Internet Biz + DR Res + Panama Foundation?

Hi gang,

Nice to meet everyone. It's my first post however I am no stranger to boards (own one myself), and have been visiting DR for a decade now...

My situation is rather complex and I'll probably be one of the only ones here with this scenario (hopefully not though!).

Current status: Live in Canada, own and operate a Sole Prop running an internet business (all clients/transactions are foreign). Recently have become quite successful with my business and can't stand a) the 40% being taxed on my foreign income, and b) the weather here has finally lost its appeal for me as I snowboard less, and snowbird more.

So, I'd like to press the reset button in my life, and it seems the best way to go about moving abroad without crazy upfront res program fee's that you buy into, is to: a) Get res in DR b) Get business setup in Panama c) Continue running my operation remotely as I travel/live in DR and abroad.

This brings up a lot of questions for me regarding timing, and how best to structure my expat plan. I now see that DomRep has many of the same tax benefits as Panama, however I'm still being recommended to do Panama with my business portion of the move (not to hide better, just as common practice).

Our sequence and plan (GF and I):
1. Sell off our stuff, get rid of almost everything except my bank accounts.

2. Get res in DR, and once I have an address there - file my taxes one last time here with my new address on the tax filing.

3. Open Panama Corp/foundation to have new listed home address in DR.

4. Come back to Canada to close/finalize all ties here - claim non-res.

5. When it comes to my Sole prop - I'm assuming I simply close it down, and revert all payments to my new Corp in Panama, then take money into the DomRep banks from there. Ideally simply changing wire/payment info over and continuing to operate with no down time (again my whole biz is online, 30+ websites all bringing in transactions from across the globe).

6. Once I get PR - I'd like to purchase property in DR to call home, meantime thinking of renting/travelling (and scared to own without being at least PR - advice on this?).

7. I think at this point, 18 months later I can safely stop filing, and start living my life abroad properly.

In my research I've ironed out almost all wrinkles however am left with these questions:
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* If and when I move my business over - do I need any type of license to operate remotely? If so would it be with DR or with Panama? How do biz owners there file/what do they file if all income is from abroad?

* My most important part of biz, is to have a reliable high speed inet connection in order to run my day to day. What parts of DR or what providers offer the best inet service? I'd imagine there are pros/cons per region, and I'm willing to pay top dollar or even dedicate a T1 right to my home if I must - can anyone give me some advice on where you'd setup and or if I should worry because it's standard across the big cities?

* Is anyone here currently running a setup like mine above? (Live in DR, and bank abroad/diversify/etc)? If you can't share publically feel free to PM me.

* Is there a more common or hassle free route for self-employed remote CEO's et al moving into DR?

* Has anyone purchased property in hopes of getting their PR and been denied and or had problems later because of buying prematurely based on speculation you'd make it with ease?

* Are there any top tier lawyers or specialists here (Or preferably if someone can quantifiably refer one they used with success) that would be able to walk me through all these steps? I'm seeing lawfirms online everywhere, but while speaking to a few of them so far, I seem more knowledgeable than they are due to needing info on many aspects (biz/res/panama/moving money/life/best steps..). Lot's of puzzle pieces for me (or perhaps I'm making it more complex than I need to, and being a worry wart).

** How can I gain access to the CEO's/ENTREP. category of the board to ask more sensitive questions? I'd love to chat with other in or near my shoes that have gone through this and know the ins/outs of moving business + life abroad.

Thank you kindly DR1'ers, this looks like a great community and I look forward to participating here throughout my journey and beyond. Once I achieve my objective, I will be paving the path for many other online biz owners like me (I have x,xxx contacts who run similar operations and are looking for ways to save/live better while earning foreign income - I've sparked a lot of interest among my groups with this...).

All the best and I look forward to your feedback.
Eager Wannabee Expat

Robert said:

It's for those that live and do business in the DR.

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Thank you Robert, I'll inquire again once I'm there (however some questions do relate to local biz ops, financial community involvement etc.).

Adrian Bye said:

invite me and robert to a very nice dinner at pate palo and we'll tell you how all this works. in short: you're on the right track and will be fine.

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Sounds like a plan, would love to establish good connects asap. If you're serious about this I won't hesitate (will be coming in May'ish to start this all).

Expat13 said:

First thought that comes to mind is your comment comparing Panama to the DR as far as tax benefits.
I agree the 40% Canadian tax on foreign income is enough beyond the weather to consider this move. But from my experience, Panama does not tax foreign income for its residents wheres the DR does similar to Canada. It is less however at 25%. If im wrong here please say???

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Actually I believe that's wrong: Taken from: Dominican Republic Tax Haven and Second Passports

* Tax Haven ? Dominican Republic has a territorial tax system, meaning that if you live there, you would only be subject to pay taxes if you had local income. You can earn what you like outside the country and you don?t even have to declare it, yet alone pay any taxes. This applies to both individuals and companies.

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None of my income (initially) will be from DR, however that still makes me wonder what other benefits/perks there are to having home base for my biz in Panama vs. DR. Also since you don't have to legally spend any time per year IN DR to keep your PR, this makes it quite an attractive combo imo. Panama res starts at 80K for helping with reforestation, or 160K for micro/macro biz startups and hiring 5 locals full time (and that still only guarantees you an application not PR)... However establishing home base and banks there while living in DR seems both legal and easy to accomplish. I am seeing better interest rates on savings accounts in DR than Panama too, so this is all still a clustermuck of info for me to peel back layers from.

Thanks for the responses, look forward to seeing more answers to some of these Q's and I'm sure this thread will help others in turn downstream.

Adrian Bye said:

i'm around until the end of may. as long as we can relax and enjoy a great meal (this place isn't cheap), then i'm cool with it. i can't speak for robert, but i imagine he can be enticed as well.

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**'isn't cheap' < If you're talking a four figure USD bill to meet you two, I'll pass and assume your sarcasm this time Simply taking you two out for relaxing/fine dining shouldn't be a prob though if it's not at that place.

I remember one of my first trips to DR, it was during Canada day - was quite surprised to see it not only celebrated, but celebrated big. My resort owner was the x wife to DR's then Canadian Ambassador (might have changed now - ran a site called popreport.com i think)... Met a really tight crew on that Canada day, would love to see the same thing happen this year - where are the celebrations other than Cabarete < or is that the biggest for Canucks?

Expat13 said:

You may want to query the exact definition here to do your due diligencein case it applies to you.. It is open to interpretation..."no tax on work done outside of the country",,one take is you are here living and promoting your site internationally and the income is coming from outside but you are actually doing work here, to help generate this income..Again Im not a lawyer but thats one take i have heard from one. Very grey it seems, but definitely not as open as Panama. Anyway, sounds like you have some good things happening, goodluck!!

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*Thanks! Yes I suppose you can interpret this in many ways, however I believe it's not the persons physical location as much as where the money is being derived from. Also my biz can be run by my VA's, thus literally taking me 'working' out of DR totally.

I guess it might come down to where my servers are, or my workers/affiliates are... however I think the difference would be if I was the owner of THIS site, charging other dominican's for adspace or services on the forum, that would be taxable as local (say local lawyers, real estate agents etc. advertising here), vs. running a site selling digital widgets (software/audio/etc) having international clients and the biz runs itself remotely and is 90% automated without much day to day from any one person (can be shared/operated from a laptop/inet connection).

Perhaps that's another reason why Panama is where most do their biz setup/homebase, so you don't have to fuss with local business laws at all. I just might diversify, and do both to be safe...

frank recktenwald said:

I know a lawyer here in the DR who's specialized in such matters and has handled many cases involving off shore companies in Panama for expats residing in the DR. If interested PM me and I'll forward you his contact details.

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Thank you Frank, PM'd.

I appreciate the feedback and msgs. Would still really love to see some answers to the other questions in my OP.

Buenos Noches

Expat13 said:

I guess this is why its more difficult and costly to get Panamanian residency over DR.

Looks like you will have many options that will comply.

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* Yep, res (not guaranteed) starting at 80K isn't for me. It's not even the money as much as its 'not guaranteed', I can't imagine too many problems if you pay your way however it sounds way too risky.

windeguy said:

Keep in mind I am from the US and may have missed something, but I have been in Cabarete full time for over 7 years and never saw a Canada Day celebration, so I imagine the one you saw some time ago was rather unique.

I don't anticipate that you would have any issues getting residency in the DR as long as you have sufficient financial resources and you are in good health.

As for your business, you certainly have some rules and regulations to sort through before you make a final decision. Best of luck with that.

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* You are correct, it was 2001-2'ish, and it was the Ambassador that put it on so maybe it was only that year (I thought I remember him saying it was even bigger the year before). If there are no formal celebrations, you/we should start one!

Thanks your comments/luck.

engineerfg said:

Hi there, new to the board but not new to your problem...

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Mate, you went overboard on this I REALLLLLY appreciate you taking the time to put in so detail in your response. It sounds like the Gov will indeed to what they can to squeeze money out of me/my biz before my transition, however I've talked to a few that have done it rather bluntly.

Most say that when you go 'plan not to come back' for at least 2 years, which is what I'll probably be doing. If you don't mind I might reach out to you with a PM or two to ask a few sensitive Q's?

For the biz, what's wrong with just closing it here instead of selling it to myself queitly? It's a computer/some sound equipment, and some websites. The sites can be switched over to new owners (friends) easily for now.

I can't say too much without giving away important info but my money makes more money, and they've already taxed it, the websites come/go and none have lifelong value... What's wrong with being straight with the gov't in saying "You tax me too much, I'm moving abroad and starting a new business there, I closed my biz and gave you your last 40%, kthxbye". I wouldn't say that to them word for word but what's wrong with doing so? What else can they try to tax me on or hold me back for? Selling the biz to myself out there sounds like asking for a raised eyebrow for x years from CRA...?

Getting a few PM's from you folks, again I REALLY appreciate anyone that reaches out, and if chance should have that I'm there sooner than later I'd love to buy you a presidente sometime to say thanks in person.

This is a really nice group so far, look forward to meeting some of you soon.