Dominican Republic Information:
Living In The Dominican Republic 2016
deciding upon a place to relocate to for retirement or
whatever reason, there are always a number of factors to
consider, and some of them not so obvious. In addition,
even different parts, regions, cities and towns within a
specific country might offer both benefits and detriments over
another. With regards to the Caribbean of course, we are
talking about island nations for the most part and the
Dominican Republic certainly is on an island, albeit the
second largest island in the Caribbean (Cuba is the largest by
calculating square miles although it might not seem that way
by looking at it's land shape). So, what are the
benefits of living on the second largest island and even it's
geographic location in comparison to other places?
First off, the Dominican Republic is physically located in an ideal spot geographically. It's centralized location and proximity to the US mainland means that for anyone concerned about travel connections, it is quite convenient. And because of the large tourism component, there are international direct flights to Eastern US cities, Europe and both Central – South America. But the major benefit of the Dominican Republic over many other smaller islands in the Caribbean is it's size and self sufficiency in food production. Many of the smaller Caribbean islands do not have the space or ability to have large scale vegetable farms, cattle ranches, and so on. For this reason, much of the food in other smaller islands is imported and thus more expensive. With self sufficiency in food production and much lower wage scales than the US or Europe, locally produced food in the Dominican Republic tends to be much less expensive. In fact, we have a client that used to be the head butcher for a large supermarket chain in North America. After visiting one of the local supermarkets (and a more upscale chain at that) he commented that if beef was as inexpensive in North America as it is in the Dominican Republic, he would eat steak every day.
In terms of one's own personal economics, just as with accounting for any business, there are two ways to boost the bottom line: Increase Income, Reduce Costs (or both if possible). Obviously of the two, reducing living costs is far easier to do, especially if you considering moving to a lower living Caribbean island as one way to accomplish two goals (retire in a beautiful warm weather climate and enjoy a better lifestyle with your retirement income at the same time). And to be fair, this general comment can be made about many of the emerging or developing market nations as well.
With that said, all imported items regardless if the topic surrounds food or something else, will tend to be more expensive than locally produced products. However, you will find all the major brands that you want from Heinz Ketchup to cheese imported from Europe and the US. From imported Italian pasta and tomato sauce to organic lettuce, it can be readily found in the larger Dominican supermarkets albeit at a higher cost than local items. But, if you do tend to stay local, you will find that your food bill is going to be very reasonable and in fact probably much less expensive that what you are paying at the grocery store currently in Europe or North America.
But do not simply take our word for it as there are two websites we are aware of to help you crunch the numbers. One such site is Numbeo (http://www.numbeo.com/cost-of-living/), which claims their information is up to date as of February 2015. In any event, comparing cost of living with Miami, Florida and Santo Domingo, Dominican Republic they claim that your purchasing power in Santo Domingo is just about double in the Dominican Republic. Stated another way, it will cost you US$1,000 in Miami to get the same purchasing power as US$540 in Santo Domingo. They also go on to say that: Consumer Prices in Santo Domingo on average are 30 percent lower than Miami, Rent in Santo Domingo is 70 percent lower than Miami, Restaurant Prices in Santo Domingo are 41 percent lower than Miami and that Groceries in Santo Domingo are 32 percent lower than Miami.
Another site offering a similar cost of living calculator is Expatistan. According them, when comparing New York City to Santo Domingo, the cost of living in New York City is 112% more expensive than in Santo Domingo, Dominican Republic. Again, what they are saying is basically by moving to the Dominican Republic, your purchasing power just about doubles. And just to give you yet another reference, Expatulator.com (www.expatulator.com) claims that living in Santo Domingo, Dominican Republic is LESS EXPENSIVE than: Cyprus, China, Spain, Taiwan, Jamaica, Malta, Brazil, Mexico, Germany, Martinique, Dominica (an English speaking island in the Caribbean not to be confused with the Dominican Republic), United Arab Emirates, Qatar, Italy, US Virgin Islands, Korea, Belgium, Ireland, Saint Vincent, Gibraltar, Anguilla, French Polynesia, Isle of Man, British Virgin Islands, Antigua and Barbuda, Saint Kitts and Nevis, New Zealand, Bahamas, Barbados, Australia, Cayman Islands and Iceland. Actually this is just a partial list as the Dominican Republic ranks 296 out of 750 destinations. The most costly destinations for expatriates are: Venezuela, Angola, China, Singapore, Norway, Switzerland, Monaco, Japan, Australia, Aruba, New York City, London and Bermuda.
Health care is another item of concern to retirees especially and here again, we have found that the private clinics and hospitals in Santo Domingo to be quite good and reasonable in terms of costs. A visit to a specialist in Santo Domingo will cost about US$50. A visit to the dentist for a checkup and cleaning about US$65 and also other items such as medical tests to be quite affordable as well (CAT scans, radiograms, lab work, etc.). If you are wondering about health insurance, there are quite a few very good private health insurance policies available and some of our clients have already signed up. For a person aged between 50 and 62 years of age, the very best so-called Cadillac health insurance from a private insurance company will cost about US$1,700 per year in premiums. That comes out to roughly US$150 per month and if you do the comparison with similar private insurance coverage in the US (assuming you can even get it) you will most likely find the US costs enough to give you a heart attack before the coverage begins.
Real estate is yet another cost concern and regardless if you buying or renting, the Dominican Republic still remains to be a low cost leader in all of the Caribbean. Obviously what you pay will be determined by what you want and where, but generally speaking you can figure on anywhere from about US$400 per month up to US$1,000 per month for a 2 or 3 bedroom apartment in an upper middle class neighborhood, with the price difference directly related to how new the building is, where it is located, and what amenities it has. Many of the newer buildings with usually feature a formal lobby with an attendant, elevators, a swimming pool in the building for tenants, gym facilities, and off street secured parking. In addition, newer and more upscale buildings will also offer more upscale finishing such as marble in the bathrooms, marble or higher end flooring throughout, granite counters in the kitchen, and so on. Buying of course offers the same ranges as well for the same reasons, but generally speaking you can plan on spending anywhere from US$120,000 for an upper end new one bedroom up to US$300,000 for a 3 bedroom unit, all depending upon location and amenities (you can find 2 and 3 bedroom new constructed condominium apartment units in the US$150,000 range as well).
Truth be told there are a number of relocation destination options to consider, and the Dominican Republic is just one of them. However, the general overall comment we can make is to try and think about not only today but tomorrow as well. Countries like the Dominican Republic are indeed emerging or growing markets, with the key term being growing. The Dominican Republic finished up 2015 with a positive 7 percent GDP growth record and the analysis is growth will be about 4 to 5 percent for 2016. In fact, the Dominican Republic has posted positive annual GDP growth for the past 15 years.
The country has a very young population, with very positive demographics in terms of age distribution. This means no problems with aging demographics as is and will be the case with Europe and North America. An increasing middle class, government focus on higher education and renewed interest in foreign investment in the Dominican Republic points to some attractive long term possibilities. Embassy Suites very recently opened their second property, JW Marriot also opened a new hotel and after leaving the country many years ago the Sheraton Hotel chain came back to take over a hotel property they relinquished to another European chain many years ago. The IGA supermarket chain recently entered the country as have a number of American and European chains (Forever 21, Levi's, Benetton, American Eagle Clothing, Chili's Restaurant, Outback Steakhouse, Tony Roma's, TGI Fridays, Hooters, Payless Shoes, Krispy Kreme, Denny's Restaurants, Victoria Secret, Ferragamo, Brooks Brother and a more extensive list too long to mention). The point is that all of these stores and companies conduct market and demographics research before they come into a new market. There must be something going on that is positive in order for these companies to make an investment. So, while some people may pine for the idyllic Caribbean destination in the middle of nowhere, that appeal draws thin when you want access to goods, services, medical care and other things as well. If you do not want to live in an urban area, you do not have to, but being in a destination whereby you have access a short drive away is convenient and appealing to many people. In short, think carefully about what appeals to you and where you may want to retire, but know that you do have some very worth while options.
John Schroder is the author of this article and his firm, Ascot Advisory Services, has been assisting clients for 17 years in The Dominican Republic with residency applications, citizenship applications, banking and investment accounts, and other legal services (real estate contracts and title transfer, company formation services).
For more information about living in the Dominican Republic and applying for the residency program, please contact John Schroder via our email reply form link below, via telephone 809-756-1917 or visit the website: http://www.ascot-advisory.com/