The international tax context
Tax treaties between the Dominican Republic and various countries allow foreign investors to structure their real estate investments in DR in a fiscally efficient manner, respecting strict rules. This guide covers the main markets: Canada, United States, Europe (Spain, France, Switzerland) and Latin America.
Our Canadian entity · World Activities CND
Founded on February 18, 1998 in Quebec, our Canadian entity is 9060-2111 Quebec inc. operating under the commercial name World Activities CND. This entity is the historical founding vehicle of the World Activities group.
It fulfills several roles for international investors:
- Canadian receptacle for capital return
- CRA-compliant structure (Canada Revenue Agency)
- Legal interface for DR diaspora in Quebec
- Entry point for international investors
Capital return · How does it work?
The concept of capital return allows an investor to recover part of their investment in non-taxable form, provided it is truly initial capital and not disguised income.
TAX WARNING
Capital return must be structured correctly from the origin of the investment. We work with Quebec and international tax specialists to validate each structure. This page is not tax advice, consult your CPA.
The 3 main structures
Structure 1 · Direct via individual
Investor directly buys DR real estate in their personal name.
- Advantages: simplicity, minimal structure costs
- Disadvantages: DR IPI owed (1% after CONFOTUR period), home country tax on rental income, declarative complexity
- Recommended for: investment < 200,000 USD
Structure 2 · Via World Activities CND (Quebec inc.)
Investor subscribes shares in World Activities CND, which itself holds DR real estate via a DR entity.
- Advantages: capital return possible, proven structure, legal protection, applicable tax treaty
- Disadvantages: annual management fees, more complex
- Recommended for: investment > 250,000 USD
Structure 3 · Via dedicated foreign company
Investor creates their own company in their country of residence which holds DR real estate.
- Advantages: total control, customization, patrimonial separation
- Disadvantages: constitution costs, significant annual costs
- Recommended for: investment > 500,000 USD
DR Tax treaties · Key points
The Dominican Republic has tax treaties with:
- Canada: signed 1976, avoids double taxation on income and capital gains
- Spain: signed, important for European investors
- France: under discussion
- Other countries: consult your tax advisor
Each treaty allows a foreign tax credit: taxes paid in DR are creditable against tax owed in the country of residence, avoiding double taxation.
Tax mistakes to avoid
- Not declaring foreign assets in country of residence (T1135 forms in Canada, FBAR in USA, Modelo 720 in Spain)
- Confusing income and capital return · Initial structuring essential
- Ignoring DR tax on rental income · 27% net (or 1% on gross depending on regime)
- Not complying with UAF · Documented origin of funds required
- Under-declaring gains · DR now exchanges tax information (OECD agreement)
Typical timeline of structured investment
- Week 1-2: Initial consultation with our team + your CPA
- Week 3-4: Choice of structure (direct / via CND / dedicated company)
- Week 5-8: Constitution of legal vehicles if necessary, opening bank accounts
- Week 9-12: Unit selection + due diligence + reservation
- Month 4-24: Staggered payments + construction
- At delivery: Registration at Registro Titulos + operation activation
Perspective for US and Canadian investors
For US and Canadian investors, the Dominican Republic offers particular advantages:
- USD-denominated market (protects against currency risks)
- Geographic proximity (3-4 hour flights from Northeast US and East Canada)
- Established retirement destination (Pensionado program in 45 days)
- Growing DR diaspora (NY, Boston, Providence, Toronto, Montreal)
- Multi-generation family investment potential
- CONFOTUR regime particularly attractive
How much does this structuring cost?
- Initial structuring: 3,000 to 8,000 USD (one-time)
- Annual management: 1,500 to 3,000 USD
- Local CPA: 1,000 to 2,500 USD/year
- Notary: 800 to 1,500 USD
These costs are quickly amortized for investments > 250,000 USD thanks to generated tax savings.
How to start?
We organize confidential meetings with Michel Roy (Co-President based in Quebec) and our international tax team to analyze your personal situation.
Discover Michel Roy's profile → · ← Back to Blog