Dominica

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ABOUT DOMINICA

Dominica at a Glance

One of the most naturally beautiful places in the world, this volcanically active island located in the lesser Antilles is known as the “Nature Isle of the Caribbean,” and is largely covered by thick rainforest and spotted with hot “sulphur” springs. Averaging only 50,000 visitors a year, tourism is still in its infancy in Dominica, where the principal economic generator continues to be in the agricultural sector. If you enjoy adventure and an active lifestyle, then Dominica may be for you. Although there are some great “boutique” style hotels, do not expect to find 5-star service or pampering on this island.

  • Zero tax: The island has no income, wealth or inheritance taxes
  • Good visa-free travel: The Dominica passport allows visa-free travel to more than 135 countries
  • Low cost: Dominica offers one of the most affordable legal programmes available to the global community
Population: 72 660 thousand
Form of government: Unitary parliamentary republic
Official & spoken languages: English
Currency: East Caribbean dollar
Time zone: UTC-4
GDP (PPP): $1.002 billion
GDP (PPP)/per capita: $14.166
Average salary: 1500 XCD (410€)
Unemployment: 5,4%
Major trading partners: United States, Bahamas, Jamaica, China, Saudi Arabia, France,

 

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Doing Business in Dominica

Advantages of doing business in Dominica

  • A minimum one shareholder and one director are required for Dominica company formation. The shareholder and director need to be residents in Dominica and can be the same person.   
  • The minimum capital requirement to complete Dominica company registration is  US 1, which must be fully paid-up. No par value shares are not permitted under Dominican company law.
  •  No public register of shareholders, directors or beneficial owners with Dominica company formation, thus preserving client confidentiality. In accordance with section 112 of Dominicas IBC Act, it is an offence for anyone to reveal any information regarding a Dominica corporation, except when related to criminal activity being investigated in Dominica itself. Breach of this law comes with a US 15 000 fine and two years in prison.
  • No company secretary is required for a Dominica IBC, but a registered agents is compulsor
  • Following Dominica company setup, no annual audited financial statements are required. Therefore, it is convenient and cost effective to maintain a Dominica company in the long-term
  • Dominica is a member of the Organization of Eastern Caribbean States, along with Anguilla and several other nations in the region.
  • Dominica company formation is a legitimate corporate structure which, when properly structured, can house international tax-exempt profits. A Dominica company also legally exempt from withholding tax, capital gains tax and value added tax

Disadvantages of doing business in Dominica

  • Dominica company formation may be perceived as a tax haven structure, increasing the risk that international banks compliance departments reject bank account opening applications from Dominican IBC
  •  A Dominica IBC cannot undertake banking, trust and insurance or re-insurance business without prior government approval. In addition, it cannot own local property
  • Dominican company formation is a relatively time consuming and tedious process. According to the World bank’s doing business 2016 survey. Dominica poorly ranked as the world’s 91st easiest place to do business in the world, its greatest difficulty in registering property

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 The World Bank “Ease of doing Business -ranking”

Overall rank 2016: rank 91th (change in rank: -2)
– Starting a business: rank 63 (average processing time 12 days)
– Dealing with construction permits: rank 115 (change in rank -3)(average processing time 175 days)
– Getting electricity: rank 37 (average installation time 61 days)
– Registering property: rank 165 (change in rank -4)(average processing time 42 day)
– Getting credit: rank 133
– Protecting minority investors: rank 66 (change in rank -2)
– Paying taxes: rank 98 (average company tax from profits 37%, (time 117 hours per year)
– Trading across borders rank 61 (change in rank -1)
– Enforcing contract: rank 83(average 681 days, average cost from standing amount 36,6%)
– Resolving Insolvency: rank 129 (Average time processing bankruptcy: 4 years)

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Moving to Dominica - Second Citizenship

Dominica – Citizenship by Investment Programme

Created as a stimulus for domestic economic growth in 1993, Dominica citizenship-by-investment is one of the most affordable legal program available to the global community.

A Dominica passport allows visa-free travel to more than 135 countries, including the United Kingdom and Caribbean and Commonwealth nations.

The island imposes no residency requirements and no income, wealth or inheritance taxes.

There is currently no mandatory interview requirement for the Dominican Citizenship by Investment Program; however, an interview may be required at the discretion of the government.

The granting of citizenship is at the sole discretion of the government. There is no guarantee that the applicant will be approved.

Citizenship by Real Estate Investment Option

In order to qualify for Citizenship, the applicant must invest US$200,000 minimum in an approved Real Estate Project.

Following approval of a real estate investment application, the following government fees are payable:

  • USD 50,000 for the Main Applicant
  • USD 25,000 for the Spouse
  • USD 20,000 for each dependent of the main applicant under the age of 18
  • USD 25,000 for each dependent of the main applicant aged 18-28 or 55+ years
  • US$ 3000 processing fee per each applicant
  • US$ 750 Fee for Certificate of Naturalisation per each applicant

Given that the application procedure under this option entails the purchase of real estate, this may prolong the processing time which is subject to the chosen property.

The real estate must be held for 3 years and may be eligible for re-sale under the Citizenship by Investment Programme after 5 years from the original purchase date.

Due Diligence (in the event of Real Estate investment and Government Donation)

  • US$ 7500 for the main applicant
  • US$ 7500 for the spouse
  • US$ 4000 for the each dependent above the age of 16
Investment minimum: US$200,000
Real estate holding period: 3 yrs
Legal & Escrow: 1-2%

Government processing fees:

Investor: US$53,750
Spouse: US$32,250
Dependents age >18 US$23,270
Dependents age 18-25 US$28,750

Approved Real Estate in Dominica

  1. CABRITS RESORT KEMPINSKI
  2. TRANQUILITY BAY – CURIO, A COLLECTION BY HILTON
  3. JUNGLE BAY RESORT, DOMINICA
  4. SILVER BEACH RESORT & SPA

Citizenship by Donation Option

Official entity: Government Direct

If the investor is the sole applicant (no citizenship for family), the single investor would be required to make an investment of US$100,000.

For families looking for second citizenship, investment requirements are listed below:

  • Single Applicant – US$100,000 non-refundable investment
  • Applicant plus spouse – US$175,000 non-refundable investment
  • Family Application (Two applicants plus one spouse and two children below the age of 18 years) – US$200,000 non-refundable investment
  • Additional Dependent – US$50,000
  • US$ 3000 processing fee per applicant
  • US$ 750 Fee for Certificate of Naturalisation per applicant

In the event the applicant is not accepted, the contribution is returned minus the application fee. The granting of the citizenship is at the sole discretion of the government of Dominica – most applicants are only denied when due diligence reveals false information or that the applicant has a criminal record.

When the investor has been approved, the payment is made to the Dominica government account. Dominica views the economic citizenship program as part of its national capital mobilization portfolio and channels the above mentioned funds towards school construction, hospital renovation and promotion of the offshore sector.

Once the required background interview is completed and documents are submitted, a Certificate of Naturalization and passport may be issued in as fast as eight weeks. However, processing times can vary depending upon the country of current citizenship. The Minister of Legal Affairs will sign the Certificate of Naturalization authenticating citizenship of the Commonwealth of Dominica.

Donation Amount:

Investor only: US$100,000
Investor + Spouse US$175,000
Investor + Spouse+ 2 kids US$200,000

Need more details about citizenship program? Please call us or fill in the form and we will get back to you shortly!

Freedom Index: Dominica

Overall rank 2016: 31th (60/100 points)
– Property rights: 60/100 points
– Freedom from taxes: 73/100 points
– Freedom of speech/religion: 94/100 points
– Limited government: 62/100 points
– Gun rights: 42/100 points
– Drug rights: 25/100 points
– Freedom from corruption: 58/100 points
– Freedom from inflation: 86/100 points
– Business freedom: 75/100 points

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Taxation in Dominica

Taxes in Dominica

  • Residence: A company is deemed to be resident if it is incorporated in Dominica, or if incorporated outside Dominica but managed and controlled in Dominica.
  • Basis: A resident company is taxed on worldwide income. A non-resident company is taxed on income derived or sourced from Dominica.
  • Taxable income: Taxable income is calculated as net profit before tax, adjusted for non-deductible expenses and allowable deductions.
  • Taxation of dividends: Dividend paid to residents are not subject to tax. Dividends paid to a nonresident are subject to a withholding tax of 15%
  • LossesLosses can be carried forward for a maximum of five years. Losses utilized may offset only 50% of the taxable income any one year. The carryback of losses is not permitted
  • Foreign tax creditAre granted for taxes paid in another country, even where no tax treaty is in place that provides for a foreign tax credit. The credit is limited to the lesser of the tax payable in the other country or the tax charged in Dominica on the income.
  • Participation exemption: No
Taxable income: 25%
Taxation of dividends:
VAT registration: The registration on threshold is a total value of supplies exceeding XCD 120 000 per annum. Voluntary registration is allowed at the discretion of the Comptroller of Inland Revenue,
– VAT Rates: The standard rate is 15%. A reduced rate of 10% applies in the tourism sector and a 20% rate applies to the telecommunications sector. Certain goods and services also may be zero-rated or exempt.
Surtax: No
Alternative minimum tax: No
Withholding tax (general): 15%
– From Dividends Dividends paid to a nonresident are subject 15% withholding tax
– From Royalties Royalties paid to a nonresident company are subject 15% withholding tax.
– From Interests Interest paid to a nonresident company are subject a 15% withholding tax.
– Technical services Technical service fees paid to a non-resident company are subject a 15% withholding tax.
Transfer tax: The following fees may apply in addition to spam duty, an assurance fund feed of 1 of the value of the property transferred a judicial fee of 2,5% of the value of the property and a solicitor+s fees 3% of value of the property, on which a 15% VAT is payable.
Capital gains tax: Are not subject to tax.
Real property tax: Dominica does not have property tax. However, a municipal tax is paid to the city and village councils.
Social security: 5% of employee earnings, up to XCD 6 000, per month
Payroll tax: No
Stamp duty: No
Capital duty: No
Tax treaties: Treaties are in force with CARICOM
Anti-avoidance rules:
– Transfer pricing No
– Thin capitalization rule No
– Disclosure requirements No

Compliance for corporation:

  • Tax year: The year is based on the company’s fiscal year end.
  • Consolidated returns: Consolidated returns are not permitted each legal entity must file a separate return.
  • Filling requirements: The tax return must be filed within three months of the company’s fiscal year end, along with financial statements.
  • Penalties: Penalty of 10% of the tax owed or XCD 100, plus 1% of the tax owed for each month the return is outstanding, may apply.
  • Rulings: May be requested
  • Tax authorities:  Inland Revenue Department

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Personal Taxation in Dominica 2016

Personal taxation basis:

  • Resident individuals are taxed on their worldwide income. Nonresident individuals are taxed on income derived on sourced in Dominica.

Tax Residence:

  • An individuals is considered resident if he/she is physically present i Dominica for at least 183 days in a calendar year

Filling status:

  • Each individual must file a tax return, joint filing is not permitted.

Income tax rates in Dominica

  • 30% on income excess of XCD 60 000

Social security payments in Dominica:

  • An employee contribute at a rate of 5% of earnings, up to XCD 6 000 per month

Inheritance/estate tax in Dominica:

  • No inheritance tax, but gifts may be subject to transfer tax

Net wealth/net worth tax in Dominica:

  • No

Tax year:

  • Calendar year

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OUR OFFERS IN DOMINICA

  • business planning, tax consulting by Novasigma
    BUSINESS CONSULTING FROM 125€/h
  • TAX PLANNING FOR PRIVATE PERSONS FROM 850€
  • TAX CONSULTING FOR CORPORATIONS FROM 2.490€

 

NOVASIGMA IN DOMINICA

Consulting & advisory services for Dominican entities

  • Due diligence process
  • Foreign Market entry & Supplier search
  • Business Plans & Descriptions
  • Development & Capital Advisory
  • International Tax Planning
  • Funding & Investor Search
  • Citizenship in Dominica
  • Business Restructuring via Offshore entities
  • Exit Strategy & IPO
  • Problem solving in Georgia | by Novasigma Accounting & Law partner office

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Incorporation, administration & business services in Dominica

Incorporation services in Dominica

  • New company formations in Dominica
  • Company Closures and liquidations in Dominica

Company administration in Dominica

  • Legal registration address service for a Dominican company
  • Company secretarial service for a Dominican company
  • Nominee director services
  • Nominee shareholder services

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Additional business services in Dominica (by Novasigma Certified Partners)

  • Virtual office services in Dominica
  • Hosting services
  • Real estate in Dominica (offices, trade facilities, industrial)

Value Added Tax (VAT)

  • VAT registration
  • Advice on VAT scheme options
  • VAT returns and declarations

Legal services for Dominican companies and business owners

Legal services in Dominica for all Novasigma Clients including companies and their owners and directors

Novasigma has built in Dominica a team of lawyers, associates and legal advisers to assist our clients with a business and tax planning, overseas business operations, risk management and other legal matters. Primarily focused on business transactions, Novasigma Accounting & Law corporate attorneys are a great asset to a small and large businesses. With a background on corporate law, our corporate lawyers and legal advisers have an in depth knowledge on the transactions that may put your business at risk of litigation. These include contracts and negotiations, taxation laws, business structuring, buy/sell agreements, and intellectual property, among others.

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Banking, financial and insurance services in Dominica

Banking services in Dominica

  • Business bank accounts
  • Personal bank account opening for business owners
  • Payment service providers
  • Investment solutions
  • Alternative banking solutions

Financial services in Dominica

  • Debt collection services
  • Invoice funding & cash flow solutions
  • Factoring
  • Leasing
  • Wealth management

Insurance services in Dominica

  • Insurances for corporations
  • Insurances for business owners and their families

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Tax residencies & Immigration services

  • Meeting with Novasigma before applying Dominican residency
  • Assistance in applying a tax residency from Dominica
  • Personal bank account in Dominica
  • Second Passport
  • Address service available for Novasigma business clients

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NEWS AND BUSINESS OPPORTUNITIES IN DOMINICA

  • New rules for Dominica CIP makes it easier for your family to gain dual citizenship

 

Interested in Dominica? Please leave us a message and we will get back to you shortly

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