I gather that the new tax laws eliminate the savings that buying through a corporation used to afford. Since there are costs involved in setting up and maintaining a corporation, are there still advantages? I am a US citizen buying a condo in Sosua, if that has any bearing. - Thanks - Danny Weiss
- Thread starter Danny W
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Corporation for real estate purchase?
I dont know either, but are you asking from a Dominican or US Corporation position?
If from a Dominican Corporation position, I would like to piggy-back your question and ask the same of any savings and/or protection from a US Corporation position.
Thanks,
TEHAMA
If from a Dominican Corporation position, I would like to piggy-back your question and ask the same of any savings and/or protection from a US Corporation position.
Thanks,
TEHAMA
The advantages of holding real estate under a corporate structure are the following:
1. Your personal liabilities, both in the Dominican Republic as in your country of residence, will not affect the property held by the corporation.
2. It allows for quick resales since it is much easier and less expensive to resell all the shares of stock of the asset-holding corporation than it is to convey real estate.
3. In case of your death, it simplifies greatly the handling of the estate and the transfer of control to the heirs. Under Dominican law, inheritance of real property is governed by local statute which establishes that part of the estate must go to certain heirs by law (for example, a foreigner with a legitimate child must reserve 50% of the estate to that child irrespective of the existence of a will or of the law of his country of residence). This rule does not apply when ownership of real estate is held by a corporation. Also, if the title is in the name of one or several individuals and one of them dies, the procedure to change the title to the heirs is cumbersome and time-consuming.
1. Your personal liabilities, both in the Dominican Republic as in your country of residence, will not affect the property held by the corporation.
2. It allows for quick resales since it is much easier and less expensive to resell all the shares of stock of the asset-holding corporation than it is to convey real estate.
3. In case of your death, it simplifies greatly the handling of the estate and the transfer of control to the heirs. Under Dominican law, inheritance of real property is governed by local statute which establishes that part of the estate must go to certain heirs by law (for example, a foreigner with a legitimate child must reserve 50% of the estate to that child irrespective of the existence of a will or of the law of his country of residence). This rule does not apply when ownership of real estate is held by a corporation. Also, if the title is in the name of one or several individuals and one of them dies, the procedure to change the title to the heirs is cumbersome and time-consuming.
Fabio J. Guzman said:The advantages of holding real estate under a corporate structure are the following:
1. Your personal liabilities, both in the Dominican Republic as in your country of residence, will not affect the property held by the corporation.
2. It allows for quick resales since it is much easier and less expensive to resell all the shares of stock of the asset-holding corporation than it is to convey real estate.
3. In case of your death, it simplifies greatly the handling of the estate and the transfer of control to the heirs. Under Dominican law, inheritance of real property is governed by local statute which establishes that part of the estate must go to certain heirs by law (for example, a foreigner with a legitimate child must reserve 50% of the estate to that child irrespective of the existence of a will or of the law of his country of residence). This rule does not apply when ownership of real estate is held by a corporation. Also, if the title is in the name of one or several individuals and one of them dies, the procedure to change the title to the heirs is cumbersome and time-consuming.
Thanks For this info. Would you still recomend the corp route if personal liabilities are not an issue and a person has no children to leave the inheritance to? My experience with point two is that in most cases the individual holds numerous properties under the corp and thus is not interested in selling the corp but just the individual property in question.
My husband just died and we had no children together and the property automatically reverted to me. We would have only needed a company if we had children together.However we had wills in the Dominican Republic drawn up before his death that left all property to the survivor/twhitehead said:Thanks For this info. Would you still recomend the corp route if personal liabilities are not an issue and a person has no children to leave the inheritance to? My experience with point two is that in most cases the individual holds numerous properties under the corp and thus is not interested in selling the corp but just the individual property in question.
Attorney Guzman - thank you ! !
Your answer is extremely comprehensive, understandable to lay people & [AAmerican] laywers alike. Thank you.
1 question you didn't touch on: are their any differences between ownership in the name of an American corp. [regardless of particular state] & a DR corp. What differences? Positive factors? Negative factors? Again, thank you for a job well done.
Your answer is extremely comprehensive, understandable to lay people & [AAmerican] laywers alike. Thank you.
1 question you didn't touch on: are their any differences between ownership in the name of an American corp. [regardless of particular state] & a DR corp. What differences? Positive factors? Negative factors? Again, thank you for a job well done.
Numerous corps for numerous properties
Your problem with point #2 is easy to solve. Its no different than the way we own multiple properties here in NY. We have a separate corp. or LLC for each of our buildings and I would assume that the same principles would apply to Dominican properties although I dont own any. JOHNtwhitehead said:Thanks For this info. Would you still recomend the corp route if personal liabilities are not an issue and a person has no children to leave the inheritance to? My experience with point two is that in most cases the individual holds numerous properties under the corp and thus is not interested in selling the corp but just the individual property in question.
claudius2k, yes a Dominican corporation needs 7 shareholders to FORM (usually 5 or 6 are just appointed by the abogado from his office.) You also receive undated letters of resignation / assignment of their shares at the same time you receive your corporation paperwork, and you decide when they got out, and date the letters, etc.
A Dominican corporation only requires 2 shareholders to remain legal. (once a corporation only has one shareholder, it becomes illegal / void)
A Dominican corporation only requires 2 shareholders to remain legal. (once a corporation only has one shareholder, it becomes illegal / void)
Hi GringoCArlos, your post was very helpful. Thank you.GringoCArlos said:claudius2k, yes a Dominican corporation needs 7 shareholders to FORM (usually 5 or 6 are just appointed by the abogado from his office.) You also receive undated letters of resignation / assignment of their shares at the same time you receive your corporation paperwork, and you decide when they got out, and date the letters, etc.
A Dominican corporation only requires 2 shareholders to remain legal. (once a corporation only has one shareholder, it becomes illegal / void)
Could you answer two follow-ups:
1. What is the minimum age for a shareholder?
2. What are the Approx annual fees that must be paid to your lawyer/govt to keep the corporation running?
many thanks for your kind help.
beachlv
1. I think age of 18, but Fabio knows this for sure.
2. ballpark answer is RD$15,000 a year to do your filings, return, etc.
2. ballpark answer is RD$15,000 a year to do your filings, return, etc.
Shareholders should be of legal age (18) although minors in certain circumstances can also be part of a corporation. Annual maintenance costs should be around $150 to $250 US per company, not including the accounting work. If you include the accounting and the company has really no operations, for example, it just holds real estate, the standard fee is $300 US.
so you can form a company with 5 "provided" shareholders and after that hold it with only 2,
Also, can another company act as one of these 2 minimun shareholders?
thanks
Also, can another company act as one of these 2 minimun shareholders?
thanks
If you don't keep your corporation current, you won't be able to use it to sell or buy property and will be liable for a $20,000+ pesos fine. Additionally, you may incur in higher fees and expenses later when you try to update the company with a new lawyer.
The annual maintenance fee covers several things: (1) filing of tax returns (mandatory even if the corp. has no operation), (2) annual meeting (also mandatory), (3) provision for a domicile (usually the corp?s registered office is at the attorney?s who incorporated it ) and (4) provision for nominee shareholders to complete the 7 shareholders required by law.
The annual maintenance fee covers several things: (1) filing of tax returns (mandatory even if the corp. has no operation), (2) annual meeting (also mandatory), (3) provision for a domicile (usually the corp?s registered office is at the attorney?s who incorporated it ) and (4) provision for nominee shareholders to complete the 7 shareholders required by law.