Successful investors have managed to pay less in taxes, which in turn has grown their assets and allowed them to build wealth by generating higher rental income.
Where can you save by buying under a company name?
- Interest on loans.
- Legal and closing costs.
- Book depreciation of the properties.
- Tax payments, such as the IPI (real estate property tax)
- It avoids or reduces inheritance taxes upon death, since the company lives on.
- Expenses generated by the property are deductible, for example:
- Maintenance fees
- Special assessments for repairs.
- Purchase of household appliances.
- Purchase of furniture.
- Internet, cable and electricity bills.
Various items are filed with the DGII as company expenses that cannot be claimed as expenses when you buy as an individual.
Corporations, businesses and companies in the Dominican Republic have benefited from government policies that lend funds to businesses at attractive rates to stimulate the economy.
1- Shares are movable property, and as such, their transfer is subject to a 2% withholding tax on the value of the transfer when the seller is an individual.
2- Companies are subject to an assets tax equal to 1% per year of the total value of their assets, excluding land located in rural areas.
Types of companies that can be incorporated in the Dominican Republic.
The legislation governing companies is found in the Commercial Code (Código de Comercio). According to the list published on the Contadores Dominicanos website, these are the types of companies by legal structure:
- Limited Liability Company (Sociedad de Responsabilidad Limitada, SRL).
- Individual Limited Liability Company (Empresa Individual de Responsabilidad Limitada, EIRL).
- Simplified Stock Company (Sociedad Anónima Simplificada, SAS).
- Stock Corporation (Sociedad Anónima, SA).
- General partnership (Sociedad en nombre colectivo).
- Limited partnership (Sociedad en comandita simple).
- Partnership limited by shares (Sociedad en comandita por acciones).
