Retiring in the Dominican Republic in 2022

Retiring in the Dominican Republic in 2022.

If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).

Overview

There are several retirement location options, but the Dominican Republic is one that you might wish to take into account. This country on the Caribbean island has plenty to offer every retiree, from inexpensive housing to daring activities.

Despite having more than 1,000 miles of coastline, the Dominican Republic is made up of much more than just beaches because of its size. With mountain ranges, lush plains, deserts, and rainforests, the interior of the nation is incredibly diversified.

Retiring in the Dominican Republic is desirable due to its living expenses that are substantially lower than in North America and Europe. However, many individuals also visit the country only during the winter to make the most of the year-round tropical temperature. There are also direct flights to North America and Europe, and there are six international airports, making it simple to reach any location in the nation. Along with multinational stores and a bustling expat community, the area has good internet, English-language cable and satellite television, as well as healthcare.

In general, expats prefer to reside in the northern regions of the country, such as Puerto Plata, Sosua, and Cabarete, where other expats also reside. Along with top-notch healthcare, these towns include international supermarkets, gated communities, and a variety of international restaurants.

The east coast, meanwhile, is the new thriving region that has replaced the north coast as the primary tourist hub. These areas have a sizable international airport with more flights than the north. The quantity of amenities has substantially expanded in the east over the last few years.

You should be aware of certain issues, though. Electric supply may be patchy due to Dominican Republic’s status as a developing nation, so many residents have decided to invest in an inverter or generator backup system. It is advisable to have health insurance even when the healthcare is first-rate and much less expensive than in the US. The nation’s official language is Spanish, and few individuals outside of the tourist areas can speak in English. While Dominicans are a very amiable people and you are likely to find individuals who can help you whenever speaking Spanish is necessary, it is important to at least be able to speak some Spanish if you are set in retiring in the Dominican Republic.

Retiring in the Dominican Republic: Obtaining a Visa

You must obtain a visa in order to remain in the Dominican Republic if you choose to retire there. You can travel to the Dominican Republic on a regular tourist visa and then apply for a retirement visa, or pensionado, once you are in the country. You can hire a local attorney to assist you in organizing all of your documentation for retiring in the Dominican Republic because the process can take many months.

You will be required to present documentation, such as your birth certificate and a background check, as well as evidence of an income of at least $1,500 per month.

Another way is to seek a temporary residency permit from the Migration Office of your local Dominican Consulate. The temporary residency is valid for one year and can be renewed annually over a period of five years. You can apply for permanent residency after five years.

You can also apply for permanent residency under the residency by investment program, which exempts foreign nationals from the process of obtaining temporary residence. Under the scheme, you will be allowed to get an instant permanent residence permit by making an investment in movable or immovable property or by bringing your pension or regular passive income to Dominican Republic.

To qualify to the residency by investment scheme, you must prove that you will receive a passive income worth at least $2,000 per month from a foreign source for five years, as well as transfer such amount to a local bank. An additional $250 is required for every dependent.

You can be qualified for citizenship through the program depending on if the investment and income requirements are still met after two years of permanent residency.

You must speak fluent Spanish in order to become a citizen because you will need to prepare for and participate in an official interview where you will be asked to explain why you want to become a citizen of the Dominican Republic. Your knowledge of the nation’s traditions, values, and culture will also be examined.

You won’t be mandated to always be present in Dominican Republic, it would be best to spend significant amount of time in the country prior to naturalization so as to establish some sort of ties with it as well.

Retiring in the Dominican Republic: Cost of Living

A meal at an inexpensive restaurant in Dominican Republic is estimated to cost 350 Dominican pesos ($6.45), while a mid-range restaurant can charge 2,000 pesos for a three-course meal for two, (at the time of writing), according to global cost of living data aggregator Numbeo.

Renting a one-bedroom apartment within Dominican Republic’s city center costs 24,789.5 pesos per month and about 12,845 pesos outside that area. The costs for buying apartment within and outside the city center can reach 72,235 pesos and 48,569 pesos per square meter, respectively.

The overall cost of living in the country for a family of four can hit an estimated average of 108,038.5 pesos ($1,991) per month, while a single person can live off 30,303 pesos a month, both excluding rent.

In the US, meanwhile, the estimated monthly costs for a family four and a single person can go as high as about $3,490 and $980, respectively, excluding rent. 

Retiring in the Dominican Republic: Safety

Although the Dominican Republic is a gorgeous place to retire, the US Department of State recently issued increased caution amid the occurrence of homicide, armed robbery, sexual assault, and other violent crimes throughout the country. The high incidence of crime overall is a result of a number of factors, including the easy access to guns, the usage and trafficking of illegal narcotics, and a deficient criminal justice system.

There are certain locations that are better policed due to the country’s establishment of a professional tourist police corps and implementation of the 911 system, according to the State Department.

If your primary concern is safety, you might want to think twice about retiring in the Dominican Republic given the criminal activities in the nation. Do note that it won’t hurt to be extra cautious wherever you may end up.

Retiring in the Dominican Republic: Healthcare

A three-tiered healthcare system is in place in the Dominican Republic. The government-funded first tier ensures that citizens have access to free, socialized healthcare. Regardless of the tier they have access to, the majority of consumers nonetheless pay out-of-pocket for medical supplies and other services.

Employers and their employees each contribute to the second tier, also called contributive tier. Meanwhile, people whose income is higher than the national average are responsible for paying for the third tier of healthcare, known as the contributive subsidized tier, which is also partially subsidized by the government.

You can expect to belong to the third category if you’re retiring in the Dominican Republic. You’d need to obtain private health insurance as well. Most operations, emergencies, and even some medicines are covered by international health insurance, which can cost up to $200 per month.

Retiring in the Dominican Republic: Taxes

The Dominican Republic levies any income earned in the country as well as income from financial investments, such as stocks and bonds, and certificates of deposit. However, the country exempts social security and pension benefits from tax.

If you are a US citizen, take note that your home country does not have a tax treaty with the Dominican Republic so you might end up owing taxes in both countries. You can check out our previous article titled 24 Vital Things on American Expat Tax You Should Note for more information.

Pros of Retiring in the Dominican Republic

In general, below are the upsides of retiring in the Dominican Republic:

• Affordable cost of living
• Tropical climate
• Laid-back lifestyle
• There is no such thing as “minority” in the country

Cons of Retiring in the Dominican Republic

Here are the drawbacks of retiring in the Dominican Republic:

• It’s common for people to be late (no respect for time)
• Customer service needs improvement
• Internet service may be poor (depending on location)
• Electricity goes on and off
• No respect for traffic lights/pedestrians

Retiring in the Dominican Republic: Bottom Line

Peaceful beaches and a lovely climate could entice you to settle in the Dominican Republic. You could stretch your retirement income further than if you were in the US because of the much cheaper cost of living in this Caribbean country. The money you save on everyday expenditures may make moving in retirement well worth it, even if some of your retirement income is subject to taxes. You should finally think about your own wants and needs when deciding where to go. Before choosing a location, weigh its benefits and drawbacks, and take your time.

Pained by financial indecision? Want to invest with Adam?

Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.