Relocation intelligence

🇩🇴 Moving to Dominican Republic: tax, residency and cost of living

The Dominican Republic uses a territorial tax system: residents are in principle taxed only on Dominican-source income, while foreign-source income generally remains untaxed. An exception applies to foreign investment and financial income, which becomes taxable after three years of tax residency. Personal income tax (ISR) is progressive with a tax-free allowance of DOP 416,220 and rates of 15%, 20% and 25%, with the 25% top rate only applying above roughly DOP 867,123 per year. Employees also make mandatory social security (TSS) contributions: 2.87% for pension (AFP) and 3.04% for health (SFS), each capped and each deductible from the taxable base. There is no wealth tax, but there is an inheritance tax and an annual real estate tax (IPI). VAT (ITBIS) is 18% and the corporate income tax rate is 27%.

Thinking of moving to Dominican Republic? Here is the tax, residency, property and quality-of-life picture in plain numbers, with sources.

Key facts

Top income tax
25%
Corporate tax
27%
Capital gains
27%
Wealth tax
No
Inheritance tax
Yes
Cost of living index
42
Safety
4/10
Internet quality
6/10
Visa-free destinations
74
Foreigners can own property
Yes
Residency in
6 months
Citizenship in
5 years

Taxes

Progressive ISR with a DOP 416,220 tax-free allowance and a 25% top rate. TSS contributions (AFP 2.87% + SFS 3.04%) reduce the taxable base. Territorial system with an exception for foreign investment income after three years.

Residency and visas

Residency via pensionado (pension from USD 1,500/mo), rentista (USD 2,000/mo) or investor (from USD 200,000). Naturalization is possible after two years of permanent residency.

Property ownership

Foreigners enjoy virtually the same rights as local buyers and can freely purchase residential real estate in their own name, without a special permit.

Cost of living and quality of life

Tropical climate, low cost of living and a growing expat community, but with concerns around safety, public healthcare and variable infrastructure.

Passport and mobility

The Dominican passport gives visa-free or visa-on-arrival access to around 74 destinations (Henley 2026), which is limited by international standards.

Why people move to Dominican Republic

  • Foreign income largely untaxed

    Thanks to the territorial system, residents in principle pay no Dominican tax on foreign income such as pensions, dividends or online business profits earned abroad. Note the exception for foreign investment income after three years.

  • Accessible residency and low cost of living

    Residency via the pensionado, rentista or investor routes is relatively easy to obtain, foreigners can freely buy real estate, and the cost of living is well below Western European levels.

Honest trade-offs

  • De criminaliteit is relatief hoog, vooral in en rond Santo Domingo, en geweldsmisdrijven, overvallen en autodiefstal komen regelmatig voor.
  • De publieke gezondheidszorg is van lage kwaliteit, waardoor expats in de praktijk zijn aangewezen op duurdere private klinieken en een goede particuliere zorgverzekering.
  • Het territoriale stelsel kent een belangrijke uitzondering, want na drie jaar fiscaal inwonerschap wordt buitenlands inkomen uit financiële beleggingen en vermogenswinst wel in de Dominicaanse Republiek belast.
  • Stroomonderbrekingen komen regelmatig voor en de kwaliteit van wegen en infrastructuur wisselt sterk per regio, wat het dagelijks leven buiten de toeristische zones minder comfortabel maakt.

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Sources

Other destinations

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