Dominican Republic Elections Signify A Continued Growth

Last week’s presidential elections in the Dominican Republic caused quite a stir… not only for locals but also for attendees at the conference I hosted in Santo Domingo.

About a third of the conference-goers had pulled together all the paperwork necessary to be able to submit their residency applications while in the country for the event.

Unfortunately, it turns out the election tribunal uses the immigration offices for counting votes, meaning the immigration offices were closed most of the week for immigration work. They opened for immigration purposes at intervals, creating small windows when conference attendees could accomplish the required in-person meetings.

It was hectic, but, in the end, everyone was able to submit their files.

Meantime, the votes were counted and the results announced. Only not everyone was satisfied.

The count had incumbent Danilo Medina taking the day by a landslide in this first-round vote, meaning no runoff required.

Some groups raised questions about campaign finance… others suggested that votes had been purchased.

At first, the opposition demanded a re-count. Then they went so far as to ask for a re-vote.

Friday, the final day of my conference, the president and the opposition party staged a press conference to address the idea of a second election in the meeting room next to ours at the Sheraton Hotel. You can imagine the chaos.

When I flew Friday from Santo Domingo back to Panama City, the election result was up in the air. Medina couldn’t claim official victory… and some were beginning to think a do-over election might actually be planned.

Over the weekend, however, contacts in the DR let me know that the opposition couldn’t provide any evidence of foul play. Today, therefore, it’s official. Danilo Medina will preside over this country for another four years.

By all accounts over the last two weeks I spent in the Dominican Republic, Danilo (as he’s affectionately known among locals) is well liked and doing good things for this country. The economy has surged the last two years to become the fastest growing in Latin America and continues strong in 2016. Infrastructure and education are key parts of Danilo’s agenda. He appears to be working in earnest to improve his country’s future.

Signs of the healthy economy are evident in the capital, where many new residential buildings are under construction, new international brand-name hotels are opening, and utility cables are being put underground.

When I first visited the DR in 2005, I flew from Punta Cana to Puerto Plata then to Las Terrenas and back to Punta Cana for my flight out. Driving from destination to destination would have taken too long. Today, you can traverse this country quickly and easily by car. Highways from the capital to Las Terrenas and Punta Cana, two key points of interest, are as good as or better than well-maintained highways in the States.

The country boasts several international airports in addition to the one in the capital. Airports in Punta Cana, Puerto Plata, and Santiago all receive international flights. The new airport at Las Terrenas receives charters and, until last month, a direct Jet Blue flight. Word is that Jet Blue is renewing its application to use the airport and should resume flights soon.

As a travel and lifestyle destination, the DR has much to offer, including miles and miles of white-sand beaches and stunning coastline.

As an offshore destination, the country offers every flag-planting opportunity and could be the best offshore banking haven no one is talking about.

If you’re looking for a real estate investment destination, again, the opportunities are many, for both yield and annual appreciation.

The only downside I see in the context of a property investment in the Dominican Republic right now is too much choice. The better you get to know this place, the more certain you are that you want to take a position. The challenge is choosing where to focus.

My advice is to start with this question: Where in the country would you most enjoy spending time? Wherever that is, you’ll find good real estate investment options.

Start there.

Lief Simon

“Lief, in your Offshore Living Letter May 19 you responded to a gentleman inquiring about moving his U.S. IRA offshore. You stated, ‘Your U.S. IRA must remain with a U.S. custodian.’

“This is contrary to something Peter Zipper from Caye International Bank said at your Belize conference I attended. He stated that U.S. citizens are permitted to transfer IRAs offshore. Can you clarify?”

B.L., Simon Letter subscriber

The term “custodian” in U.S. tax law refers to an independent institution that maintains fiduciary responsibility for the IRA and its investments. The term “custodian” does not refer to the institution currently holding the funds.

All IRAs, by law, must have a custodian that is a U.S. bank or trust company.

However, if you choose a custodian that will permit offshore investments, you can then transfer the money in the IRA to an offshore institution to make other offshore investments on your behalf.

Meaning the assets of the IRA are offshore… the custodian is not.