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Bahia Principe Residences HOW TO INVEST IN DOMINICAN REPUBLIC Group Pi ero MARCH 2020

IS IT A GOOD INVESTMENT IS IT A GOOD INVESTMENT TO BUY A PROPERTY IN THE DR There are many reasons that may prompt the decision to buy a house in the Dominican Republic The process of acquiring land or building property has been reduced to its simplest form to encourage real estate purchases But the most important reason is surely economic Indeed the country is in strong economic growth favouring an atmosphere conducive to business affecting all sectors including real estate Many expats chose to buy an apartment which they use a few months and rent out the rest of the year for profitable returns WHY BUY A PROPERTY IN THE DOMINICAN REPUBLIC Interests are divided into two parts either a personal interest or a commercial interest As for personal interest the beaches of the Dominican Republic will delight you For those who can afford it the construction of a luxury home on the Dominican residential neighbourhoods guarantees a dream accommodation It is also possible to take advantage by renting the property And this is the second interest because the Dominican real estate sector is evolving the real estate gains are constantly increasing so if a property is destined only for a summer residence the best way of profitability is to rent it out WE RE A PASSIONATE COMPANY FILLED WITH PASSIONATE INDIVIDUALS

And the Dominican government aware of the investment that could be made by the luxury real estate sector adopts a proactive policy by setting up areas of settlement for residential areas The high season is the DR is quite long compare to Spain and other countries where people vacation In fact all in all you can count approximately 6 months of high season where rental prices rise by 20 to 50 percent boosting further you chances of profit On top of that of a meagre 1 of annual property taxes expect to pay no taxes on the revenues made from your rentals Aside from the favourable general conjuncture you ll need to consider the location of your future property Some places are seeing more growth that others For example Playa Nueva Romana is one of the hottest spot in the DR in terms of real estate investments and growth at the moment The market is fuelled by the local expats who invested and keep investing here and growing middle class from the big cities bored of Punta Cana and looking a piece of paradise at still an affordable price WE KNOW THAT IF WE WANT TO SET THE STANDARD WE HAVE TO GO THE EXTRA MILE

Bahia Principe Residences HOW TO BUY A HOUSE IN DOMINICAN REPUBLIC In the Dominican Republic foreigners can easily acquire real estate the future owners have the choice to buy this property in their name or on behalf of their company domiciled in the Dominican Republic Whether for individual use during the holidays or as a secondary home or for a lucrative use the purchase of a house in the Dominican Republic requires a minimum of knowledge AT BAHIA PRINCIPE WE WILL MANAGE YOU FOR YOU IN ALL LEGAL PROCEDURES FOR THE PURCHASE OF YOUR PROPERTY MARCH 2020 Before any action is taken a local lawyer must be employed to dig up the most information about the property to be purchased such as verifying the accuracy of the deeds or whether the property is cleared of all sorts of property loads Knowledge of the procedures and services involved such as the tax administration is a sine qua non The reliability of the purchase will depend on the seriousness of the lawyer

Bahia Principe Residences DISCOVERY TOUR AT BAHIA PRINCIPE RESIDENCES WE BELIEVE IN LOVE AT FIRST SIGHT THE POWER OF A GOOD FIRST IMPRESSION AND FIRST HAND EXPERIENCES MARCH 2020 Although simplified procedures require the production of reliable documents Already the conditions for granting are the same for both premises and for foreigners the purchaser must simply carry a passport to establish his identity After agreeing on the price of the property a compromise of sale is signed between the two parties with a down payment of around 10 of the total amount Then the transaction will take place in the presence of a local notary chosen by the purchaser so far the purchaser must always rely on his lawyer who must help him in drawing up the sales contract Generally the funds required to acquire the property are deposited by the buyer by bank transfer or by check to the notary s trust account The funds are then forwarded to the seller once the title to the property is allocated After the remittance of the funds the title is transferred in the name of the buyer or the company and then registered in the Dominican title register The registration of the transfer of real property with the registration of the securities requires the payment of the following taxes and charges 3 of the sale price 1 of the sale value of the property Constitution and cancellation of a mortgage modification of title duplicate The new law of the real estate register guarantees a transparent system for the purchase sale and registration of real estate in the Dominican Republic Payment of these fees can be made by bank transfer or by certified check

Bahia Principe Residences HOW TO GET A LOAN MORTGAGE The mortgage loans are quickly available to US Canada English and Dominican citizens with Bank The first thing to do when looking to buy a property in the DR with a loan is to verify if you can actually apply for a loan It will makes things move faster if you are decided on a specific property and also help your negotiation with the seller The documents required are the following Copy of your passport plus other identification Two last tax returns Employment letter if employed A bank reference from your main bank For other foreigners loans are also available with a few additional documents required All these documents can be send via email The bank will usually lend you up 70 of the value of the property or less if you wish so Meaning that a down payment of at least 30 of the value of the property will be necessary from your side Bahia Principe mortgage We provide our own financing in dollars with an attractive interest rate REQUEST INFORMATIONAt Bahia Principe Residences we have striven for decades to help our clients buy the home of their dreams offering financing with a competitive fixed interest rate Advantages Grupo Pi ero and Bahia Principe guarantee Reservation with USD 1 000 10 down payment option The most competitive fixed interest rate on the Dominican marketInstant authorization MARCH 2020

Bahia Principe Residences For other foreigners loans are also available with a few additional documents required All these documents can be send via email The bank will usually lend you up 70 of the value of the property or less if you wish so Meaning that a down payment of at least 30 of the value of the property will be necessary from your side The value of the property taken into account is the lowest amount between either the estimated value or the agreed buying price of that property The estimated value is the value given by the assessor from the bank who will estimate the property according to a set of criteria such as lot size built size built year location number of bedrooms materials used etc MARCH 2020 By experience this value is usually close to the selling price still expect 10 variation to be on the safe side Once the bank notifies you that you pre qualify for a mortgage loan or a loan for a new construction this verification takes 1 to 2 weeks you will be given access to an online form available in English which you must fill in At this point there is 99 of chance that you will qualify for the loan Once the terms are satisfying for both parties you ll have to be in the Dominican Republic to sign the actual contract in person You might be able to discuss with the bank to send someone with a power of attorney to sign in your name

Bahia Principe Residences IF YOU DECIDE TO BUILD A HOUSE All the infrastructure of the products we offer at Playa Nueva Romana has been designed to offer security and comfort Using top quality materials and always taking into account the growth and preservation of the environment which characterise Grupo Pi ero making Caribbean property one of the most promising investments in the Dominican Republic In order to create spaces full of light life and freshness inspiring a relaxed easy lifestyle We have invited important architectural firms to take part in our residential development in the Dominican Republic with previous experience in our project Bahia Principe Riviera Maya in Mexico If you decide to build a house with a local constructor you are able to take 2 separate loans one to buy the land itself and one to build your house Before or after having reserved the lot you set your eyes on with usually 10 of selling price you ll need to secure financing if needed Once the total value of the land is paid at the signature of the Act of Sale the title of ownership is transferred to you Then when you decide to start the construction The bank will loan you the money by instalments as the construction progresses MARCH 2020 At each step of the construction generally 3 or 4 phases divided in payments of 20 to 30 the bank will send an expert assessor to assess that the money loaned did go into the construction and not the pocket of the constructor Only when all the boxes are checked the bank will send you the next instalment which you will send to the constructor thus retaining the control over the process and your money The interests to be paid will be calculated only on the amount loaned and at the end of the construction the loan will switch into a classic mortgage loan

Bahia Principe Residences WHAT YOU SHOULD CHECK WHEN YOU BUY A PROPERTY UNDER CONSTRUCTION 1 Translate the Promise of Sale agreementBefore signing the Promise of Sale agreement you or your representative should have the document translated into English or your native language Verify if the Promise of Sale agreement has the following clauses a Does it specify when the construction will be concluded b Does it indicate that if the property is not finished by that date that the developer will pay interest on the amount already paid for every month the construction is delayed c Is the lot where the property is going to be built currently owned by the developer or is it in the process of being transferred to the developer d Has the developer obtained the necessary permits and licenses needed to build e Does it indicate that if the property built is a few square meters smaller than what was sold to you that you will receive a refund or credit for the difference in size SANDY JONES AIMEE LORENZ LIM PAUL SANDERS 2 If in doubt hire a reputable real estate attorney An attorney preferably fluent in BECKHAM English or your native language should be able to review the agreement and answer the questions posed above If there is a clause in the contract that you do not agree with then it should be corrected until both sides are satisfied 3 Please confirm if the property reservation payment is refundable Often time the amount paid to reserve a unit is not refundable Prior to paying the reservation amount please perform all the needed due diligence Do not allow yourself to be rushed by the salesperson by claims that there are many interested in the same unit or that you may lose it if you do not act quickly 4 If buying a home or condo for investment purposes ask for the projected ROI Try to find out the occupancy rate of already built units or of properties nearby Do not believe without proof claims of a high ROI Ask for proof of the occupancy rates during different seasons of the year high low medium Run the numbers yourself to see if the projected ROI is reachable with the occupancy rates you have investigated Make sure you add other fees like furnishings administration fees HOA fees electricity internet taxes and other incidental expenses to your calculations in order to formulate a more realistic projection of your potential return MARCH 2020

Bahia Principe residences SHOULD I BUY IN MY OWN NAME OR WITH A COMPANY Under company name First you need to consider the initial extra fees related the constitution of the company itself Eventually extra corporate taxes if the company makes benefits 27 Commercial Real Estate Buy and Sell with profit It is the most advantageous solution as you will pay less taxes because the company is able to deduct all expenses such as construction maintenance accounting and insurance before profits Protection The property is more protected in the case if you have financial legal issues because nobody can claim the property under the company name because it is the owned by the company and not you directly Real Estate Developer For example in the case you buy a piece of land divide it and sell lots afterwards you will benefit from more advantages if the land is owned under company name because you will have to handle different contracts risks responsibilities with the future buyers Avoid future conflicts with partner In case of divorce the property remains under the company name and is separated from the marriage contract MARCH 2020

Bahia Principe Residences Under individual name Under individual name Properties which are in the name of an individual are subject the IPI an annual property tax of 1 of the value of the property estimated by the government That 1 is to be paid on the excess amount over US 147 000 US There is exception for unbuilt lots or farms outside city limits and properties whose owner is 65 years old or older who has registered it in his or her name for more than 15 years and has no other property Also you don t have to deal with the company s legal requirements and documents MARCH 2020

Bahia Principe Residences TAXES AND EXPENSES BUYING TAXES Taxes must be paid before filing the purchase at the Title Registry Office Taxes and expenses on the conveyance of real estate are approximately 3 5 of the government appraised value of the property as follows 3 Transfer Tax Law 28804 Fee for the transfer of the title of ownership calculated on the highest of estimated value or purchasing price Meaning that the taxes are paid based on the market value of the property as determined by the tax authorities not on the price of purchase stated in the deed of sale Buyers wishing to lessen the impact of transfer taxes have the option of using a loophole in the law which allows the contribution in kind of property into corporations without paying transfer taxes For this cooperation from the seller is essential From 0 5 to 1 5 notary fees depending on the estimated value of the house and the complexity length of the transactions ANNUAL PROPERTY TAXES Properties held in the name of an individual are subject to an annual property tax IPI of 1 of government appraised value in excess of RD 7 138 000 pesos 147 000 U S eSxA c eNpD t Y f o rJ u bu l t l o t s o r fA a rI m im t sNaZ n dL p r o p e r tPi eAs UwLh oSsA eN ow r S is RiE IM DnEeR OnN EiS MsEoEu t s i d e c i t yL lO 65 years old or older who has registered it in his or her name for more than 15 years BECKHAM and has no other property If the property is held by a corporation no property tax is due Instead the corporation must pay a 1 tax on corporate assets However any income tax paid by the corporation will constitute a credit toward the tax on assets so that if corporate income taxes paid are equal to or higher than the taxes on assets due the corporation will have no obligation to pay taxes on its assets Rentals in the Dominican Republic are exempted of taxes MARCH 2020

WHAT IS THE ACTUAL PROCESS FOR OBTAINING DOMINICAN RESIDENCY In case an individual wants to obtain Dominican residency this person needs to apply for a Residence Visa at a Dominican consulate in his hers country of origin The applicant also needs to present a birth certificate bank references marriage certificate and a police report All of the mentioned documents must be apostilled After all the documents are approved the consulate will put a stamp of the Residence Visa in the passport of the applicant The Residence Visa is valid for one year Keep in mind that the time to process the visa can take from a couple of days to a month It really all depends on the consulate As soon as the applicant obtains the Residence Visa in the passport the consulate will immediately return all of the mentioned documents The next step for the applicant is to take all these documents and papers to an attorney in the Dominican Republic The applicant will have to head out to Santo Domingo for a brief medical exam and go once again so he or she could pick up the residency card Since the residency card is valid for a year the applicant needs to renew the residency every year for the next 5 years All applicants should be aware of the fact that the cost of a professional attorney who will handle the first residency process will be around 1 200 Luckily renewals cost less

Bahia Principe Residences ABOUT PI ERO GROUP Bahia Principe Residences MORE THAN 40 YEARS CREATING EXCITING EXPERIENCES HISTORY We are a Spanish tourism group founded by Pablo Pi ero in 1977 OUR RAISON D TRE Is to create exciting experiences To this end we are present throughout the entire travel value chain through our hotel residential and golf division our tour operator and incoming service provider and other atdestination services that complement our offer NUMBERS 27 Hotels 14 000 Rooms 14 000 Co workers 13 000 Residential properties planned 12 069 598 Surface area m2 MARCH 2020

Bahia Principe Residences Meet the team Playa Nueva Romana Resort Living in the Caribbean The Autov a del Este is the road to paradise in the eastern section of the Dominican Republic The highway runs along the entire east coast until it reaches our destination Once there the immense stone arch welcomes you to Bahia Principe Residences Playa Nueva Romana inviting you to live life in a different way OUR WAY In addition to the area s charms the exquisite architecture of its villas and apartments the security of the complex and the exclusivity of its avenues the residential complex has a new added value living alongside the luxury hotels of Bahia Principe All owners and tenants can purchase a Day Pass OR Night Pass that allows them to enjoy all the services offered by the hotels Excursions themed restaurants visit to the different nature reserves in the area beauty treatments live shows music entertainment and all the activities offered by the hotels while enjoying the privacy of living in a house MARCH 2020

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