How the investor from the US obtained Dominica tax residency
Some of my friends have moved to the Caribbean to become tax residents. They even renounced their US citizenship to pay three times fewer taxes. I’m tired of paying high taxes too. So I decided to try.
James, 32 years old
has a game developer company
Clients’ names and photos have been changed
This case was provided by our expert
Legal and Compliance Officer, certified CAMS specialist
How the investor from the US obtained Dominica tax residency
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James' company designs video games and ranks among the top video game developers. His company revenue is about $3 billion. But much of it goes to taxes. So James decided to change his tax residency to pay fewer taxes.
James wanted to register his company in a Caribbean country and become a tax resident there. However, he knew that he had to stay in a country for at least 183 days a year for this. Therefore, he has to have an official document that allows him to stay in a country — a Caribbean passport.
On his friends’ recommendations, James turned to Immigrant Invest on 29 October 2021.
Using the story of James as an example, we will tell you:
how to get a Caribbean passport;
what benefits a Caribbean passport gives;
how to become a tax resident in a Caribbean country;
what you need to do to register a company in the Caribbean;
how to get to Dominica.
The first step to a new tax residency: Preliminary Due Diligence
Before cooperation and signing a contract with James, Immigrant Invest lawyers conducted a preliminary Due Diligence. The check helps eliminate the risk of failure in Citizenship by Investment programs.
Vladlena Baranova,
Head of Legal & AML Compliance Department, CAMS, IMCM
Our in-house Certified Anti-Money Laundering Compliance Officer carries out a preliminary Due Diligence check. Immigrant Invest’s lawyers study the investor’s situation in detail and warn them about any potential risks of rejection of their application.
Preliminary Due Diligence showed that James receives legal income based exclusively on his business, pays all the taxes in time, and has no criminal records and visa rejections. That means James can participate in any government citizenship program for investors.
Choosing a Caribbean country for tax residency
Five Caribbean countries have Citizenship by Investment programs: Antigua and Barbuda, St Kitts and Nevis, Dominica, Saint Lucia and Grenada.
Each program has at least two investment options. An investor can choose to make a non-refundable contribution to a government fund of $100,000 or buy real estate in the country worth $200,000 or more. In addition, an investor gets a Caribbean passport in 2—6 months.
$100,000
Minimum investment in exchange for Caribbean passport
All five countries are members of CARICOM. With one CARICOM passport, the investor can live in another CARICOM country with no limitations and restrictions. James liked that he could live and become a taxpayer in another country if he wanted to with one Caribbean passport.
Caribbean citizenship allows visa-free entry to more than 140 countries, including the Schengen Area and the UK. The US passport also allows visa-free access to these countries. But passports of Grenada and Dominica will enable the investor to travel to China without a visa which a US passport cannot.
James has decided that it does not matter what country he chooses now regarding taxes because he can change tax residency under CARICOM jurisdiction. He has chosen the Dominica program as it is more profitable for him: the low cost with visa-free entry to China.
James,
has a game developer company
Me and Linda, we don’t have kids. So we decided — why not try? If everything goes well, we will stay in Dominica. If not, we will move to another Caribbean country. Anyway, by now, we haven’t renounced our US citizenship. If we don’t like it here, we will return to the States. But you never know until you try.
The Dominica citizenship program terms
The investor must pass a Due Diligence check and fulfil the investment conditions to get a Dominica passport. Also, an investor pays the Due Diligence check, the application, notarial and bank fees.
An investor has two investment options: either a non-refundable contribution to a government fund of $100,000 or the purchase of the real estate in the country worth $200,000. Under the real estate purchase option, investors can sell the property after an average of 5 years and return the money.
James did not want to buy real estate in Dominica. He had no time for maintaining and controlling it. Instead, James and Linda wanted to rent an apartment in different parts of Dominica with the prospect of a quick move to another country. Buying real estate in Dominica would only burden them.
Immigrant Invest lawyers calculated expenses for James.
$164 100 — James’ payments under the Dominica citizenship program for a married couple
$150,000 — a contribution to the state fund
$11,500 — Due Diligence fee
$1100 — passport fee
$1100 — passport fee
$500 — administrative fee
Obtaining Dominica passports: stages James went through
1. Document preparation to apply for citizenship. Immigrant Invest lawyers have filled out an application form for James and prepared a package of investor documents:
passports;
police clearance certificates;
constituent documents of James’ business — to confirm the legality of income and money for investment;
a letter of recommendation from the bank;
James’ bank statement for the last two years;
marriage certificate;
medical insurances.
It took three weeks to prepare the documents.
When the lawyers collected the documents, James paid the Due Diligence fee for himself and his wife — $11,500. Then, immigrant Invest lawyers submitted James' documents to the Citizenship Unit of Dominica.
2. Due Diligence in the CBI unit of Dominica typically takes two to six months. James received the approval three and a half months after applying without additional requests.
3.5 months
Took Due Diligence in the Dominica CBI unit
3. Fulfillment of the investment condition. Along with the approval, the Dominica CBI unit sent details to contribute to the country’s Economic Diversification Fund. The fee is $150,000 for a married couple.
4. Obtaining a passport. The program unit confirmed that the payments were credited and began to produce naturalization certificates and second passports for James and Linda.
Four weeks later, the couple received their passports by mail to their designated address.
Stages of James’ participation in Dominica Citizenship by Investment program
29 October 2021
James turned to Immigrant Invest
+ 1 day
Preliminary Due Diligence
+ 3 weeks
Preparation of documents, filing of the application
+ 3.5 months
Due Diligence
7 March 2022
Approval of the application
+ 4 weeks
Preparation and forwarding of passports
4 April 2022
Obtaining passports
How to become a tax resident of Dominica
Tax residency in Dominica is a three-step process:
Registration in Dominica.
Registration of Tax ID
Obtaining a Tax Code.
It is not required to live on the island for more than 183 days per year at the registration stage.
1. Registration in Dominica. The tax documents indicate the address of permanent residence in Dominica. It is enough to rent a house for an extended period, e.g. a year.
Immigrant Invest real estate specialists had selected several properties for James to choose from. James and Linda then flew to the country on Dominica passports to see the apartments and open a bank account in Dominica.
The couple liked the apartment five minutes walk from the sea with one bedroom. The lawyers contacted the landlord in Dominica to check the legal transparency of the contract and the property. James signed a lease for a year for $12,000 and transferred money to the apartment owner from his account in Dominica.
When the couple finished with the apartment, they returned to the US.
2. Tax ID is an individual taxpayer number by which the person enters into the electronic database of Dominica taxpayers. But Tax ID does not give the right to pay taxes to the budget of Dominica.
Immigrant Invest lawyers started preparing a Tax ID application for James as soon as they received a copy of the rental agreement. First, they filled out an application form for the tax office of Dominica, which indicated the mailing address of the investor on the island. The lawyers also attached copies of the lease agreement and James’ Caribbean passport to the application.
The investor or his representative personally submits documents to the tax office In Dominica. Immigrant Invest lawyers transferred James’ documents to a local agent in Dominica who continued to act on behalf of the investor by proxy.
4 days
Took obtaining a Tax ID in Dominica
The Dominica IRS approved James’ application in four days and issued a confirmation certificate with a unique number. The investor entered a personal account on the website of the Dominica tax service.
3. Tax Code a resident receives to start paying taxes in Dominica. After receiving the Tax Code, the tax resident can submit a return to the tax office on the island.
The Tax Code is issued upon request to the Dominica Tax Office. James sent the request through his account on the tax service website.
Immigrant Invest lawyers helped James fill out an application for assignment of the Tax Code. Two days later, the investor received a notification that he was successfully assigned a taxpayer ID for filing returns and paying Dominica’s taxes.
2 weeks
Took a change of the tax residency
James became a full-fledged tax resident of Dominica on the 18th of April 2022 — the whole process took two weeks.
How to register a company in a Caribbean country
To register James’ company, Immigrant Invest lawyers filled the application form and uploaded scans of the documents certified with an apostille to the state portal.Business and taxes in Grenada, Dominica, St Lucia, St Kitts and Nevis, Antigua and Barbuda
James paid a state fee of $1200. Ten days after applying, James received a registration certificate and his company’s charter.
Documents for registering a company in the Caribbean:
Articles of Association/Incorporation.
Memorandum of association of the company.
Copies of passports of all shareholders.
Confirmation of the address of registration of all shareholders.
Confirmation of the authorized capital. The legislation does not establish a minimum, and the recommended amount is $50,000.
How to get to Dominica
You can get to Dominica either by plane or ferry. The island has two airports, Douglas-Charles Airport in the north and Canefield Airport in the south. As these are not international airports, you need to transfer from nearby islands such as Guadeloupe, Barbados, Antigua, Martinique, St. Lucia or St. Martin.
Getting the nearest Dominica islands is possible by plane from the US, Canada, the UK, France and the Netherlands. For example, airlines that operate from the US to the Caribbean are American Airlines, JetBlue Airways and Silver Airways — typically 52 flights weekly.
The last step to get to Dominica from the neighbouring islands is by ferry or plane. L’Express Des Iles ferry service operates between Dominica and St. Lucia, Martinique and Guadeloupe 5 days a week.
Moving to Dominica
While Immigrant Invest lawyers submitted all the necessary documents, James and Linda were packing and preparing to move. The couple bought the plane tickets and booked the ferry. Finally, James and Linda are ready to move to Dominica.
James,
has a game developer company
We are a little bit nervous but excited at the same time. I can tell if the game was worth the candle in a tax year. But for now, I want to see my friends that have settled down in the Caribbean long ago.
The couple will live 15 minutes by car from Dominica’s capital — Santo Domingo. The city is the industrial, commercial, financial centre and the chief seaport of the Dominican Republic.
James and Linda’s apartment is located on the coast with access to a secluded beach. The couple plans to go diving to see the incredible amount of biodiversity in the wrecks, caves, and reef systems.
Immigrant Invest is a licensed agent for government programs in the European Union and the Caribbean.
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