Real Estate Investment Opportunities
Las Terrenas, Samaná
Dominican Republic
Prepared by: DanDannyDaniel Hussmann
829-644-8094
Las Terrenas Real Estate Investment Opportunities
This document has been prepared to show potential investors a unique location of the Dominican Republic called Las Terrenas in Samaná. In this area a number of beachfront properties are still available for sale by their original owners through various representatives.
The next few pages contain:
• Introduction to the Dominican Republic, Samaná, and Las Terrenas
• Transportation to the area
• Why invest in Las Terrenas
• Q&A section
• Brief guide to investing in the Dominican Republic
• Conclusion
Introduction to the Dominican Republic, Samaná, and Las Terrenas
The Dominican Republic
A tropical destination, the Dominican Republic is a Caribbean gem located in the Lesser Antilles, on the island of Hispaniola. Sunny days and cloudless skies attract visitors from all over the world, where they arrive to the welcoming sound of gentle waves rising and falling along the soft powdery sands. In the carefree atmosphere of the Dominican Republic you will quickly feel at home. Cheery locals, fresh food, fabulous weather, immaculate beaches and stunning terrain combine to create the ultimate island get-away.
There is no better place to get your feet wet, as you partake in water-sports of all kinds – windsurfing, kayaking, snorkeling, jet skiing, scuba diving, surfing and more.
Or stay dry on land and climb up verdant sloping hills, hike through fascinating nature preserves, and photograph rare species amidst thriving blooms and trees.
And, of course, you always have the option of simply dozing off on a hammock on the beach, the sun warming your skin while the breeze keeps you refreshed. In the Dominican Republic you will discover remarkable things you’ve never before experienced.
The Dominican Republic, only a two hour flight from the U.S., is one of the largest tourism destinations of the Caribbean, and is still growing rapidly. With a stable economy and the rapid expansion of the tourism industry, the Dominican Republic is a strategic place for
property investments. Low cost of labor and an affordable cost of living make this country a smart choice for the development of any tourism or real estate projects.
Samaná
Along the northeastern coast of the Dominican Republic lies the Samaná Peninsula, an immaculate region stretching into the clear blue Atlantic Ocean. Here you will find lush rainforests amidst flowing waterfalls and gentle mountains. Charming villages dot the area,
providing excellent destinations awaiting your discovery.
In addition to being known as a haven for birds and wildlife of all kinds, the Bay of Samaná is most commonly renowned for welcoming the stunning humpback whales during their annual migration, in the months of January through March. These large whales swim from
Greenland and Iceland to the Samaná Bay for a warmer winter, and to mate and feed. Mid-March, they head back to where they came from, only to return a year later so that the females can give birth in the warm Dominican waters.
In view of the outstanding natural beauty of the region and its unique natural and cultural resources, the initiative has been taken to have the contiguous area of the peninsula, the bay, and Los Haitises recognized as a Biosphere Reserve. This program operates at different levels: naturalist guide training, community education, working together with and advising the local and national tourism industry, government organizations and development agencies. The mid-term aim is to develop tourism which brings economic benefits to the local communities and the region, and conserves the outstanding natural beauty and resources for posterity and the long-term viability of the tourism sector.
Biosphere Reserves are protected areas in terrestrial, coastal, and marine environments that have been selected to serve as representative examples of a country´s natural and cultural patrimony. Reserve designation is provided by the United Nations Educational, Scientific
and Cultural Organization’s (UNESCO) Man and the Biosphere Program (MAB), initiated in 1971. The Biosphere Reserve is the oldest and only internationally recognized program which designates protected areas with the objective of making conservation compatible with economic and social development.
Las Terrenas
It is said that the most beautiful region in all of the Dominican Republic is the Samaná Peninsula… Jutting out along the northeastern coastline, it is home to a wealth of tropical nature’s boundless beauty.
And among the blooming rainforests, whispering mountains and
10 miles of golden beaches lies a hidden treasure: Las Terrenas.
Located on the north coast of the Samaná peninsula lays the quaint sea-side town of Las Terrenas. Just a few years ago, this small village of local fishermen was transformed into the perfect destination for those seeking a private tropical paradise. Bordered to the south by lush and vibrant green mountains and to the north by miles of undeveloped beaches, Las Terrenas is widely acknowledged as the most beautiful natural destination in the Dominican Republic.
Over the past 10 years, Europeans have done a spectacular job of building an international community here with fabulous restaurants, bed and breakfast hotels, and charming villas, without destroying or offending the local culture. The sandy roads that stretch along its
coasts are lined with over 40 bars and restaurants nestled between countless coconut trees.
Although the village is secluded from the large all-inclusive resort towns, it shares in their comforts of large supermarkets, international banks, internet cafes and an excellent telecommunications infrastructure.
Not only does Las Terrenas provide you with an abundance of activities and entertainment, but its surrounding areas bestow upon you even more options for an unforgettable time. You will find that the spirit of this delightful village is infused with an alluring ambiance
made up of the kindest of locals, the most spectacular of nature’s assets, a sublime climate, and an easy-going tropical optimism. Experience the area’s bohemian qualities and rustic atmosphere – from handmade arts and crafts found within the many villages, to divine
dishes overflowing with delectable food grown by the locals in the naturally enriched soil, trees, and plants; your senses will be impeccably treated.
Las Terrenas Village features lively shopping areas and ocean side restaurants and a neighboring full service marina currently under development.
Transportation to the area
Halfway between Punta Cana and Puerto Plata, Las Terrenas rests in an area that is secluded enough to provide the ultimate hide-away feel, while still emanating a vibrant and lively atmosphere thanks to the quaint surrounding villages. Here’s how to get there:
By Plane:
The Dominican Republic boasts seven International Airports, facilitating the arrival and departure of visitors from all over the world. With one National and two International Airports within a radius of 18 miles of Las Terrenas, it couldn’t be easier to get here.
• Arroyo Barril International Airport, located 15 miles south of Las Terrenas.
• El Catey International Airport, 18 miles west of Las Terrenas.
• El Portillo National Airport, 2 miles east of Las Terrenas
Each of these airports is easily accessible by plane via any of the Dominican Republic’s major International Airports, which include:
• Las Americas International in Santo Domingo, a 30-minute flight to Las Terrenas.
• Cibao International Airport in Santiago, a 35-minute flight to Las Terrenas.
• Puerto Plata International Airport, a 35-minute flight to Las Terrenas.
• Punta Cana International Airport, a 25-minute flight to Las Terrenas
You can purchase a seat on any one of the local airlines, or charter a private plane from any of the seven international airports to the Las Terrenas/Portillo airport for anywhere between $75 USD to $400 USD.
Several major airlines offer regular service into all seven of the DR’s international airports from North America and Europe.
Approximate flight times are as followed:
• New York: 3 1/2 hours
• Miami: 1 ½ hours
• Toronto: 5 hours
• Major European cities: 8-10 hours
By Land:
The simplest way to arrive by land at Las Terrenas is straight from Santo Domingo’s Las Americas International Airport. Driving north out of Santo Domingo, a short distance out of Bonao keep a look out for a sign pointing to Piedra Blanca, where after turning the road
will lead you all the way to Samaná. A new highway is under construction, which will reduce the driving time from Santo Domingo from 5 hours to 90 minutes.
Why invest in Las Terrenas
Unlike many of the coastal towns in the Dominican Republic, Las Terrenas has been mostly undiscovered by major economic tourism and development. The Peninsula of Samaná was mainly an eco-tourism destination and the perfect hideaway for many Europeans expats.
Most of the desired real estate is not owned yet by foreign investors or all-inclusive hotel chains, instead much of it is still owned by Dominican families and is still affordable.
This is about to change. The new international airport, El Catey (25 minutes drive from Las Terrenas), is now operational. Long distance carriers from Europe and The Americas are now bringing tourists directly in the Samaná Peninsula.
In May 2005 construction began on the new Santo Domingo - Samaná Highway that will reduce the drive time from 5 hours to less than 90 minutes.
In the past year alone, 4 all-inclusive, 5 star Bahia Principe resorts have opened in the peninsula, with a total of 1,600 rooms. The major project “Las Terrenas Country Club” is already under construction and selling its villas and condos on the golf course, designed by
the world renowned Dye family.
A marina project, called Puerto Bonito, with 150 slips, is also under construction near Las Terrenas.
Chains such as Wyndham and Meliá have acquired properties and options on several of the available land plots, narrowing the window
of available real estate in the area.
We believe that there is a 3 to 6 year window of opportunity to purchase land for development in the area of Las Terrenas, and, the sooner the better. It is likely that 2 to 3 years after completion of the
new international airport and highway, the prices of real estate will have drastically increased, catching up to and equaling the other Caribbean Islands.
In addition to the developments and chains mentioned above, more than 20 more projects are currently underway in Samaná. Presently, investing in Las Terrenas is not only about investing in one of the most beautiful areas in the Caribbean, but also about the possibility of getting an excellent ROI. We foresee land prices will continue rising, minimum, at a yearly rate of about 35%. Compared to the low rates of ROI in Europe and the US, this signifies great potential for earnings with minimal risk.
The Dominican Republic is one of the most stable countries in the Caribbean and Latin America. The Government has signed a free trade agreement with Canada and the US, as well as a number of other Latin American countries. Its currency has been stable at an average of 32 pesos per US dollar for the past 3 years. Its strategic geographic location along with very low labor and living costs makes this country very attractive for those who are looking for high profitability and security.
In 1998 Presidential Decree 21-98 ruled that foreigners can buy any and as much private property as they want, complete with the title of
possession (proof of ownership).
Tax Exemptions- There is a law applied to tourist areas with strong potential in need of development such as Las Terrenas. Certain companies in these areas of the country can benefit from exoneration of company taxes (up to 100%) as well as national and municipal
taxes on building permits and ownership certificates (100%).
Q&A
Q: Why the Dominican Republic, and why Las Terrenas?
A: The DR is arguably the most beautiful spot in the Caribbean, referred to by many as “The Land Of Dreams”. Las Terrenas boasts a magical strip of 15 kilometers of virgin beach, and a town with more than 40 international restaurants including everything from Italian,
French, and Swiss cuisine to Japanese sushi bars. It offers as well a broad selection of available activities including horseback riding, golf, scuba diving, windsurfing, tennis and many more within just minutes of town.
Q: What is the resident population of Las Terrenas?
A: 20,000 of which approximately 6,000 are foreigners.
Q: Where is the Dominican Republic and Las Terrenas? (see map)
A: The Dominican Republic occupies the eastern two-thirds of Hispaniola, located between the Caribbean Sea and the Atlantic Ocean. Las Terrenas is located on the northern coastline of the Samaná peninsula along Hispaniola’s north coast.
Q: How do I get to the Dominican Republic and Las Terrenas?
A: Several major airlines offer regular service into several cities in the DR, from cities in both North America and Europe. From the U.S. and Canada, Continental, American Airlines, and TWA have direct flights to the DR. Regular flights are available from Europe via Air France, Air Europe, American Airlines, Lufthansa and Iberia. The DR has 7 international airports, the three largest of which are in Puerto Plata, Santo Domingo and Punta Cana.
Q: What is the form of government in the DR?
A: The Dominican Republic has enjoyed more than three decades of stable democratic conditions. Presidential elections are held every 4 years, with a maximum of 2 consecutive terms allowed any given President. The DR is considered a model Latin American country.
Q: What is there to do for entertainment in the DR?
A: Sports: The DR offers a wide range of sports, both on land and in the water. They include: tennis, golf, polo, diving, snorkeling, horseback riding, deep-sea fishing, windsurfing, sailing, caving, mountain biking, basketball, baseball, and plenty more.
Beaches: Las Terrenas has an astounding 10 mile stretch of beach; the entire DR boasts over 250 miles.
Gambling: Gambling is legal in the DR. Large casinos and hotels offer card games, roulette, slot machines, as well as horse-racing and boat-racing and cockfighting. You must be age 18 or over to gamble in the DR.
Shopping: The relatively low rate of the peso in the DR makes shopping a sheer pleasure. An impressive variety of local crafts and products are available as well as various outside goods imported from all around the world.
Dining: Dominican cuisine offers a unique combination of local spices and cooking styles, with several of its seafood dishes known worldwide. The food speaks for itself- give it a try!
Q: What is the language of the DR?
A: Spanish, although English is widely spoken throughout the expat and business communities. As an international tourist destination, it is common to hear French, German and Italian in the popular areas of the country.
Q: What is the climate like in the DR?
A: The DR enjoys a tropical climate, with temperatures averaging between 24 C (75 F) in winter and 30 C (86 F) in summer; it tends to be considerably cooler in the mountains.
Q: As a foreigner, will I have to pay taxes on investment earnings in the DR?
A: No. The tax laws are the same as in the rest of the Latin American region; interest is accrued on your bank deposits and investments completely exempt from DR taxes.
Q: Can I bank in U.S. dollars?
A: Yes. Banco Popular, Leon, ScotiaBank, and others offer U.S. dollar and Euro accounts.
Q: Are utilities available?
A: Yes. Water, electricity, and gas services are all readily available.
Q: What are the closing costs associated with the sale of property?
A: Taxes = 5% of sale price. Fees= Lawyer fee = 1%. There are no other closing costs. It is also possible to go around the 5% transfer tax. The owners of big lots usually set up a company and transfer their personal land to their company as an asset, then sell the company
with the land and avoid paying the transfer taxes.
Q: Can my family and I obtain residence permits?
A: Yes. It is relatively easy to obtain a residence, through a good lawyer. For approximately $1,000 USD, and a few simple medical tests (blood and urine sample and an x ray of your lungs), you can get your residence within 3 months. Please see our BLOG at www.DRParadise.wordpress.com for a complete step-by-step outline.
Q: Would it be possible to legally work in the DR?
A: Yes, with a working permit, or by working for a Dominican corporation through contract.
Q: How may I receive my mail?
A: Mail may be picked up at either the post office or Western Union or at one of the many new pack and ship offices opening up
Q: Can I purchase house hold appliances, such as washers, dryers, refrigerators, etc.?
A: Yes, there are several large appliance and furniture stores in Las Terrenas.
Q: Are there any super markets in Las Terrenas? Do they stock usual products?
A: Yes and Yes. There are several large super markets in Las Terrenas and they stock everything you could possibly need.
Q: Is pest control a problem? Are exterminators available?
A: No. Yes.
Q: Are there English speaking doctors and dentists in Las Terrenas?
A: Yes
Brief Guide to Investing in The Dominican Republic
The Dominican government has created laws to promote foreign investment and there are no laws restricting foreigners from owning land. Before purchasing property, we recommend that buyers retain a Dominican real estate attorney to perform the due diligence required. We can recommend reputable attorneys, their fees averaging 1% of the purchase price.
Buying Property:
- The buyer and seller must sign a “Contract of Sale” before a notary (Notaries in the Dominican Republic are required to have a law degree). The Contract of Sale will contain the legal description of the property, the price and other conditions of sale.
- The Contract of Sale is then taken to the nearest Internal Revenue Office for payment of the appropriate taxes. (approximately 5% of purchase price unless it is a B to B transaction)
- The Contract of Sale and the Certificate of Title of the seller are deposited at the Title Registry Office where the sale is recorded.
- The Title Registry Office issues a new Certificate of Title in the name of the buyer and cancels the old Certificate issued previously to the seller.
Due Diligence:
To start the buying process, the seller should provide the buyer’s attorney with the following documents:
1. Copy of the Certificate of Title to the property.
2. Copy of the survey to the property.
3. Copy of sellers’ identification card (”Cedula”) or Passport.
4. Copy of the receipt showing the last property tax payment (IVSS) or copy of the certificate stating the property is exempted from the IVSS tax.
Once the documentation listed above is obtained, the attorney should address every item on the following checklist before the closing:
- Title Search: A certification should be obtained from the Title Registry Office regarding the status of the property, whether any liens or encumbrances affect it. The buyer should insist that his attorney confirm the results of the Registrar’s search personally by investigating the appropriate files at the Title Registry Office.
- Survey: An independent surveyor needs to verify that the property to be sold coincides with the one shown on the survey presented by the seller (unless the property is located in a previously verified subdivision.) Cases have occurred in which a buyer acquires title over a property some distance away from the one he believes to be buying due to careless work by a previous surveyor or by fraud from the seller. The survey should be checked even when the seller provides a government-approved survey.
- Possession: The attorney should verify that the seller is in possession of the property. It should be ensured that no squatter’s rights of any kind exist. Special precautions should be taken with unfenced properties outside known subdivisions. Fencing them before closing is advisable. If there are tenants on the property, the buyer should be informed that Dominican law is protective of a tenant’s rights and that evicting a tenant is time-consuming and expensive.
4. Employees: The seller should pay any employees working on the property their legal severance up to the time of the closing, otherwise the buyer may find himself liable for the payment later.
Taxes and Expenses on Property Transfers
Taxes and expenses on real estate transactions are roughly 5% of the sale price. This includes a 3% transfer tax, which can be eliminated many times by setting up and/or buying from a Dominican Corporation, a 1% document tax, and fees for registration stamps.
Taxes are paid before the closing at the title registry office.
Purchase of Real Estate by Foreigners
There are no restrictions on foreigners purchasing real estate in the Dominican Republic. The only requirement is, the real estate purchase must be kept on record at the Title Registry Office (Decree 21-98 of January 8, 1998).
Edited text for the Brief Guide to Investing in The Dominican Republic provided by the law firm of Guzman Ariza & Associates.
www.guzmanandassociates.com
Conclusion
The question is not whether it is going to be sold or not, it’s only a question of when and to whom. The offer of beach front properties on the booming Samaná market is limited. Meliá Resorts is most likely on the way to conclude a transaction on a 2.1 million square meter (519 acre) property on El Limon Beach. It was the biggest lot available on the market, and there’s a good chance they will try to buy out the other properties on that beach in order to secure the whole bay for their resort. Meliá has developed one of the biggest and nicest
resort complexes in the Punta Cana – Bavaro area, with 4 hotels, a 27 hole golf course and over a thousand residences and condos on the site.
And they’re not alone. Wyndham Resorts, Bahía Principe, Ocean World, the Dye Family, and many others have already shifted their focus to developing on this small peninsula. Even the Minister of Tourism has a huge project underway.
Because of the limited availability of properties on this stretch of beach, the security of any investments made in the area is solid. Once the prime real estate has all been purchased from their original owners, the only land available will be for re-sale, and not much of it.
For the serious investor, we highly recommend moving on this opportunity quickly, seeing the available properties, securing options, completing due diligence etc - these properties won’t wait.
It will be our pleasure to ensure each step runs smoothly in this process, we hope you find this presentation to be interesting and intriguing, the investment potential surely is.
DanDannyDaniel Hussmann
DR Paradise Real Estate
829-644-8094
www.DRParadise.com
www.DRCaribbean.net
www.DRParadise.wordpress.com
