Citizenship Programs

Citizenship And Nationality: What Is The Difference?

To answer the above we first must ask the question: what is citizenship really?  It is membership, so to speak, of a particular country.  To be more precise it is an affiliation with a particular government because there is a distinct difference between nationality and citizenship.  Nationality you obtain by birth, by accident and no voluntary action of your own.  Citizenship on the other hand is something you might obtain because of nationality, or by voluntary choice.  Regardless, it is a government or political entity that issues a passport to demonstrate your affiliation (citizenship) and it is a government that can take your citizenship and your passport away (or you can renounce it) but not your nationality.  There are some governments such as the United States that have a separate and distinct process to relinquish nationality (which is a distinct and separate process from citizenship renouncement) but that is like you signing a document claiming you were never born to your mother (and that you were cloned or created somehow in a test tube).  The absurdity or ridiculousness of this we think is obvious, and most nations do not recognize such a thing (although they do have a process to renounce your citizenship, which is a different matter than nationality).  Just to illustrate this, if we talk about someone born in France that relocates to Canada (as an example) and becomes a naturalized Canadian citizen, did such a person loose their heritage, their background, and their roots or ties?  That person is of course still French, and by their own voluntary will also a Canadian citizen.  In fact, it is up to such a person to decide if they want to maintain dual citizenship with the French and Canadian Governments, but the person is French and always will be regardless if any particular government wants to take away your citizenship (or again if you decide to get rid of it voluntarily).  In any event, giving up your current or previous citizenship is certainly a very personal and sometimes difficult decision.  However, just like anything else in life (current job or career, telephone service company, the school where you might have your children enrolled, etc.) one can ask: Is this relationship or affiliation really working out?  To quote the lyrics from a song from the Clash: Should I stay, or Should I go?

Why Would Someone Want Another Citizenship ?

In terms of relocating to another country, people of course throughout history have had all sorts of reasons for doing so.  In some cases the government in the previous country was not abusive necessarily but the person left to seek out better economic opportunities.  In other cases of course the government was abusive towards the individual because of religion, race or political beliefs.  Only more recently in the grand context of human history have some people renounced citizenship due to taxation issues, but that is because the taxation rates have been higher during the past 100 years than during many other times in history.  In the United States for example, looking back at the past 100 years and starting with 1913, the rates have gone from 1 percent up to about 80 percent, all depending upon your income amount of course.  However, looking back at the middle ages period we see tax rates that reportedly have not exceeded 15 percent, even during periods of war.  In fact, the most common tax was a flat 10 percent on wool and other commercial goods.  And jumping back to today, we have the case of Hong-Kong which imposes a flat personal and corporate income tax rate of 15 percent.  Ireland has a corporate tax rate of 12.5 percent for income derived from trade or commerce and 25 percent for passive income (investments, rents).  The personal tax rate for a single earner is 20 percent for the equivalent of about US$40,000 and of course it jumps to 41 percent for amounts above that.  So, the question is how can it be possible that some governments are able to function and finance their own respective needs or government works taking only 15 or 20 percent in tax from the populace, whereas other governments vacuum up 50 to 70 percent from their own respective citizens (and still they run budget deficits because what they take in is not enough)?    In any event, not everyone looks to obtain another citizenship or even renounces citizenship for tax issues alone.  Many of our clients are concerned about forced military service for children (to fight in wars that may have nothing to do with defense) or the political direction of their previous home country.  They might also be concerned about  other issues such as home schooling or foolish immigration policies in their previous home country that have resulted in various kinds of issues.  Regardless, each person has their own reasons for seeking out another citizenship and possibly another more sensible place to call home.

Citizenship Programs: What Is Economic or Instant Citizenship ?

There are a very small handful of countries that offer what is know as economic or instant citizenship, although the term instant really might mean anywhere from about 6 to 14 months or so in terms of the bureaucratic processing.  In terms of the group of countries offering such economic citizenship programs, we have in the Caribbean the islands of St. Kitts and Nevis plus Dominica (an English speaking island NOT to be confused with the Dominican Republic, which is a Spanish speaking country in the Caribbean located on the second largest island with about 10 Million inhabitants).  In Europe, we have Malta and Austria offering such citizenship programs but the costs are much higher (see below).  In all these cases, the term of investment is often used but in reality such payments made are in effect donations that you will NOT get back.   With respect to the terms of the countries offering such citizenship programs:

In The Caribbean, We Have The Following Economic Citizenship Programs:

The islands of St Kitts and Nevis have an economic citizenship program that was created back in 1984.  There are two options to qualify for this:  One is a NON REFUNDABLE donation of US$250,000 to the so-called St. Kitts and Nevis Sugar Industry Diversification Foundation, which is billed as a public charity, but it is anyone's guess where the money goes.  The other option involves the required purchase of real estate valued at US$400,000 as the minimum.  However, the only problem, as least in the past, was the you had to buy into one particular real estate project the government directed you to (you cannot buy whatever or where ever you want) and the price tag on these properties were somewhat dubious as to the actual true value.

The Island nation of Antigua and Barbuda recently instituted an economic citizenship program of their own in 2013, which basically is an exact replica of the program in St. Kitts: US$200,000 cash donation or US$400,000 real estate investment.

The tiny English speaking island nation of Dominica (again NOT to be confused in any way with the Dominican Republic) offers the least costly deal of the three, but even so the terms are:  A NON-REFUNDABLE donation of US$100,000 for a single application or US$175,000 for husband and wife plus various other legal and or government filing fees.

In Europe, there are two nations that also offer economic citizenship although the costs are much higher than their Caribbean counterparts.  The Mediterranean island nation of Malta offers a program for a cool 1.2 Million Euros, and Austria as well has a program in place for 3 Million Euros.

So, if you have some money to burn, the above programs may be appealing for you, but keep in mind that even though the term instant citizenship or quick citizenship is often used as a synonym with the term economic citizenship, many of the programs can actually take anywhere from 6 to 14 months to complete regardless (in terms of bureaucracy, paperwork, and so on).  Which leads to the question: If instant really is not so instant, is there a better idea or better citizenship program out there?  The answer is YES (see below).

Residency - Citizenship in The Dominican Republic

Prior to 2007, President Fernandez (who was the President of the Dominican Republic at that time) wanted to offer a program for retirees or pensioners as existed in places such as Panama or Costa Rica.  Seeing the interest and success in such programs, a decree was issued creating such a program in the Dominican Republic – albeit with a number of improvements in terms of requirements over the other countries mentioned.  However, in 2007 a formal law was created making this program an official codified process, but with some additional categories as well.  These categories falling under the same special law are:

A. Pensioner or Retiree – With a fixed Monthly Retirement Income, Pension or Annuity.  B. Independent Investor – With Proof of Monthly Income coming from any investment or non salaried source (meaning bank account interest, brokerage accounts, rental income, royalties, etc.).  C. Lump Sum Investor – With Proof of a local investment of US$200,000 (or equivalent in another currency) in local financial instruments, real estate, business enterprise, etc.

In order to qualify for this special status regardless of A, B or C, there is NO age requirement (as is the case in some other jurisdiction if applying as a pensioner or retiree), with obviously the time line of eligibility for naturalized citizenship application shortened down to 6 months from the date your investor residency card is issued.  Over the past few years roughly 90 percent of our clients have been able to participate in this program and we would be glad to assist you as well. One of the positive aspects however is that unlike in some other jurisdictions, there is NO requirement for the applicant to invest in real estate, although you are welcome to do so should you wish – and keep in mind that this will allow you to file for naturalized citizenship under that qualifier.  Also, the Dominican Republic has been and still is a real estate investor's paradise because per square foot, you will get more for your money in the Dominican Republic compared to just about any place else in all of the Caribbean (from basic properties up to luxury condominiums or homes).  In fact, over the past 10 years, many of our clients have already doubled their money in some cases with regards to real estate investments – and are still buying now in 2014 because real estate holdings are a hedge against inflation and possible devaluation of the US Dollar – AND is still reasonably priced compared to similar properties elsewhere (compared to St. Martin, Bahamas, etc.).

But not only that.  Persons applying under the above mentioned special investor residency process also can obtain a reduction on title transfer taxes for their first real estate purchase, AND annual real estate taxes are quite low in general compared to the US, Europe, etc.  In terms of annual real estate taxes in the Dominican Republic : You can expect to pay one (1) percent of the property value, calculated for the amount over and above US$100,000 (real estate valued at the Peso Equivalent of US$100,000 and below is tax-free in terms of any annual real estate taxes).

In terms of some general real estate information and how it relates to the application process (for residency and citizenship) - there is no specific or fixed amount they are looking for or  requiring in terms of a real estate purchase, so it is up to you what  you might consider.  Real estate in Santo Domingo or Santiago will be less expensive than  property in a tourist area such as Juan Dolio or Punta Cana.  With  regards to Santo Domingo, you can find a higher end 3 bedroom condo  (in an upper middle class area) ranging from say US$145,000 for a  1,400 square foot property up to US$250,000 for maybe a 2,400 square  foot property - and everything and anything in between.  Outside of Santo Domingo, there is a builder doing Swiss chalet style vacation properties in the mountain area of Jarabacoa (new construction) for about US$125,000.  In addition, you can get a 2 or 3 bedroom townhouse condo in Punta Cana – Bavaro for about US$125,000 but  it will be smaller (about 1,200 square feet or so).

Regardless of which of the above application scenarios may be best applicable for yourself, our office can assist with the initial residency application all the way through to the citizenship process and passport.  Over the last 16 years we have assisted many families and individuals, and would be glad to be of service to you as well.

GETTING STARTED:

Regardless if you intend to apply as an ORDINARY RESIDENT APPLICANT or QUALIFIED INVESTOR APPLICANT, immigration has started to insist as of June 2012 that potential applicants obtain a special residency visa from their nearest Dominican Consulate as the first step (the second step would be a visit to the Dominican Republic to start the actual process with immigration).  You should be aware that this is NOT a new law or requirement, but rather one that has been in place for many years.  However, The Dominican Department of Immigration did not enforce this provision previously, that is until they started doing so in June of 2012.  So, we can call this visa in your passport the first step in the process, and then the actual filing process with the Dominican Department of Immigration in Santo Domingo as the second step.  

Our office assists clients with both the first and second step, and to make sure clients have everything correctly prepared, we ask that they send us one original set of documents before they apply for the visa.  This is so we can check the documents to make sure they are in order, and to prepare a document for the client whereby someone is our office is acting as a guarantor (A Dominican Citizen must as a guarantor for the visa application and the residency application with immigration).  In addition, we can provide a complete documents list and templates for some of the documents as well.  Once clients obtain the special residency visa which is valid for 60 days, then they will visit Santo Domingo to begin the actual process with the department of immigration and we will be with our clients every step of the way through approval and issuance of the respective cards.  In addition, we of course assist with the naturalized citizenship process for our clients, and we have been doing so for over 16 years to date (so we like to think we know what we are doing at this point - knowledge is fine, but BOTH experience and knowledge is better - and that is what makes us different).

Why Choose The Dominican Republic For Residency and Citizenship?


1. The Dominican Republic Fully Recognizes Dual Citizenship.  You will NOT be asked at any time to renounce your previous citizenship or turn in your previous passport, and the Dominican Republic respects the fact that you might be a dual citizenship accordingly.

2. The Dominican Republic Offers Investors Some of The Lowest Priced Real Estate in The Caribbean.  Per square foot, real estate costs tend to be lower in the Dominican Republic or stated another way:  You will get MORE for your money in terms of a real estate purchase in comparison to most other jurisdictions in the Caribbean.  Also, because the mortgage interest rates are high (according to market conditions) and NOT artificially manipulated by the central bank, as is the case in the United States, the country has not fallen into a real estate crisis as we have seen in the US and parts of Europe (Spain, Ireland).  In other words, real estate in the local markets has not declined and local Dominican Banks are not under water with abandoned properties or non-performing mortgages.  This means that the real estate market remains on solid footing in the Dominican Republic. 

3. The Dominican Republic Offers Banking in US Dollars, Euros and The Dominican Peso.  In addition, interest rates tend to be higher in the country than Panama or the US for US Dollar denominated Bonds or Commercial Paper.  Should investors wish to consider placing monies into Dominican Peso denominated investments, then in such a case, as of June 2014 investors can expect up to 14 percent (annualized) or so with some longer term bonds or commercial paper vehicles.  In other words, with a US$150,000 equivalent in Pesos invested this way, one can expect about US$1,800 or RD$75,000 Pesos per MONTH in interest.  This certainly is enough monthly income from investments to cover your monthly RENT in an upscale apartment, your monthly utilities (Electricity, Telephone, Cable Television, Etc,), And your monthly grocery bill - plus have something extra left over.

Speaking about banking matters, it is also important to note that the Dominican Republic does NOT have any currency controls.  You can bring in any amount of money you want, take out any amount of money you want - and exchange between US Dollars, Euros and Dominican Pesos any day as much as you want all within the same bank.  Of course, each bank has their own due diligence policy and may ask to see source or proof of funds regarding your first wire transfer or for an unusually large wire transfer, but that is only a bank's policy and has nothing do with any law in the country prohibiting you to receive or take out money.  Also, as of JUNE 2014, the retail banking unit of the Dominican Central Bank will accept and conduct transactions in the Chinese Yuan Renminbi Currency.  This means the other local banks in the country will probably be offering savings accounts and or other transactions in that currency soon as well.

4. The Dominican Passport Offers Visa Free Travel To The Following Countries (as of 2012 according to the Dominican Foreign Relations Office): Cuba, Ecuador, Egypt, The Philippines, Georgia, Hong Kong, Japan, South Korea, Israel, Morocco, Mozambique, Lebanon, South Africa, St. Kitts - Nevis, Trinidad - Tobago, Turkey, Tunisia and Singapore.  Travelers with a Dominican Passport may transit the Following Countries without a Visa:  Germany, Spain.  There are additional countries offering visa free travel to Dominican Passport Holders, but we have not mentioned them because the foreign relations department did not list them on their official communication sheet.

5. The Dominican Republic Offers a Very Attractive Alternative To Economic Citizenship Programs elsewhere,  Which is to explain, persons wishing to apply as qualified investors have the opportunity to apply for naturalized citizenship after 6 months and here are some comparison to the economic citizenship programs in other other countries:

As we have already covered, some so-called Instant or Economic Citizenship Programs require that you GIVE US$100,000 (or more) to that particular local government to qualify or purchase real estate valued at US$400,00o or more.  The US$100,000 donation is money you will NEVER see again - it is gone, kaput, vanished like a magician's trick.  In the Dominican Republic, if you invest US$200,000 you are under no restriction as to how or where you invest it.  You can put into government bonds, commercial paper, real estate, whatever - and the money is YOURS, ALWAYS AND FOREVER.  You can move it around, change your investments, and take it out later on if you so choose.  Over the past 17 years we have helped a large number of individuals and even entire families as well procure residency and naturalized citizenship in the Dominican Republic.  Some clients have renounced their previous citizenship and travel or do business exclusively on their Dominican Passport.  Many have been actively investing in real estate and or living off the interest from local fixed income investments.  Regardless if you are seeking retirement options, another citizenship for business or travel, or simply a place to relocate your family (private bi-lingual schools are very good and are very reasonably price compared to the US or Europe), the Dominican Republic is an option worth considering.

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With all of the options you might have in terms of relocating to a new country or choosing one for a second passport or dual citizenship - you probably want to ask: Why The Dominican Republic?  A very good question, and this article hopes to answer your questions about the process in the Dominican Republic plus offer a comparison to some of the other economic citizenship programs out there.

Ascot Advisory has been helping clients for almost two decades with offshore incorporation services, banking and investment assistance, second passports & dual citizenship, plus some additional legal services in the Dominican Republic (such as real estate sales contracts and title search).  Our philosophy has always been to try to do a few things extremely well and considering the number of client referrals over the years, we would like to think we have been successful.  Dealing with the regulations and bureaucracy in another country is never easy, and of course much less so if you do not know the terrain (bureaucratically speaking) or the language.   In this respect, we do all of the heavy lifting (so to speak) so that the process for our clients is as easy and least time consuming as possible.  In addition, we assist our clients with banking, and other small but helpful services so they can accomplish what they need to do without difficulty.  We like to think we are different - providing value added services that many of our clients appreciate.  Contact us to find out how we can help you.