-way neighborhood, you could rent a small, unfurnished apartment for as little as US$250 a month.


Retire Big Even On A Little Budget.

Reinvent Yourself And Have The Adventure
Of Your Lifetime

In its continued and expanding efforts to welcome the world's retirees, investors, and business folks, Dominican Republic is remaking herself. it is building new roads and paving old ones...building new hospitals, more schools, additional airports...creating investor-incentive zones...investing in a metro system for Santo Domingo City...as well as new parks and recreation areas...But Santo Domingo really is the best place in the world right now to retire, to start a business, to live, and to invest for long-term upside. This is a remarkable little powerhouse of a country with an ambitious agenda. It has rolled out the red carpet--for foreign retirees, for foreign investors, for global entrepreneurs--making it easier and more attractive than ever before in this country's history...and easier and more attractive than anywhere else on earth today...to think about spending your time and your money.

if you be here, on the ground, watching the infrastructure and other improvements youself day-to-day, you believe it. It's like watching time-lapse photography. When Dominicans set their minds to something, they do it. A new highway? New bridge? Other countries in this part of the world promise those things for years before following through. In Santo Domingo, you blink and the promised road is a reality...the new airport open for business.

Now, no place is perfect, and Dominican Republic is not exception. There are downsides, struggles, and challenges associated with living, investing, and doing business in this little country so committed to improving itself. But those things can be addressed overcome. if you're prepared and if you have the right guidance and support.

And the payoff can be enormous. Here in Dominican Republic today, you really can realize the retirement you've long dreamed of even if your retirement nest egg is far smaller than you expected it to be. You really can generate the income you need to live the life you want...and keep every dollar you earn. You really can invest for both immediate cash flow and long-term upside, positioning yourself in an economy that has managed to thrive in the face of the global downturns and disasters of the past several years...

In Dominican Republic today, you really can live better, retire well, start over, reinvent yourself, and take control of your financial future.

Dominican Republic is the world's #1 overseas retirement

Dominican Republic is also:
  • The best place to base your business and an entrepreneur’s playground

  • An international banking center (where, yes, it is still possible
    to open an offshore account, even as an American, even,
    at one particular bank, in a single day)…

  • The easiest and most advantaged place in the world to
    establish residency, thanks to a ground-breaking new program
    (that can even provide a work permit)…

  • Home to the smartest beach, river, and mountain property buys
    anywhere on the planet today…

  • One place in the world that’s enjoying continued growth and
    prosperity and that is positioned for a whole lot more of the same
    over the coming decade…

  • A great place to call home…