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Why Would Someone Want to Bank in the Dominican Republic?
First and foremost, one must understand the idea of a FREE MARKET and what that means. A free market means, among other things, that capital will seek out the highest return or benefit. That is to say, investors will send their money where it suits them best, for the maximum return. It also means, whether you realize it or not, countries are in competition with one another for foreign investment money. In the case of the Dominican Republic, the central bank very much would like to see the US Dollar cash reserves of the country to increase for a variety of very positive reasons (as does any other small country that trades with the US, Europe or Asia).
How does one country make a bank account investment more attractive than the idea of a bank account in another? In other words, why invest in the Dominican Republic?
In order to attract investment and foreign capital, smaller countries try to compete with the only weapon they have, namely local legislation offering some sort of tax incentives. Many countries exist, which are not formally called “Tax Havens”, but they certainly have local legislation in place that permits a number of similar types of incentives. Such incentives might include tax-free bank account interest, zero tax on company profits if a business relocates, (which spurs the economy by offering new jobs the local citizens, namely the concept behind Free Zones). So, there may be a number of places to consider to do your banking, if you are interested in earning higher interest, and or benefit from zero local taxation. In addition, perhaps benefit from the fact that your personal banking information or interest is not proactively disclosed (the Dominican Republic being just one choice of many).
Many of Corcons clients open bank accounts and invest in the Dominican Republic because US Dollar or EURO interest rates are higher than in other countries, and also because the interest on such investments is 100% exempt from local taxation. In addition, the fact that such interest is in fact private, or not reported for local tax purposes, is also a very positive motivating factor as well (for many, possible the most important of all).