Working remotely from Cabarete for a US firm

drisforme

Active member
May 28, 2016
206
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In the coming month ,I will be working remotely from Cabarete for a US firm.
It's a C2C software engineer contract.

I am currently assuming that I won't pay any tax in DR but will in the US and getting residency in DR should allow me to work without any problems.

My questions are related to :
-the type of corporation to create in the US and US state to register the corporation to minimize tax
-Know the tax deduction living and working outside the US.

Maybe some of our DR1 members went through this.I also asked my accountant.

Thank you for any advices.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
40,964
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In the coming month ,I will be working remotely from Cabarete for a US firm.
It's a C2C software engineer contract.

I am currently assuming that I won't pay any tax in DR but will in the US and getting residency in DR should allow me to work without any problems.

My questions are related to :
-the type of corporation to create in the US and US state to register the corporation to minimize tax
-Know the tax deduction living and working outside the US.

Maybe some of our DR1 members went through this.I also asked my accountant.

Thank you for any advices.
The corporation, whether yours or the US company involved, also has to be registered in the DR, and employment taxes paid.

There ain't no legal free lunch.
 

drisforme

Active member
May 28, 2016
206
71
28
The corporation, whether yours or the US company involved, also has to be registered in the DR, and employment taxes paid.

There ain't no legal free lunch.

Did hear differently from my DR lawyer regarding your point.Will ask again.
In addition ,not looking for legal free lunch .Looking for the best setup to minimize tax legally...
 

jstarebel

Silver
Oct 4, 2013
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If you "work" for a US company, there is another way. Your company pays for a legal work permit in the DR which gives you temporary residency, stay less than 30 days per year in the US, and your exclusion in set at $102,100.00 US tax free. You do have to worry about DR taxes, but they are much less. If you have have an LLC in the states, running everything through there lessens your DR tax burden. Get advice from more than one DR lawyer. You will find that things here can vary from one to the other.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
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Did hear differently from my DR lawyer regarding your point.Will ask again.
In addition ,not looking for legal free lunch .Looking for the best setup to minimize tax legally...
Who is the lawyer? I want to take him/her off the list.

The DR labor laws are very clear. This has been discussed ad nauseum on DR1.
 

drisforme

Active member
May 28, 2016
206
71
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If you "work" for a US company, there is another way. Your company pays for a legal work permit in the DR which gives you temporary residency, stay less than 30 days per year in the US, and your exclusion in set at $102,100.00 US tax free. You do have to worry about DR taxes, but they are much less. If you have have an LLC in the states, running everything through there lessens your DR tax burden. Get advice from more than one DR lawyer. You will find that things here can vary from one to the other.

Interesting option .
Will propose it to my CPA accountant and my DR lawyer...

Thank you !
 

drisforme

Active member
May 28, 2016
206
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Who is the lawyer? I want to take him/her off the list.

The DR labor laws are very clear. This has been discussed ad nauseum on DR1.
I appreciate your vigilance ! Let's put this as a mis-understanding between my lawyer and I for now..
Will see the feedback that I will be getting from @jstarebel's option.

Thank you
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
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I appreciate your vigilance ! Let's put this as a mis-understanding between my lawyer and I for now..
Will see the feedback that I will be getting from @jstarebel's option.

Thank you
Rebel is not totally correct.

The US company will have to register in the DR (neither cheap nor easy), will have to file timely labor and payroll reports, pay all labor costs (social insurance, etc.) and will be liable for all Dominican labor laws.

You do get a US tax exclusion for income earned offshore, but you will have to file Dominican Income Taxes and pay on income earned above RD$25000 (I think that's the amount; could be a little more or less) per month, about US$500 per month.

And when you file US taxes as a foreign resudent, you have numerous additional forms you have to file to make sure you are not holding money offshore Uncle Sam thinks may be his.

It's not as simple to become 100% legal in the DR as one may think.

The DR is a very difficult business environment.

Then again, you could just do what many do: don't do anything, go legally commando, and hope you don't get caught.
 

chico bill

Dogs Better than People
May 6, 2016
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Rebel is not totally correct.

The US company will have to register in the DR (neither cheap nor easy), will have to file timely labor and payroll reports, pay all labor costs (social insurance, etc.) and will be liable for all Dominican labor laws.

You do get a US tax exclusion for income earned offshore, but you will have to file Dominican Income Taxes and pay on income earned above RD$25000 (I think that's the amount; could be a little more or less) per month, about US$500 per month.

And when you file US taxes as a foreign resudent, you have numerous additional forms you have to file to make sure you are not holding money offshore Uncle Sam thinks may be his.

It's not as simple to become 100% legal in the DR as one may think.

The DR is a very difficult business environment.

Then again, you could just do what many do: don't do anything, go legally commando, and hope you don't get caught.

In which case he should stop posting his work plans and location
 

Garyexpat

Bronze
Sep 7, 2012
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The corporation, whether yours or the US company involved, also has to be registered in the DR, and employment taxes paid.

There ain't no legal free lunch.

I don't think this is true. I have a U.S. company paying U.S. taxes. I live here and do not have a D.R. company. I also spend a few months a year in Colombia and don't have a company there either. Since I work remotely I can work from anywhere in the world and don't believe I have to register everywhere I live/spend time.
 

suarezj519

Member
May 14, 2014
115
1
18
This situation is a bit complicated. I worked for a remote customer service company and even notified I was going to be in the DR (I am dual citizen) but have taxes paid through my state. Everything was fine up until out of the blue they pulled me in for a meeting stating that since they're not registered in DR that I have to be terminated. Obviously I fought this, stating there are many companies especially in SD operating in some form. The client I had though was surprisingly a client for one of the big call centers in SD, but obviously if you have a choice of making us salary or dominican salary,the choice is pretty obvious. I asked specifically why it was a big deal since I'm still paying taxes to the US. I don't really see how the government in DR forces the law on these businesses operating in the country unless they're advertised out on the internet or in public. The only way I see being able to work in the DR for a US company is freelance work. Its definitely a good gig making US or foreign money in the DR. But like always the man has to bring us down. Lol. If I find a gig like this that I can actually do from the DR, I'll get my plane ticket that moment and won't look back.
 

TropicalPaul

Bronze
Sep 3, 2013
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614
113
I find it quite astonishing that really clever people seem so surprised that a poor country like Dominican Republic could possibly want to tax them. Of course you'd like to come and live in DR, earn your money in US Dollars, not pay any tax in the US as a foreign resident, and then not pay any tax in DR.

But surely it's not difficult to see that it's us, the foreigners who have had the benefit of being born in rich countries, had a good education and chances that most Dominicans can only dream of, it's us that SHOULD be paying the tax here. And if we're not contributing economically to the country by paying our share, or more than our share, of taxes, then there's zero logic to us being here. So watch this space for a hard time from immigration or from DGII at some point. And don't use the argument that the taxes are used for corrupt purposes by the government so there's no point in paying them. It's their country, we are visitors, it is up to Dominicans to decide how to use, or misuse, the money we pay them.
 

Garyexpat

Bronze
Sep 7, 2012
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I find it quite astonishing that really clever people seem so surprised that a poor country like Dominican Republic could possibly want to tax them. Of course you'd like to come and live in DR, earn your money in US Dollars, not pay any tax in the US as a foreign resident, and then not pay any tax in DR.

But surely it's not difficult to see that it's us, the foreigners who have had the benefit of being born in rich countries, had a good education and chances that most Dominicans can only dream of, it's us that SHOULD be paying the tax here. And if we're not contributing economically to the country by paying our share, or more than our share, of taxes, then there's zero logic to us being here. So watch this space for a hard time from immigration or from DGII at some point. And don't use the argument that the taxes are used for corrupt purposes by the government so there's no point in paying them. It's their country, we are visitors, it is up to Dominicans to decide how to use, or misuse, the money we pay them.

I get paid in my U.S. bank attached to my U.S. company and pay taxes in the U.S. on my U.S. comapny. When I had businesses here I paid what I had to pay including employee insurance, taxes and liquidacion. If I live here 4 months, Colombia 4 months and say Panama 4 months (but still get paid by clients to my U.S. account) are you suggesting I would have to pay taxes in those 3 countries because I live there while I run my business remotely?
 

TropicalPaul

Bronze
Sep 3, 2013
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614
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I get paid in my U.S. bank attached to my U.S. company and pay taxes in the U.S. on my U.S. comapny. When I had businesses here I paid what I had to pay including employee insurance, taxes and liquidacion. If I live here 4 months, Colombia 4 months and say Panama 4 months (but still get paid by clients to my U.S. account) are you suggesting I would have to pay taxes in those 3 countries because I live there while I run my business remotely?

I guess it comes down to your residency status. If you are living in DR for 4 months, the only legal way to do that is to be a resident (it's been said many times that while you can overstay on a tourist card, this is not legal). And if you are legally resident then you should be paying local taxes. If you are running your business remotely as you say, there is an argument that your business is operating from DR - for example, in the case of the OP, he is effectively running a company based in DR servicing the US market during the time he is here, and for this reason he should be paying taxes.

There are a lot of taxes in DR to consider - for example if you run a company in addition to paying taxes on your staff wages, you should also be paying ITBIS and also paying a monthly profit tax in advance to DGII, as well as paying your staff 10% of your profits annually. And if you are running a catering or hotel business there's also the Propina Legal. If you own property there is the IPI, and if you earn more than about RD$ 40,000 there is personal income tax.
 

SNH

Active member
Jul 24, 2010
223
75
28
I don't think this is true. I have a U.S. company paying U.S. taxes. I live here and do not have a D.R. company. I also spend a few months a year in Colombia and don't have a company there either. Since I work remotely I can work from anywhere in the world and don't believe I have to register everywhere I live/spend time.

Exactly.

Some people makes things much more complicated than it has to be.

Setup a us corp, llc whatever
Open US business checking account
Pay yourself from that us corp
File US taxes.
Enjoy life


Just because you may be working remotely IN DR does not count as working in DR as your income comes from the usa 100%.

Like Garyexpat mentioned it's no different than if you worked for HP in usa remotely and decided to visit places around the world while working or came to punta cana for 2 months and did work from your laptop. YOU DO NOT have to setup and register or pay taxes in every country you visit.

Now if you had a physical location business in DR or local employees things get more complicated.

With the tax exemption for working abroad that income would need to come from a source outside the usa in addition to meeting the days out of country requirements which last I checked you need to stay off USA soil 330 days a year.

I would rather pay the usa taxes than deal with the massive headache of setting up a DR corp to get the exemption. You will open a BIG A#! can worms trying to setup and run companies here, even the rich dominicans that have established businesses have drama doing business here (ex. metro bus, bondelic bakery ).
 

SNH

Active member
Jul 24, 2010
223
75
28
I find it quite astonishing that really clever people seem so surprised that a poor country like Dominican Republic could possibly want to tax them. Of course you'd like to come and live in DR, earn your money in US Dollars, not pay any tax in the US as a foreign resident, and then not pay any tax in DR.

But surely it's not difficult to see that it's us, the foreigners who have had the benefit of being born in rich countries, had a good education and chances that most Dominicans can only dream of, it's us that SHOULD be paying the tax here. And if we're not contributing economically to the country by paying our share, or more than our share, of taxes, then there's zero logic to us being here. So watch this space for a hard time from immigration or from DGII at some point. And don't use the argument that the taxes are used for corrupt purposes by the government so there's no point in paying them. It's their country, we are visitors, it is up to Dominicans to decide how to use, or misuse, the money we pay them.

He will be making a contribution economically by living in Cabarete everyday, rent, food, utilities, and all his other living expenses which go directly to local businesses.
 

SNH

Active member
Jul 24, 2010
223
75
28
This situation is a bit complicated. I worked for a remote customer service company and even notified I was going to be in the DR (I am dual citizen) but have taxes paid through my state. Everything was fine up until out of the blue they pulled me in for a meeting stating that since they're not registered in DR that I have to be terminated. Obviously I fought this, stating there are many companies especially in SD operating in some form. The client I had though was surprisingly a client for one of the big call centers in SD, but obviously if you have a choice of making us salary or dominican salary,the choice is pretty obvious. I asked specifically why it was a big deal since I'm still paying taxes to the US. I don't really see how the government in DR forces the law on these businesses operating in the country unless they're advertised out on the internet or in public. The only way I see being able to work in the DR for a US company is freelance work. Its definitely a good gig making US or foreign money in the DR. But like always the man has to bring us down. Lol. If I find a gig like this that I can actually do from the DR, I'll get my plane ticket that moment and won't look back.

They terminated you due to payroll laws. They rather terminate you than register and setup and maintain a company in DR. All you had/have to do is let them continue to think you are working from your state. If you decide to go to dr for a few weeks or months and work on vacation keep it to yourself and use a VPN.

They would have did the same if you moved to a state they were not registered in.
 

Cdn_Gringo

Gold
Apr 29, 2014
8,671
1,133
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Some residency classifications are issued with a foreign income tax exemption and others are not. Having residency in this country may reduce the outward appearance of needing to pay DR taxes to the clueless immigration officials at ports of entry but may not actually impart any sort of tax exemption at all.

No residency and being here for long periods of time and not clearly being a retired visitor, could result in scrutiny if something is said or done to draw attention to these facts.

With any sort of residency and by keeping one's mouth shut it should be doable unless lady luck takes an extended vacation. Being a resident should reduce the likelihood of setting off any overstay flags that immigration may or may not be watching for that could lead to awkward questions.

When one wishes to obscure their behavior, it is often prudent to ensure that steps are taken to minimize the chances that totally unrelated circumstances inadvertently lead back to that which one wishes to obfuscate. I would think that the OP would be in a much better position to avoid the chance of income scrutiny by getting residency than if they opted not to do that and just wing it. What is possible to do today may not always be that way and if avoiding the meddling of corrupt and clueless officials is the goal, then it makes sense to limit one's exposure to those entities by being as above board as possible in every other aspect of one's daily existence.

In summary:

With no residency, the OP isn't supposed to be here and where their income comes from is not really the potential primary issue.

With residency that does not specifically impart tax free status, the likelihood of having issues is slim as things exist today but not guaranteed over time.
 
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CristoRey

Welcome To Wonderland
Apr 1, 2014
11,713
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If you are a legal resident or are running a registered DR company, pay taxes.
If you are not a legal resident and work for a US, European or other foreign based
company remotely.. why in the hell would you tell anyone?
 

karlheinz

New member
Oct 2, 2006
451
4
0
All you had/have to do is let them continue to think you are working from your state. If you decide to go to dr for a few weeks or months and work on vacation keep it to yourself and use a VPN.

yeah I agree, you gave them to much information: I've worked online since 2009, Adjunct Instructor of Nursing, physically both in the US and in the DR. I pay US taxes, SS, etc, my income goes directly to my US bank and I maintain a US address.

If can avoid US income taxes if you can prove you have been physically outside the country for the vast majority of the year, something like 330 day out of 360.

I work for a couple of Universities online programs, can do so from anywhere in the world that has internet service and am an employ of the Universities. I am not a resident of the DR and do not currently live on the island but have stayed maybe 6-8 months at a time there. Paid IBTIS, taxes on other services like cable, internet, contributed to the local economy