Newspaper: Noticias SIN.
Web page:
http://www.antena-sin.com/noticiassin/Details.asp?id_article=7722
May 8th, 2007. 08:02: 00 A.M. INVESTORS.
Foreigners will develop ecological tourism in Miches.
The information was disclosed in the course of a meeting that was headed in this city by the American entrepreneur Ted Khell, pioneer of the tourist project in Punta Cana.
New York. - A group of foreign investors has shown interest in investing a high sum of money in a development project in the Municipality of Miches, Dominican Republic, to give impulse to that zone as an exclusive and ecological tourist destiny, preserving its natural resources, that are its main attractions.
The information was disclosed in the course of a meeting that was headed in this city by the American entrepreneur Ted Khell, pioneer of the tourist project in Punta Cana, and John R. Gagain Jr, Executive Director of the Comisión Presidencial sobre los Objetivos del Milenio y el Desarrollo Sostenible (COPDES) (“Presidential Commission on the Millennium Goals and Sustainable Development”).
Previous to the activity a detailed study was presented by the students of Architecture at Columbia University, on the guidelines to give impulse to the development of Miches.
To the presentation of the report on Miches attended, in addition to Gagain, Mrs. Vivian Sundset, Attached Director of COPDES, and authorities of the Secretaría de Estado de Turismo (“State Secreetariat for Tourism”) and the Secretaría de Estado de Medio Ambiente y Recursos Naturales (“State Secretariat for the Environment and Natural Resources”). In addition, journalist Arismendy Calderón, in representation of the Comité Pro-Desarrollo Turístico y de Conservación de los Recursos Naturales de Miches (“Pro-Tourist-Development Committee and of Conservation of the Natural Resources of Miches (Conatura-Miches). In the debates, professors of Columbia University took part.
The meeting was summoned by professors Don Melnick and Elliot Sklar, Directors of the Centro de Medio Ambiente, Economía y Sociedad (“Center for Environment, Economy and Society”), and the Centro de Planificación Urbana Sostenible (“Center for Sustainable Urban Planning”), respectively, of Columbia University. Influential real estate investors from New York City participated.
A group of these investors formalized the commitment to visit the Municipality of Miches in the next month of June with the professors of Columbia University and representatives of the Secretaría de Estado de Turismo and the Secretaría de Estado de Medio Ambiente y Recursos Naturales.
Some of them that took a look at the report elaborated by students of that training center were impressed with the natural beauties of this region, specially its beaches, rivers, its natural resources and the impressive lagoons Redonda and Limón.
The interest of this visit is for managing to give impulse to key investments for the development of sustainable tourism, such as a marine, restoration of the lagoons Redonda and Limón (in the community of El Cedro), rehabilitation of the hydric river basins and cascades, as well as complement works.
It was not informed, in the immediate term, about the initial investment in this ambitious project.
The initiative in that zone was applauded by the gentlemen Robert Roskind, president of the Crescent Hotels Group, Martin Kaplan and Peter Resnick, investors, who saluted the role of Columbia University to choose Miches as a pilot project to turn that municipality in a model of creation of jobs, mobilization of the economy, and conservation of its natural resources.
The group of investors expressed, separately, the interest to continue supporting Columbia University, and to collaborate with the Dominican authorities, the Mayorship of Miches, and the community in general, to give impulse to its development, to reduce poverty, and to fulfill the Millennium Development Goals of the United Nations.
FREDDY MIRANDA
www.freddymiranda.com
Traduced by Orlando Alcantara
Friday, July 27, 2007
SALTO DEL LIMON AT SAMANA DOMINICAN REPUBLIC
Source: Turismo Visión, Informative Service of TourismWatch
Wep page:
http://www.tourism-watch.de/esp/2esp/2esp.dominicana/index.html
By Leida Bouglas.
Dominican Republic: Organizing community groups around eco-tourist practices and conservation of Nature.
The case of Salto del Limón, Samaná, Dominican Republic.
The Cascade of El Limón comprises a great deal of the landscaping attractions at the peninsula of Samaná, Dominican Republic. The tourist potential that has this region offers the possibility of promoting a type of tourism that ties the generation of benefits by means of the reasonable use of the resources with the conservation of Nature.
Nevertheless, until now the region is rather developing a traditional tourism. Most of the tourists buys the “all-included” packages from their countries of origin, which remarkably limits the economic benefits in the destiny countries. This type of tourism development, in addition, can be pernicious to the environment.
A “Diagnosis of the Tourist Sector in the Province of Samaná” from the year 1996 confirms this problem. The affected local people recognized the necessity to develop solutions and changes.
In search of an improvement, the non-governmental organization CEBSE (Centro para la Conservación y Ecodesarrollo de la Bahía de Samaná y su Entorno) (“Center for the Conservation and Eco-development in the Bay of Samaná and its Surroundings”) promotes strategies for the sustainable development of tourism (Plan de Manejo Integrado para la region de Samaná, 1996) (“Plan of Integrated Management for the region of Samaná”, 1996). This plan implies the involvement of the local community groups and opportunities of income for them by means of regulated eco-tourist practices.
Around the cascade, approximately 1,500 people live in the rural localities of Rancho Español, Arroyo Surdido, Loma de la Cruz y El Café. Ten percent of the population works directly in tourism, and many families obtain indirect benefits. In tourism, which began to introduce itself about 15 years ago, many see an economic alternative, more attractive than agriculture.
Nevertheless, problems, unexpected by the communities, arose. This new form of work distorted the social customs, and individualism and lack of fellowship arose, which are not very usual in the rural population. Competitions and conflicts of opposite interests increased, and the quality of the tourist services diminished.
CEBSE tried to generate a base of confidence among the community groups. Activities began to improve the situation together, like, for example, the rehabilitation and the improvement of the footpaths. Little by little, people began to organize themselves and to act in a collective way to improve their services, and mainly to defend their interests before agents like the tourist operators. In workshops, they formulated their expectations, and the strengths and the weaknesses were analyzed. Important subjects of the discussion were the community organization, tourism in general, the protected areas and eco-tourism, the improvement of the tourist services, social problems, other additional economic activities to eco-tourism, and the tourist capacity of the region.
As a result, the Asociación Comunitaria de Ecoturismo del Salto del Limón (ACESAL) (“Eco-Tourism Community Association of Salto del Limón”) arose. Another decisive step was the participation of public organizations in the certification workshops, which contributed “to break the ice”. An important role was also played by the continuous self-evaluations of the activities.
Results and learned lessons.
In order to regulate the tourist activity, ACESAL, CEBSE, and SECTUR (Secretaría de Estado de Turismo) (“State Secretariat for Tourism”) discussed and elaborated in a participative way a plan of norms of use and control for the area. This process was historical, because it was the first time that this governmental instance made norms with previous consultation and approval of the communities. Another result was the formation of a community association integrated by 200 members from 5 communities to make joint activities for the improvement and the sustainable management of the eco-tourist activities. There was also a significant improvement in the infrastructure and the tourist offering, and a greater recognition of the importance of the conservation of the natural resources. Voluntary actions are organized to improve the quality of the place like, for example, cleaning or reforestation initiatives.
Although the Board of Directors and the sub-commissions of ACESAL meet periodically and conduct positive debates, weaknesses in the decision making process, assuming shared responsibilities, and the operation of the same association exist. Nevertheless, ACESAL has begun to take its first steps.
At the moment, there are 12 micro-companies that offer tours with an on-foot or on-a-horse tour guide towards the cascade or the beaches and the caves of the region, as well as typical food, and there are sales of local crafts, organic cacao or coffee. In the tourist activity almost 200 people work directly. Salto del Limón received approximately 20,000 visitors in 1998. The increasing number of visitors raises the expectations put in tourism, but they also increase the disappointments.
The authoress is consultant at Centro para la Conservación y Ecodesarrollo de la Bahía de Samaná y su Entorno (CEBSE) and contributor to the DED (Deutscher Entwicklungsdienst / Servicio Alemán de Cooperación Social-Técnica / German Service of Social and Technical Cooperation)
FREDDY MIRANDA
www.freddymiranda.com
Traduced by Orlando Alcantara
Wep page:
http://www.tourism-watch.de/esp/2esp/2esp.dominicana/index.html
By Leida Bouglas.
Dominican Republic: Organizing community groups around eco-tourist practices and conservation of Nature.
The case of Salto del Limón, Samaná, Dominican Republic.
The Cascade of El Limón comprises a great deal of the landscaping attractions at the peninsula of Samaná, Dominican Republic. The tourist potential that has this region offers the possibility of promoting a type of tourism that ties the generation of benefits by means of the reasonable use of the resources with the conservation of Nature.
Nevertheless, until now the region is rather developing a traditional tourism. Most of the tourists buys the “all-included” packages from their countries of origin, which remarkably limits the economic benefits in the destiny countries. This type of tourism development, in addition, can be pernicious to the environment.
A “Diagnosis of the Tourist Sector in the Province of Samaná” from the year 1996 confirms this problem. The affected local people recognized the necessity to develop solutions and changes.
In search of an improvement, the non-governmental organization CEBSE (Centro para la Conservación y Ecodesarrollo de la Bahía de Samaná y su Entorno) (“Center for the Conservation and Eco-development in the Bay of Samaná and its Surroundings”) promotes strategies for the sustainable development of tourism (Plan de Manejo Integrado para la region de Samaná, 1996) (“Plan of Integrated Management for the region of Samaná”, 1996). This plan implies the involvement of the local community groups and opportunities of income for them by means of regulated eco-tourist practices.
Around the cascade, approximately 1,500 people live in the rural localities of Rancho Español, Arroyo Surdido, Loma de la Cruz y El Café. Ten percent of the population works directly in tourism, and many families obtain indirect benefits. In tourism, which began to introduce itself about 15 years ago, many see an economic alternative, more attractive than agriculture.
Nevertheless, problems, unexpected by the communities, arose. This new form of work distorted the social customs, and individualism and lack of fellowship arose, which are not very usual in the rural population. Competitions and conflicts of opposite interests increased, and the quality of the tourist services diminished.
CEBSE tried to generate a base of confidence among the community groups. Activities began to improve the situation together, like, for example, the rehabilitation and the improvement of the footpaths. Little by little, people began to organize themselves and to act in a collective way to improve their services, and mainly to defend their interests before agents like the tourist operators. In workshops, they formulated their expectations, and the strengths and the weaknesses were analyzed. Important subjects of the discussion were the community organization, tourism in general, the protected areas and eco-tourism, the improvement of the tourist services, social problems, other additional economic activities to eco-tourism, and the tourist capacity of the region.
As a result, the Asociación Comunitaria de Ecoturismo del Salto del Limón (ACESAL) (“Eco-Tourism Community Association of Salto del Limón”) arose. Another decisive step was the participation of public organizations in the certification workshops, which contributed “to break the ice”. An important role was also played by the continuous self-evaluations of the activities.
Results and learned lessons.
In order to regulate the tourist activity, ACESAL, CEBSE, and SECTUR (Secretaría de Estado de Turismo) (“State Secretariat for Tourism”) discussed and elaborated in a participative way a plan of norms of use and control for the area. This process was historical, because it was the first time that this governmental instance made norms with previous consultation and approval of the communities. Another result was the formation of a community association integrated by 200 members from 5 communities to make joint activities for the improvement and the sustainable management of the eco-tourist activities. There was also a significant improvement in the infrastructure and the tourist offering, and a greater recognition of the importance of the conservation of the natural resources. Voluntary actions are organized to improve the quality of the place like, for example, cleaning or reforestation initiatives.
Although the Board of Directors and the sub-commissions of ACESAL meet periodically and conduct positive debates, weaknesses in the decision making process, assuming shared responsibilities, and the operation of the same association exist. Nevertheless, ACESAL has begun to take its first steps.
At the moment, there are 12 micro-companies that offer tours with an on-foot or on-a-horse tour guide towards the cascade or the beaches and the caves of the region, as well as typical food, and there are sales of local crafts, organic cacao or coffee. In the tourist activity almost 200 people work directly. Salto del Limón received approximately 20,000 visitors in 1998. The increasing number of visitors raises the expectations put in tourism, but they also increase the disappointments.
The authoress is consultant at Centro para la Conservación y Ecodesarrollo de la Bahía de Samaná y su Entorno (CEBSE) and contributor to the DED (Deutscher Entwicklungsdienst / Servicio Alemán de Cooperación Social-Técnica / German Service of Social and Technical Cooperation)
FREDDY MIRANDA
www.freddymiranda.com
Traduced by Orlando Alcantara
MICHES DOMINICAN REPUBLIC
Newspaper: Diario Digital F-27
Web page: http://www.diariof27.com/articulo,928,html
A FORGOTTEN TOWN; A HIDDEN AND ABANDONED MUNICIPALITY.
Miches .................... A treasure to be discovered.
LET US RECOVER MICHES TO GIVE LIFE TO THE DEAD.
By José Rafael Sosa.
Wednesday, July 25th, 2007.
MICHES. It has already finished the noisy party and the cultural activism that was held on the activity of Miches Art 2007, but this population is left in its same position on the road, waiting for its tourist development.
***
A zone with an extraordinary tourist potential that it is just now starting to have a glimpse of. Miches deserves to see itself from a necessary positive perspective.
***
Miches’ history it’s the history of waiting. Miches has some unique attractions from the tourist and eco-tourist points of view, so it is needed that the eyes of the Government and the investors turn their staring look towards that locality, where they are failing to fulfill their duties of developing it (the Government) and preventing themselves of making money (the investors) with every day that goes by without establishing projects and properties.
Miches, simply, waits patiently for its development.
A long time has gone by since the year of 1808, when the settlement of the first families coming from the Cordillera Oriental (“Eastern Mountain Range”), coming from El Seybo and other nearby regions, and improvised several inexpensive houses for their temporary permanence in this zone, attracted by the beautiful marine coast.
Miches waits. It waits for opportunities and justice.
Columbia University recommends the creation of a Patronage Council.
A fundamental step for developing tourism in Miches is the creation of a Patronage Council, integrated by the most influential sectors in the population life: City Hall, Government institutions, academicians in environmental sciences and in urban development, the community through business people and residents, as well as non-governmental organizations.
This recommendation is made by the Columbia University that sent to Miches a team of professors and students, who investigated the conditions that this population holds for its development.
The intention is to create the Comisión de Desarrollo de Miches (“Development Commission for Miches) (with its respective planning office, and an auditing commission), with the massive participation of the women’s sector from the urban and rural areas. Work groups would be created in the following topics: economic development, environmental balance, youth, women, historical and cultural aspects, population increment, and public health.
FREDDY MIRANDA
www.freddymiranda.com
Complided and traduced by Orlando Alcantara
Web page: http://www.diariof27.com/articulo,928,html
A FORGOTTEN TOWN; A HIDDEN AND ABANDONED MUNICIPALITY.
Miches .................... A treasure to be discovered.
LET US RECOVER MICHES TO GIVE LIFE TO THE DEAD.
By José Rafael Sosa.
Wednesday, July 25th, 2007.
MICHES. It has already finished the noisy party and the cultural activism that was held on the activity of Miches Art 2007, but this population is left in its same position on the road, waiting for its tourist development.
***
A zone with an extraordinary tourist potential that it is just now starting to have a glimpse of. Miches deserves to see itself from a necessary positive perspective.
***
Miches’ history it’s the history of waiting. Miches has some unique attractions from the tourist and eco-tourist points of view, so it is needed that the eyes of the Government and the investors turn their staring look towards that locality, where they are failing to fulfill their duties of developing it (the Government) and preventing themselves of making money (the investors) with every day that goes by without establishing projects and properties.
Miches, simply, waits patiently for its development.
A long time has gone by since the year of 1808, when the settlement of the first families coming from the Cordillera Oriental (“Eastern Mountain Range”), coming from El Seybo and other nearby regions, and improvised several inexpensive houses for their temporary permanence in this zone, attracted by the beautiful marine coast.
Miches waits. It waits for opportunities and justice.
Columbia University recommends the creation of a Patronage Council.
A fundamental step for developing tourism in Miches is the creation of a Patronage Council, integrated by the most influential sectors in the population life: City Hall, Government institutions, academicians in environmental sciences and in urban development, the community through business people and residents, as well as non-governmental organizations.
This recommendation is made by the Columbia University that sent to Miches a team of professors and students, who investigated the conditions that this population holds for its development.
The intention is to create the Comisión de Desarrollo de Miches (“Development Commission for Miches) (with its respective planning office, and an auditing commission), with the massive participation of the women’s sector from the urban and rural areas. Work groups would be created in the following topics: economic development, environmental balance, youth, women, historical and cultural aspects, population increment, and public health.
FREDDY MIRANDA
www.freddymiranda.com
Complided and traduced by Orlando Alcantara
Thursday, July 26, 2007
ECO TOURIST PRACTICES IN DOMINICAN REPUBLIC
Source: Turismo Visión, Informative Service of TourismWatch
Wep page:
http://www.tourism-watch.de/esp/2esp/2esp.dominicana/index.html
By Leida Bouglas.
Dominican Republic: Organizing community groups around eco-tourist practices and conservation of Nature.
The case of Salto del Limón, Samaná, Dominican Republic.
The Cascade of El Limón comprises a great deal of the landscaping attractions at the peninsula of Samaná, Dominican Republic. The tourist potential that has this region offers the possibility of promoting a type of tourism that ties the generation of benefits by means of the reasonable use of the resources with the conservation of Nature.
Nevertheless, until now the region is rather developing a traditional tourism. Most of the tourists buys the “all-included” packages from their countries of origin, which remarkably limits the economic benefits in the destiny countries. This type of tourism development, in addition, can be pernicious to the environment.
A “Diagnosis of the Tourist Sector in the Province of Samaná” from the year 1996 confirms this problem. The affected local people recognized the necessity to develop solutions and changes.
In search of an improvement, the non-government organization CEBSE (Centro para la Conservación y Ecodesarrollo de la Bahía de Samaná y su Entorno) (“Center for the Conservation and Eco-development in the Bay of Samaná and its Surroundings”) promotes strategies for the sustainable development of tourism (Plan de Manejo Integrado para la region de Samaná, 1996) (“Plan of Integrated Management for the region of Samaná”, 1996). This plan implies the involvement of the local community groups and opportunities of income for them by means of regulated eco-tourist practices.
Around the cascade, approximately 1,500 people live in the rural localities of Rancho Español, Arroyo Surdido, Loma de la Cruz y El Café. Ten percent of the population works directly in tourism, and many families obtain indirect benefits. In tourism, which began to introduce itself about 15 years ago, many see an economic alternative, more attractive than agriculture.
Nevertheless, problems, unexpected by the communities, arose. This new form of work distorted the social customs, and individualism and lack of fellowship arose, which are not very usual in the rural population. Competitions and conflicts of opposite interests increased, and the quality of the tourist services diminished.
CEBSE tried to generate a base of confidence among the community groups. Activities began to improve the situation together, like, for example, the rehabilitation and the improvement of the footpaths. Little by little, people began to organize themselves and to act in a collective way to improve their services, and mainly to defend their interests before agents like the tourist operators. In workshops, they formulated their expectations, and the strengths and the weaknesses were analyzed. Important subjects of the discussion were the community organization, tourism in general, the protected areas and eco-tourism, the improvement of the tourist services, social problems, other additional economic activities to eco-tourism, and the tourist capacity of the region.
As a result, the Asociación Comunitaria de Ecoturismo del Salto del Limón (ACESAL) (“Eco-Tourism Community Association of Salto del Limón”) arose. Another decisive step was the participation of public organizations in the certification workshops, which contributed “to break the ice”. An important role was also played by the continuous self-evaluations of the activities.
Results and learned lessons.
In order to regulate the tourist activity, ACESAL, CEBSE, and SECTUR (Secretaría de Estado de Turismo) (“State Secretariat of Tourism”) discussed and elaborated in a participative way a plan of norms of use and control for the area. This process was historical, because it was the first time that this governmental instance made norms with previous consultation and approval of the communities. Another result was the formation of a community association integrated by 200 members from 5 communities to make joint activities for the improvement and the sustainable management of the eco-tourist activities. There was also a significant improvement in the infrastructure and the tourist offering, and a greater recognition of the importance of the conservation of the natural resources. Voluntary actions are organized to improve the quality of the place like, for example, cleaning or reforestation initiatives.
Although the Board of Directors and the sub-commissions of ACESAL meet periodically and conduct positive debates, weaknesses in the decision making process, assuming shared responsibilities, and the operation of the same association exist. Nevertheless, ACESAL has begun to take its first steps.
At the moment, there are 12 micro-companies that offer tours with an on-foot or on-a-horse tour guide towards the cascade or the beaches and the caves of the region, as well as typical food, and there are sales of local crafts, organic cacao or coffee. In the tourist activity almost 200 people work directly. Salto del Limón received approximately 20,000 visitors in 1998. The increasing number of visitors raises the expectations put in tourism, but they also increase the disappointments.
The authoress is consultant at Centro para la Conservación y Ecodesarrollo de la Bahía de Samaná y su Entorno (CEBSE) and contributor to the DED (Deutscher Entwicklungsdienst / Servicio Alemán de Cooperación Social-Técnica / German Service of Social and Technical Cooperation)
FREDDY MIRANDA
Compiled and traduced by Orlando Alcántara
Wep page:
http://www.tourism-watch.de/esp/2esp/2esp.dominicana/index.html
By Leida Bouglas.
Dominican Republic: Organizing community groups around eco-tourist practices and conservation of Nature.
The case of Salto del Limón, Samaná, Dominican Republic.
The Cascade of El Limón comprises a great deal of the landscaping attractions at the peninsula of Samaná, Dominican Republic. The tourist potential that has this region offers the possibility of promoting a type of tourism that ties the generation of benefits by means of the reasonable use of the resources with the conservation of Nature.
Nevertheless, until now the region is rather developing a traditional tourism. Most of the tourists buys the “all-included” packages from their countries of origin, which remarkably limits the economic benefits in the destiny countries. This type of tourism development, in addition, can be pernicious to the environment.
A “Diagnosis of the Tourist Sector in the Province of Samaná” from the year 1996 confirms this problem. The affected local people recognized the necessity to develop solutions and changes.
In search of an improvement, the non-government organization CEBSE (Centro para la Conservación y Ecodesarrollo de la Bahía de Samaná y su Entorno) (“Center for the Conservation and Eco-development in the Bay of Samaná and its Surroundings”) promotes strategies for the sustainable development of tourism (Plan de Manejo Integrado para la region de Samaná, 1996) (“Plan of Integrated Management for the region of Samaná”, 1996). This plan implies the involvement of the local community groups and opportunities of income for them by means of regulated eco-tourist practices.
Around the cascade, approximately 1,500 people live in the rural localities of Rancho Español, Arroyo Surdido, Loma de la Cruz y El Café. Ten percent of the population works directly in tourism, and many families obtain indirect benefits. In tourism, which began to introduce itself about 15 years ago, many see an economic alternative, more attractive than agriculture.
Nevertheless, problems, unexpected by the communities, arose. This new form of work distorted the social customs, and individualism and lack of fellowship arose, which are not very usual in the rural population. Competitions and conflicts of opposite interests increased, and the quality of the tourist services diminished.
CEBSE tried to generate a base of confidence among the community groups. Activities began to improve the situation together, like, for example, the rehabilitation and the improvement of the footpaths. Little by little, people began to organize themselves and to act in a collective way to improve their services, and mainly to defend their interests before agents like the tourist operators. In workshops, they formulated their expectations, and the strengths and the weaknesses were analyzed. Important subjects of the discussion were the community organization, tourism in general, the protected areas and eco-tourism, the improvement of the tourist services, social problems, other additional economic activities to eco-tourism, and the tourist capacity of the region.
As a result, the Asociación Comunitaria de Ecoturismo del Salto del Limón (ACESAL) (“Eco-Tourism Community Association of Salto del Limón”) arose. Another decisive step was the participation of public organizations in the certification workshops, which contributed “to break the ice”. An important role was also played by the continuous self-evaluations of the activities.
Results and learned lessons.
In order to regulate the tourist activity, ACESAL, CEBSE, and SECTUR (Secretaría de Estado de Turismo) (“State Secretariat of Tourism”) discussed and elaborated in a participative way a plan of norms of use and control for the area. This process was historical, because it was the first time that this governmental instance made norms with previous consultation and approval of the communities. Another result was the formation of a community association integrated by 200 members from 5 communities to make joint activities for the improvement and the sustainable management of the eco-tourist activities. There was also a significant improvement in the infrastructure and the tourist offering, and a greater recognition of the importance of the conservation of the natural resources. Voluntary actions are organized to improve the quality of the place like, for example, cleaning or reforestation initiatives.
Although the Board of Directors and the sub-commissions of ACESAL meet periodically and conduct positive debates, weaknesses in the decision making process, assuming shared responsibilities, and the operation of the same association exist. Nevertheless, ACESAL has begun to take its first steps.
At the moment, there are 12 micro-companies that offer tours with an on-foot or on-a-horse tour guide towards the cascade or the beaches and the caves of the region, as well as typical food, and there are sales of local crafts, organic cacao or coffee. In the tourist activity almost 200 people work directly. Salto del Limón received approximately 20,000 visitors in 1998. The increasing number of visitors raises the expectations put in tourism, but they also increase the disappointments.
The authoress is consultant at Centro para la Conservación y Ecodesarrollo de la Bahía de Samaná y su Entorno (CEBSE) and contributor to the DED (Deutscher Entwicklungsdienst / Servicio Alemán de Cooperación Social-Técnica / German Service of Social and Technical Cooperation)
FREDDY MIRANDA
Compiled and traduced by Orlando Alcántara
Wednesday, July 25, 2007
How to Buy a real property in Dominican Republic
Throughout our career of more than 15 years as a Law professional and more than 10 years as a professional specialized in real estate and foreign investment, I have reached the following conclusions: a) the most important factor for an investor is to work with a professional who has deep knowledge of expertise in these areas; b) not only the expert professional should know the language of the investor; this is important, but without having still a great knowledge of the investor’s language, the expert dedicated to investing in real estate must know the customs and the habits that are held in the country where the foreign investor makes his/her investment; c) it doesn’t exist nor it shouldn’t exist such a thing as free legal advice; rather our firm focuses itself in providing free guidance, or a guide or a map in order to be able to invest with the lesser possible risk.
Our clients have taught to us. We have only put the ears in their complaints, needs and wants, regarding that the best way to serve their interests is generating alternatives so that they by themselves can choose that option who they consider correct and that fills their expectations. In other words, to know and to act.
The following lines summarize what in our opinion really represents the greatest interests of the investors at world-wide level, and at the end the aspects in which we give advice to focus at the time of taking into account how to make a foreign investment.
Firstly, it is evident that when leaving a country, where we know the laws, it is very important to eliminate all type of uncertainty regarding the political and social stability of the destiny country of our investment. Secondly, we must know that when we make a change in our destiny of investment, placing our money in another country, it is the rules of this new destiny the ones that reign and, therefore, we must allow an efficient professional expert to take us by the hand; an expert professional who knows the economic, social, political and cultural environments of the country where we are going to make the investment.
It is necessary to look for the alternative that is less expensive in the short term, but that does not put at risk the investment in the long term. That is to say, if we must incorporate a company, it is better that this company belongs to a reliable jurisdiction, and it should have a low budget. You must ask your lawyer on the necessity of registration of this company in the country that it is the object of the investment; in this case, the Dominican Republic.
This takes us to the following topic. A comparison among the different types of incorporation or constitution of companies for foreign investors. That is to ask: isn’t a foreign investor better protected by the local laws? Isn’t it better, then, that the company or society that is going to protect his/her investment belongs to the destiny country of the investment? Can I incorporate a company that it doesn’t belong to the Dominican Republic to buy a property?
Another question would be: Do I have to incorporate a company? The answer is yes. It is not mandatory, but after giving legal services to many clients in this area we are convinced that the less risky way to protect a purchase is through a society or company.
In the last years, the Dominican companies have increased a lot in their costs of incorporation. In addition, the tax laws have modified a lot the kinds of maintaining or keeping up to date the companies with the Dirección General de Impuestos Internos (DGII) (IRS in the United States of America). Consequently, the incorporation of a Dominican company can be a trap due to the high cost that it can have at the moment of its constitution. It is possible to be said that with a small capital for incorporating the company, for example, 100.000,00 pesos of capital versus the value of the investment, the company can be economical for the investor. Nevertheless, the trap is in the monthly maintenance of the companies, and in the fact that it could be considered as tax evasion over the social capital or the difference between the investment and the company’s capital. Consult with your lawyer on this matter.
For us, the best options regarding to foreign investment are found in the jurisdictions called “tax havens”. The jurisdictions that we recommend are, of course, BVI, Panama, Anguila and lately Belize. These companies are of fast constitution, they do not require of so many shareholders as in the Dominican companies, and through them there is greater control of the investment. By control, we are talking about handling with ease the company through a Board of Directors that allows to name up to a single Director of the company.
There is a necessary comparison among the structures of U. S. companies of reduced risk to special capital LLC and Dominican companies or foreign companies of jurisdictions called “tax havens”. This comparison raises an important point, and it is the objective or destiny of the investment. In general, we like to think that an entrepreneur or investor has greater yield if he/she tries to maintain his/her investment as a foreign investment in the Dominican Republic in order to avoid the risk that implies double taxation. In effect, when companies of American origin are constituted, it is essential to declare them in the United States and then to register them here; so the company will have to pay taxes both in the United States and in this country, the Dominican Republic.
As a general rule, we would say that -for investors with money originating by a trust or another type of investment structure that forces them to be transparent in all its operations immediately- it is better for them to constitute their companies in their country of origin; in this case, we have used the United States as an example. For those who pursue a greater benefit, we understand that the advisable thing is the constitution of national companies or special jurisdictions, such as Belize, Anguila, BVI or Panama.
Numerous aspects must be considered by the foreign investors concentrated in the area of tourism real estate. We summarize the most important as follows: a) the transaction contract that has to be reviewed by a lawyer; b) “due diligence” or previous investigation on the taxes that could affect the tax property, and on the possible charges or mortgages that the building has; c) if it does not exist a title certificate, it is necessary to investigate the state of the segregation of the land or delimitations to protect the investment; d) flat cadastral or “survey”; e) construction permissions that could affect the development; f) possession of the building; and h) employees in the case of properties already developed and that require maintenance.
In the still much more specialized segment of preconstruction, the investor must look for a professional who helps to solve or to answer basic investment questions such as: a) who is the developer and what is his/her reputation in the market?; b) what type of protection offers the Dominican laws for the constructions (protection against hidden vices or defects in the construction)?; c) which options do I have as an investor when I rent my property?; d) what type of taxes do I have to pay in the form of rents?; e) which are the benefits to give my property in administration? ; f) how can I obtain financing for my property in the Dominican Republic?; and f) which are the maintenance costs?
A last aspect to consider in the investment is the risk and the suitable type of investment that are more to our interests as investors in the Dominican Republic. On this point, we refer to the classic ideas of investment in real estate in general that they suggest drawing up to the plans and goals of investment starting off from the following parameters: a) financial resources. As a general rule, while more resources or liquidity are controlled, the possibilities of investing in rent properties are greater in the first place, and then in apartments or lots located in strategic sites; b) if our objective is on the contrary to involve us little in the handling of the companies, then it is always suggested -taking the factor of liquidity in account- the investment in land or lot and in apartments or houses is recommended after that one. In apartments, if they do not require of much maintenance, and in houses depending, as always, of the location of them; c) finally, for those investors looking for greater risks by all means and more long term yield, the first option always will be the land investment located in areas of growth like the lands of Bávaro and Cabarete. Our readers can get more information on this subject in the extraordinary book written by William Benke and Joseph M. Fowler entitled “All About Real Estate Investing”.
Our clients have taught to us. We have only put the ears in their complaints, needs and wants, regarding that the best way to serve their interests is generating alternatives so that they by themselves can choose that option who they consider correct and that fills their expectations. In other words, to know and to act.
The following lines summarize what in our opinion really represents the greatest interests of the investors at world-wide level, and at the end the aspects in which we give advice to focus at the time of taking into account how to make a foreign investment.
Firstly, it is evident that when leaving a country, where we know the laws, it is very important to eliminate all type of uncertainty regarding the political and social stability of the destiny country of our investment. Secondly, we must know that when we make a change in our destiny of investment, placing our money in another country, it is the rules of this new destiny the ones that reign and, therefore, we must allow an efficient professional expert to take us by the hand; an expert professional who knows the economic, social, political and cultural environments of the country where we are going to make the investment.
It is necessary to look for the alternative that is less expensive in the short term, but that does not put at risk the investment in the long term. That is to say, if we must incorporate a company, it is better that this company belongs to a reliable jurisdiction, and it should have a low budget. You must ask your lawyer on the necessity of registration of this company in the country that it is the object of the investment; in this case, the Dominican Republic.
This takes us to the following topic. A comparison among the different types of incorporation or constitution of companies for foreign investors. That is to ask: isn’t a foreign investor better protected by the local laws? Isn’t it better, then, that the company or society that is going to protect his/her investment belongs to the destiny country of the investment? Can I incorporate a company that it doesn’t belong to the Dominican Republic to buy a property?
Another question would be: Do I have to incorporate a company? The answer is yes. It is not mandatory, but after giving legal services to many clients in this area we are convinced that the less risky way to protect a purchase is through a society or company.
In the last years, the Dominican companies have increased a lot in their costs of incorporation. In addition, the tax laws have modified a lot the kinds of maintaining or keeping up to date the companies with the Dirección General de Impuestos Internos (DGII) (IRS in the United States of America). Consequently, the incorporation of a Dominican company can be a trap due to the high cost that it can have at the moment of its constitution. It is possible to be said that with a small capital for incorporating the company, for example, 100.000,00 pesos of capital versus the value of the investment, the company can be economical for the investor. Nevertheless, the trap is in the monthly maintenance of the companies, and in the fact that it could be considered as tax evasion over the social capital or the difference between the investment and the company’s capital. Consult with your lawyer on this matter.
For us, the best options regarding to foreign investment are found in the jurisdictions called “tax havens”. The jurisdictions that we recommend are, of course, BVI, Panama, Anguila and lately Belize. These companies are of fast constitution, they do not require of so many shareholders as in the Dominican companies, and through them there is greater control of the investment. By control, we are talking about handling with ease the company through a Board of Directors that allows to name up to a single Director of the company.
There is a necessary comparison among the structures of U. S. companies of reduced risk to special capital LLC and Dominican companies or foreign companies of jurisdictions called “tax havens”. This comparison raises an important point, and it is the objective or destiny of the investment. In general, we like to think that an entrepreneur or investor has greater yield if he/she tries to maintain his/her investment as a foreign investment in the Dominican Republic in order to avoid the risk that implies double taxation. In effect, when companies of American origin are constituted, it is essential to declare them in the United States and then to register them here; so the company will have to pay taxes both in the United States and in this country, the Dominican Republic.
As a general rule, we would say that -for investors with money originating by a trust or another type of investment structure that forces them to be transparent in all its operations immediately- it is better for them to constitute their companies in their country of origin; in this case, we have used the United States as an example. For those who pursue a greater benefit, we understand that the advisable thing is the constitution of national companies or special jurisdictions, such as Belize, Anguila, BVI or Panama.
Numerous aspects must be considered by the foreign investors concentrated in the area of tourism real estate. We summarize the most important as follows: a) the transaction contract that has to be reviewed by a lawyer; b) “due diligence” or previous investigation on the taxes that could affect the tax property, and on the possible charges or mortgages that the building has; c) if it does not exist a title certificate, it is necessary to investigate the state of the segregation of the land or delimitations to protect the investment; d) flat cadastral or “survey”; e) construction permissions that could affect the development; f) possession of the building; and h) employees in the case of properties already developed and that require maintenance.
In the still much more specialized segment of preconstruction, the investor must look for a professional who helps to solve or to answer basic investment questions such as: a) who is the developer and what is his/her reputation in the market?; b) what type of protection offers the Dominican laws for the constructions (protection against hidden vices or defects in the construction)?; c) which options do I have as an investor when I rent my property?; d) what type of taxes do I have to pay in the form of rents?; e) which are the benefits to give my property in administration? ; f) how can I obtain financing for my property in the Dominican Republic?; and f) which are the maintenance costs?
A last aspect to consider in the investment is the risk and the suitable type of investment that are more to our interests as investors in the Dominican Republic. On this point, we refer to the classic ideas of investment in real estate in general that they suggest drawing up to the plans and goals of investment starting off from the following parameters: a) financial resources. As a general rule, while more resources or liquidity are controlled, the possibilities of investing in rent properties are greater in the first place, and then in apartments or lots located in strategic sites; b) if our objective is on the contrary to involve us little in the handling of the companies, then it is always suggested -taking the factor of liquidity in account- the investment in land or lot and in apartments or houses is recommended after that one. In apartments, if they do not require of much maintenance, and in houses depending, as always, of the location of them; c) finally, for those investors looking for greater risks by all means and more long term yield, the first option always will be the land investment located in areas of growth like the lands of Bávaro and Cabarete. Our readers can get more information on this subject in the extraordinary book written by William Benke and Joseph M. Fowler entitled “All About Real Estate Investing”.
THE PIÑEIRO GROUP INVESTS 50 MILLIONS
Source: Europe Press.
Web page:
http://www.lukor.com/not-neg/empresas/0601/23171220.htm
Economy/Companies. - The Piñero group invests 50 millions in four luxury resorts in the Dominican Republic.
MADRID, 23 (EUROPA PRESS)
The hotel chain Bahía Príncipe, who belongs to the Piñero group, will invest 60 million dollars (about 50 million euros) in the acquisition and remodeling of four resorts with more than 900 rooms, so that the company will add seven establishments in the country and will have a total of 3,600 rooms, informed today Antonio González, the person in charge of Marketing of the hotel firm Bahía Príncipe.
In the presentation of the promotion that the Dominican Republic will make in the Feria Internacional de Turismo (International Tourism Fair) in Madrid (Fitur) 2006, González indicated that these hotel acquisitions, whose inauguration is predicted for the season 2006-2007, respond to the bet of the group in the Latin American country, that, in his opinion, has a tourist potential with the opening in the next month of November of the new airport in the zone of Samaná.
In particular, the chain has destined the investment, on the one hand, in the acquisition of three establishments of five stars located between the Bahía de Samaná (Bay of Samaná) and the Bahía Escocesa (Scottish Bay) and, on the other hand, in the purchase of a hotel, that was in phase of construction in Cayo Levantado (Raised Key), as well as in the operation during 50 years of the island where it is located. This last establishment will have a category of five stars Great Luxury.
In this sense, González indicated that the objective of the company is to turn the resort of Cayo Levantado, that has a colonial design and style, in a “referring tourist spot”, and added that the four establishments will have a regime of an “all-included” package. In particular, the hotel Gran Bahía Príncipe Cayo Levantado will have a capacity of 191 rooms, among which it will have junior superior suites distributed in 12 villas of 8 rooms, suites, rooms “Villas Playas” (“Villas Beaches”), and standard rooms. Also, it will have 4 restaurants, other 4 bars, 2 tennis courts, 1 paddle court, and heliport.
On the other hand, the Gran Bahía Príncipe Cayacoa will offer 223 rooms, among which there will be junior suites and suites with views to the sea and standard rooms, whereas the establishment Gran Bahía Príncipe Samaná will have 103 rooms. Also, the Piñero group will have the Gran Bahía Príncipe El Portillo.
EAGERNESS TO INCREASE ITS PRESENCE IN THE DOMINICAN REPUBLIC.
These new openings are added to the three hotels that the company already has in the Dominican Republic, two of them, with a category of five stars, are located in Punta Cana -Gran Bahía Príncipe Punta Cana and Gran Bahía Príncipe Bávaro- and the other in Playa Grande –Gran Bahía Príncipe San Juan.
In this sense, González affirmed that the hotel chain is going to continue extending its presence in the Dominican island in the next years with the acquisition of new establishments and the construction of resorts. In particular, he asserted that the company hopes to open at the end of 2007 a hotel in the Bayahíbe zone (Southeast of the country).
Bahía Príncipe has three establishments in Mexico, although it hopes to initiate another hotel project with golf course in that country and to inaugurate another resort in Jamaica the next month of November. Also, it has two other hotels in Tenerife –Bahía Príncipe Costa Adeje and Bahía Príncipe Tenerife-. The Piñero group besides having the hotel chain Bahía Príncipe, has the hotel firm Piñero Hotels, with establishments of three stars, and the tour-operator Soltour.
Web page:
http://www.lukor.com/not-neg/empresas/0601/23171220.htm
Economy/Companies. - The Piñero group invests 50 millions in four luxury resorts in the Dominican Republic.
MADRID, 23 (EUROPA PRESS)
The hotel chain Bahía Príncipe, who belongs to the Piñero group, will invest 60 million dollars (about 50 million euros) in the acquisition and remodeling of four resorts with more than 900 rooms, so that the company will add seven establishments in the country and will have a total of 3,600 rooms, informed today Antonio González, the person in charge of Marketing of the hotel firm Bahía Príncipe.
In the presentation of the promotion that the Dominican Republic will make in the Feria Internacional de Turismo (International Tourism Fair) in Madrid (Fitur) 2006, González indicated that these hotel acquisitions, whose inauguration is predicted for the season 2006-2007, respond to the bet of the group in the Latin American country, that, in his opinion, has a tourist potential with the opening in the next month of November of the new airport in the zone of Samaná.
In particular, the chain has destined the investment, on the one hand, in the acquisition of three establishments of five stars located between the Bahía de Samaná (Bay of Samaná) and the Bahía Escocesa (Scottish Bay) and, on the other hand, in the purchase of a hotel, that was in phase of construction in Cayo Levantado (Raised Key), as well as in the operation during 50 years of the island where it is located. This last establishment will have a category of five stars Great Luxury.
In this sense, González indicated that the objective of the company is to turn the resort of Cayo Levantado, that has a colonial design and style, in a “referring tourist spot”, and added that the four establishments will have a regime of an “all-included” package. In particular, the hotel Gran Bahía Príncipe Cayo Levantado will have a capacity of 191 rooms, among which it will have junior superior suites distributed in 12 villas of 8 rooms, suites, rooms “Villas Playas” (“Villas Beaches”), and standard rooms. Also, it will have 4 restaurants, other 4 bars, 2 tennis courts, 1 paddle court, and heliport.
On the other hand, the Gran Bahía Príncipe Cayacoa will offer 223 rooms, among which there will be junior suites and suites with views to the sea and standard rooms, whereas the establishment Gran Bahía Príncipe Samaná will have 103 rooms. Also, the Piñero group will have the Gran Bahía Príncipe El Portillo.
EAGERNESS TO INCREASE ITS PRESENCE IN THE DOMINICAN REPUBLIC.
These new openings are added to the three hotels that the company already has in the Dominican Republic, two of them, with a category of five stars, are located in Punta Cana -Gran Bahía Príncipe Punta Cana and Gran Bahía Príncipe Bávaro- and the other in Playa Grande –Gran Bahía Príncipe San Juan.
In this sense, González affirmed that the hotel chain is going to continue extending its presence in the Dominican island in the next years with the acquisition of new establishments and the construction of resorts. In particular, he asserted that the company hopes to open at the end of 2007 a hotel in the Bayahíbe zone (Southeast of the country).
Bahía Príncipe has three establishments in Mexico, although it hopes to initiate another hotel project with golf course in that country and to inaugurate another resort in Jamaica the next month of November. Also, it has two other hotels in Tenerife –Bahía Príncipe Costa Adeje and Bahía Príncipe Tenerife-. The Piñero group besides having the hotel chain Bahía Príncipe, has the hotel firm Piñero Hotels, with establishments of three stars, and the tour-operator Soltour.
LA NORMA GENERAL NUMERO 07-2007 SOBRE LA EXENCION PARA LAS EMPRESAS DE CONSTRUCCION DE PROYECTOS
En fecha 26 de Junio del año dos mil siete (2007) la Dirección General de Impuestos Internos dictó la norma 07-2007 conocida como
NORMA PARA ESTABLECER LA FORMA DE APLICACIÓN DE LA EXENCION A LOS ACTIVOS DEL ISR Y EL ITBIS PARA EL SECTOR CONSTRUCCION Y DEL USO DE COMPROBANTES FISCALES QEU DEBEN SUSTENTAR SUS OPERACIONES.
En su artículo primero esta norma establece que para ser beneficiarias de la exención fiscal establecida en el Código Tributario sobre el impuesto a los activos las sociedades DEDICADAS a la construcción de obras importantes deberán someter a la Dirección General de impuestos Internos el estimado de los costos del proyecto y el plazo para la ejecución.
En otras palabras para que la empresa pueda calificar como exenta del impuesto de los activos tienen que estar registradas como tal en la DGII. De conformidad con dicha norma las empresas constructoras de obras estatales tales como carreteras, puentes, presas, caminos vecinales o edificaciones o similares, tienen derecho a la exención siempre y cuando la registren como avance al final del ejercicio. No obstante para recibir este beneficio se hace necesario el registro en la DGII del contrato con el Estado Dominicano.
El plazo para calificar una obra como exenta de impuesto sobre los activos es de 120 días. Estos comenzarán a correr para los nuevos proyectos al momento de inicio de las obras y para los que ya están en ejecución en el mismo plazo. Cuándo es el momento de inicio de la obra? Para la DGII el inicio de la obra (parrafo III) es el momento de la primera erogación de fondos. Es decir desde que el proyecto tenga los fondos para trabajar la obra.
Si los constructores decidiesen prorrogar el plazo del inicio de obra deberán informarlo a la DGII oportunamente. No se define en la norma cuál es el plazo de oportunidad pero se entiende que lo que busca la administración de impuestos es que las obras no se paralicen con la finalidad de acogerse a la exención. Es por este motivo que el párrafo V de dicha norma establece que de todas formas es necesario que las empresas se inscriban en la DGII para calificar como constructoras exentas del impuesto sobre los activos cumpliendo con las disposiciones del Título V del Código Tributario.
Cuando una empresa de venta de inmuebles o dedicada a la construcción tenga varios proyectos en ejecución cada proyecto debe de mantener sus registros individualizados, aunque para fines del Impuesto sobre la renta estos proyectos se presenten como obras consolidadas con el formulario IR-2.
Loa pagos que hagan dichas empresas a los subcontratistas estarán sujetos a una retención de un 2%. Los arquitectos, ingenieros, agrimensores y otros de profesiones similares "facturen consignando únicamente el valor del servicio profesional prestado, la retención del ISR será del 10% del valor facturado. En adición las empresas estarán obligadas a retener a su vez un 2% con carácter de retención a los trabajadores bajo la dependencia de los subcontratistas es decir de los trabajadores que documentados o indocumentados estén bajo la dependencia de dichos subcontratistas. Esta retención del 2% bruto se considerará pago definitivo.Estos pagos no requerirán de comprobante fiscal. En consecuencia podrían beneficiar a las empresas constructoras por la facilidad de reportar dichos pagos al final del ejercicio fiscal, sólamente consignando los datos de los beneficiarios tales como nombres cédulas, fecha, etc.Como indicamos anteriormente estos pagos no requerirán de comprobante fiscal, pero para la DGII existe una obligación general de prudencia que tienen las empresas constructoras en el sentido de que estos pagos tendrán que ser razonables y guardar relación con los parámetros aceptados para este tipo de gastos.Los maestros constructores, ajusteros, y obreros no estarán sujetos a la retención del Impuesto a la Transferencia de Bienes y Servicios (ITBIS); sin embargo el ITBIS será retenido por las empresas constructoras de la siguiente forma: a) persona jurídica ITBIS más retención del 2% de impuesto sobre la renta como pago definitivo; y b) si se trata de persona física 30%, repetimos que esta retención la efectua en la fuenta la empresa que realiza el pago.El artículo 4 de la norma establece que "Cuando un contratista o subcontratista, sean estas personas físicas o jurídicas, realicen trabajos de construcción y dichos trabajos inlcluyan materiales, equipos o piezas de la construcción, la facturación del 16% del ITBIS se aplicará sobre el 10% del monto de los trabajos facturados. El ITBIS facturado de esta manera, estará sujeto a la retención del 100% si quien factura es una persona física y de 30% si quien factura es una persona jurídica.Las obras contratadas como CONTRATO DE ADMINISTRACIÓN se calcularán sobre el porcentaje a percibir por el subcontratista como pago de su obra.El promotor o dueño de la obra podría para documentar el costo de la obra aportar como evidencia de dicho costo los comprobantes fiscales que sirvan de sustento a la compra de materiales de construcción por parte de las personas físicas o jurídicas que trabajen bajo la modalidad de contrato de administración.En el párrafo III de la norma en lo relacionado con el ITBIS se expresa que: " Las disposiciones de la presente norma sobre el ITBIS, no incluye los demás pagos que los constructores hagan a favor de técnicos, profesionales liberales y otras personas físicas cuya labor haya sido prestada sin estar bajo relación de dependencia de la empresa constructora que realiza el pago, los cuales estarán sujetos a las disposiciones establecidas en el Código Tributario y sus reglamentos. En el caso de que estos profesionales no estén registrados como contribuyentes, la emprsa constructora podrá hacer uso del comprobante fiscal proveedor informal para sustentar estos pagos.Los pagos que se realicen fuera del contenido de la norma y que las empresas contratistas deseen deducir como gastos tendrán que ser avalados por comprobantes fiscales válidos.Las empresas dedicadas a la venta de inmuebles tendrán que registrar sus ventas como ingreso cuando las transferencias sean efectivamente realizadas o cuando el bien se entregue al propietario. Los recibos emitidos o el contrato tendrán que tener el número de comprobante fiscal para que sea considerado por la DGII.La norma deroga expresamente la norma 04-07 del 30de marzo del 2007 y la norma general del 11-01 del 26 de diciembre del 2001.
Freddy Miranda Severino, Esq.Real estate lawyer. http://www.freddymiranda.com/
TITULO V. EL REGISTRO EN LA JURISDICCIÓN INMOBILIARIA
CAPITULO IEL REGISTRO
En lo concerniente al registro se destaca en primer término el tipo de documentos que esta nueva ley considera registrables.Los dos primeros párrafos del artículo 89 parecen hechos en consonancia con la teoría clásica de los derechos inmobiliarios.En los párrafos primero y segundo encontramos las formas llamadas derivativas de adquisición de derechos inmobiliarios y además las que involucran los derechos accesorios. El párrafo primero ratifica el principio de que los derechos registrales son constitutivos, es decir que la condición de propietario se asume y surte efectos jurídicos a partir del registro. Este principio aparece confirmado en el artículo 90.El párrafo III es muy especial y está dedicado a las restricciones a la libertad de adquirir, haciendo mención de las servidumbres y a las declaraciones de patrimonio cultural. Este mismo párrafo, sin embargo establece que puede haber otras inscripciones que limiten la libertad del adquiriente. Esto es inusual en la teoría y en la práctica toda vez que en materia de actos jurídicos se entiende que los particulares no pueden establecer por convención limitaciones a la libertad de adquirir que pudiesen redundar en perjuicio de terceros. En la esfera publica si porque se admiten las leyes que alteran o limitan la libertad de acción sobre el derecho de propiedad como inembargabilidad o servidumbres.De todos modos debe interpretarse este articulo de forma enunciativa y no limitativa y admitirse que los particulares puedan establecer limitaciones “particulares sobre los inmuebles”.En el artículo 90 encontramos consagrado el principio de que el derecho de registro se genera con la inscripción y es convalidante de este derecho. No existen en este régimen hipotecas ocultas.
El peligro de este artículo es que establece una presunción absoluta contra la inscripción. Esto es no admite prueba en contrario. Lo que el registro consigna se presume exacto. Una disposición arbitraria que limita la corrección de simples errores materiales por vía administrativa como en principio era admitido por la vieja ley. En el presente caso se admite la prueba en contrario pero por la vía de recurso por causa de error o por fraude.En el artículo 92 se consigna la nueva forma del duplicado del certificado de titulo. Una copia fiel dice este artículo, no una constancia anotada un verdadero duplicado.¿Y que decir de los copropietarios, aparecen todos en un mismo certificado? El párrafo I de este artículo establece que cada copropietario tendrá derecho a un extracto del certificado original. En otras palabras ellos aparecen en el título original, pero en vez de una copia individual tienen derecho a un extracto, que no parece otra cosa que una constancia del derecho del copropietario.Esta ley ha simplificado un poco la obtención de un nuevo certificado cuando el anterior se ha perdido o destruido. En la actualidad basta con una declaración jurada una publicación y una solicitud al mismo Registro de Títulos quien deberá expedir la copia del duplicado.La constancia de la inscripción de derechos reales accesorios como hipotecas y medidas provisionales se hará mediante una copia del documento y una certificación de que ese derecho está inscrito, artículo 93.Las disposiciones del artículo 94 parte infine que establece la posibilidad de prueba en contrario de las certificaciones sobre las inscripciones de gravamen, parecen contradictorias con lo establecido por el artículo 90 sobre los efectos del registro. Parecería que el artìculo 90 se consagra para el certificado de tìtulo, sin embargo el mismo establece que el registro de cargas o gravámenes no sòlo del certificado de tìtulo.No obstante el mismo artìculo 94 parece hacer la diferencia entre ambas nociones de registros. El artìculo 94 se refiere a las certificaciones de registros. Estas admiten la prueba en contratio, pero las anotaciones que las atestan no. Asì una certificación es vàlida en un tribunal como medio de prueba hasta prueba en contrario, mientras que la anotación de esta certificación se presume exacta. ¿Qué debemos entender? Que lo que puede hacerse es mostrar que el registro y la certificación difieren y con esto se hace prueba contra la certificación, ya que el artìculo dice “excepto cuando se demuestre que son contrarias a la realidad del Registro.” O sea que difieren. No obstante el registro parece tener la misma fuerza probante, tendría que ser desonocido por un tribunal, aunque el artìculo 90 parece admitirlo sòlo por causa de fraude o por error material.Cuando el derecho de propiedad ha sido objeto de registro, los nuevos actos a inscribir quedan en lo que respecta especialmente a sus formas a juicio y calificación del Registrador de Títulos. Esta facultad no es privativa del Registrador sino que la ley señala que deberà estar establecida por la vìa reglamentaria.Cuando el acto a registrar provenga de una decisión de la Jurisdicción Inmobiliaria el Registrador sòlo puede calificar la forma de la inscripción, artìculo 96 de la ley.Todas las anotaciones deben de ser promovidas por las partes interesadas salvo las que sean autorizadas por los òrganos de la Jurisdicción Inmobiliarias. Las anotaciones que sean resultado de modificaciones a los derechos registrados o fruto del saneamiento deberán estar acompañadas de un plano aprobado por la Dirección de Mensuras y Catastro.Esto està regulado por el artìculo 97 de la ley la cual en su párrafo II establece la posibilidad de que luego de realizado un diagnòstico los propietarios pueden ser objetos de una actualizaciòn de sus planos.Esta disposición es confusa porque la ley no puede tener efectos retroactivos. Puede alegarse que lo que ese busca es la exactitud de los derechos registrados, pero que decir de un propietario con derechos reconocidos por màs de 20 años? El derecho de propiedad es reconocido como perpetuo. Un propietario que no ha actualizado para usar el tèrmino de la ley su plano, puede por eso ser objeto de una actualizaciòn de su plano? Esta es una solución dudosa.En ese mismo artìculo se regula el registro de derechos en caso de expropiación por el Estado Dominicano. No hay necesidad de oponerse a la expropiación en apariencia, porque los registradores no inscribirán la misma hasta tanto no se les de constancia de que los derechos de la parte expropiada han sido satisfechos.Esta ley contempla un bloqueo registral. Mediante el sistema de venta condicional de inmuebles. En el registro complementario al certificado se inscribe esta venta y desde ese momento no se puede ya registrar ningún acto de disposición sobre el inmueble a ser afectado. En ese mismo registro se inscriben otras limitaciones a la transferencia como son las declaraciones de bien de familia.
En el artìculo 99 nos encontramos con una disposición aunque no colide con el artìculo 90 respecto de la exactitud de los registros inmobiliarios al menos darà muchos problemas prácticos. Se establece que los errores puramente materiales puedan ser corregidos por los Registradores. Esto existìa en el antiguo sistema y por los fraudes y distorsiones los propietarios terminaron requiriendo por resolución hasta modificaciones a las cèdulas y errores de nombres. Suponemos que todo esto tendrá que ser ampliado por vìa reglamentaria.
CAPITULO IICONDOMINIOS
El artículo 100 está consagrado a la definición de lo que es un condominio. Dentro de los elementos de la definición encontramos el de independencia funcional y salida directa o indirecta a la vìa pública de las unidades.
El terreno se mantiene como comùn y proindiviso entre los condomines. Los sectores o àreas comunes son insperables y no estàn sujetas a venta o disposición.Para fines de financiamiento està permitido a las entidades financieras inscribir la intención del propietario de convertir en régimen comùn el inmueble.Està prohibido constituir condominios sobre inmuebles o unidades ya incorporadas al régimen de condominios ni sobre los que pudiesen estar amparados en cartas constancias.
La propiedad de diferentes unidades construidas en terrenos registrados tendrán que ser constituidas en condominio si estàn divididas por pisos de lo contrario pertenecerán a un solo propietario.
El consorcio de propietarios tendrà derecho a un Certificado de Titulo y a un bloqueo registral para que no puedan ser inscritos nuevos gravámenes sobre la parte comùn.
Las cuotas vencidas y no pagadas de los gastos comunes gozan de un privilegio y una vez liquidadas gozan de toda la fuerza de un titulo ejecutorio.
La competencia para todos los conflictos que surjan en esta materia será competencia del tribunal de Jurisdicción Original relacionadas con: a) derechos; b) cargas y gravámenes registrados.
CAPITULO III PUBLICIDAD REGISTRAL
Nos encontramos que aunque las informaciones de los registros son públicas la obtención de certificaciones es privativa de los propietarios.Los propietarios pueden sin embargo provocar un bloqueo para realizar transacciones inmobiliarias mediante la obtención de una certificación con reserva de prioridad. Un sistema novedoso sobre todo para ciertas promesas de venta. Decimos que sólo algunas porque el bloqueo sólo puede ser hecho por 15 días aunque no parece que el artículo restringa la renovación de la misma.
Aunque la certificación con reserva produce un bloqueo para fines de traspaso de la propiedad, la ley permite la inscripción de cargas y gravámenes provisionales, que se convierten en definitivas al final del plazo.
Entiendo que el sistema aunque novedoso parece admitir que se burle la protección de los acreedores, toda vez que si la operación cuyo objeto es el bloqueo se materializa las inscripciones provisionales son objeto de una especie de purga.
CAPITULO IV INMUEBLES DEL DOMINIO PUBLICO
Los artículos 106 y 107 están consagrados a los bienes del dominio público, una noción que no nos merece mayores comentarios, tal vez que la desafectaciòn o la colocación de estos bienes en el comercio debe ser hecha por ley.
TITULO V MODIFICACIONES PARCELARIAS
CAPITULO IOPERACIONES DE MENSURAS CATASTRALES
Las modificaciones parcelarias parecen estar sometidas a un régimen simplicado. Se obliga a someter a mensura todas las propiedades que se vayan a ser objeto de registro de acuerdo a la presente ley.El procedimiento de conformidad con el artìculo 111 es bastante sencillo, una vez hecho el contrato de mensura con el agrimensor la Dirección Regional de Mensura inviste o autoriza al agrimensor y ya està.En la pràctica parece estar comenzando a funcionar el sistema de satélite que permitirà agilizar los procedimientos. Lo que antes tomaba seis o siete meses se podrà hacer en uno o dos.
Si el contrato de mensura genera algún tipo de controversias, el asunto se dirime por la jurisdicción inmobiliaria. Si por el contrario el acto de mensura es impugnado se procede por la vìa administrativa que vamos a explicar:
Los recursos estàn abiertos contra las decisiones administrativas y de los òrganos técnicos y contra las decisiones administrativas de la Jurisdicción Inmobiliaria.El recurso de acuerdo con el artículo 75 está abierto a todo el mundo, todo el que sienta afectado.La primera fase para impugnar un acto administrativo es la reconsideración, que se interpone en un plazo de 15 dìas contados a partir la fecha de publicidad.El fallo debe producirse tambièn en un plazo de 15 dìas después de interpuesto el recurso. Denegada la reconsideración se abre el recurso jerárquico.El plazo para interponer el recurso jerárquico es el mismo, o sea de 15 dìas. Tambièn el plazo para fallarlo es el mismo.Rechazado el recurso jerárquico se abre el recurso jurisdiccional. El tribunal competente es el Superior de Tierras territorialmente competente.El plazo para interponer el recurso y para fallarlo es de 30 dìas.Haremos otro paréntesis para discutir acerca de los recursos contra las decisiones jurisdiccionales. Estos recursos son Apelación, Casación Revisión por error material y revisión por fraude.
La apelación es el recurso abierto contra las decisiones de los tribunales de jurisdicción original. Como sabemos de conformidad con el artìculo 6 de la ley habrà no menos de cinco (59 tribunales Superiores de Tierras, los cuales como todo lo relacionado con esta nueva ley estarà controlado por la Suprema Corte de Justicia la cual los pondrà en funcionamiento de acuerdo CON LAS
NECESIDADES DEL SISTEMA
Volviendo al articulo 80 de la ley el Tribunal Superior de Tierras es el del territorio del tribunal de jurisdicción original que dicto la sentencia.
En el aspecto formal el recurso de interpone en la Secretarìa del Tribunal que dictò la sentencia, mediante escrito motivado. Este recurso debe de ser notificado a la contraparte en un plazo de 10 dìas.
El recurso està abierto contra las partes y los intervinientes, pero si se trata de apelaciòn relacionada con el saneamiento cualquier intersado lo puede interponer.
El plazo del recurso es de 30 dìas, contados a partir de la notificación de la sentencia.
La Casación està abierta contra las decisiones de los Tribunales Superiores de Tierra, y se rige por la ley de Casación, y por los reglamentos que se dicten para complementar la ley.
LA REVISIÓN.
Este recurso està abierto para corregir errores puramente materiales. Como dijimos la ley no define cuales son esos errores y este artìculo podría colidir con los artículos 90 y 99. El primero que determina la exactitud del registro y que sòlo puede ser impugnada por el recurso de revisión. El 99 permite a los Registradores corregir los errores puramente materiales.
Entendemos que la vìa reglamentaria tendrà que determinar la aplicación de ambos artículos, aunque el artìculo 83 se refiere a decisiones de la jurisdicción inmobiliria, pero al dejar abierto el 90 este tipo de recursos contra el registro inmobiliario que afecta a los registradores podría suceder como señalaramos anteriormente con la vieja ley que hasta para los números de cèdula los registradores decidìan no enmendarlos y someterlos al Tribunal Superior.
De todas formas entendemos que debe prevalecer el principio de que el registrador de títulos puede evaluar y decidir lo que es un error puramente material y enmendarlo de forma que la revisión estè abierta contra las decisiones jurisdiccionales y las del registro por supuesta inexactitud del mismo de conformidad con el artìculo 90.
El plazo para este recurso es breve de quince (15) y es competente el órgano que generò la decisión. Hay que fijarse bien que la ley habla como dijimos, de forma indistinta de organo y tribunales. Algo que tambièn tendrà que ser ampliado por los reglamentos.
REVISIÓN POR FRAUDE
Abierto contra fraudes en el saneamiento este proceso està abierto para todo aquel que haya sido privado de su derecho, y se interpone por ante el Tribunal Superior de Tierras competente en un plazo no mayor de un año (1) después de expedido el certificado de tìtulo correspondiente.
No obstante el recurso està abierto desde la publicación de la sentencia pero se extiende hasta un año después de la emisión del PRIMER CERTIFICADO DE TITULO.
El principio de tercero adquiriente de buena sufre una derogación mientras estè abierto el plazo para la revisión por causa de fraude.
Como forma de determinar el inicio del plazo del recurso el párrafo IV de la ley determina que el registrador harà una anotación en el primer tìtulo el plazo de la prescripción. No sabemos cual es la sanción por la omisión. Ahora bien como toda prescripción se presume que comienza en caso de omisión cuando el interesado conoce del certiticado. Esta serìa la mejor solución pero en este artìculo se habla de emisión asì que la parte interesada en caso de que no estè anotado del plazo de prescripción tendría que partir de la fecha de emisión del certificado.
En lo concerniente al registro se destaca en primer término el tipo de documentos que esta nueva ley considera registrables.Los dos primeros párrafos del artículo 89 parecen hechos en consonancia con la teoría clásica de los derechos inmobiliarios.En los párrafos primero y segundo encontramos las formas llamadas derivativas de adquisición de derechos inmobiliarios y además las que involucran los derechos accesorios. El párrafo primero ratifica el principio de que los derechos registrales son constitutivos, es decir que la condición de propietario se asume y surte efectos jurídicos a partir del registro. Este principio aparece confirmado en el artículo 90.El párrafo III es muy especial y está dedicado a las restricciones a la libertad de adquirir, haciendo mención de las servidumbres y a las declaraciones de patrimonio cultural. Este mismo párrafo, sin embargo establece que puede haber otras inscripciones que limiten la libertad del adquiriente. Esto es inusual en la teoría y en la práctica toda vez que en materia de actos jurídicos se entiende que los particulares no pueden establecer por convención limitaciones a la libertad de adquirir que pudiesen redundar en perjuicio de terceros. En la esfera publica si porque se admiten las leyes que alteran o limitan la libertad de acción sobre el derecho de propiedad como inembargabilidad o servidumbres.De todos modos debe interpretarse este articulo de forma enunciativa y no limitativa y admitirse que los particulares puedan establecer limitaciones “particulares sobre los inmuebles”.En el artículo 90 encontramos consagrado el principio de que el derecho de registro se genera con la inscripción y es convalidante de este derecho. No existen en este régimen hipotecas ocultas.
El peligro de este artículo es que establece una presunción absoluta contra la inscripción. Esto es no admite prueba en contrario. Lo que el registro consigna se presume exacto. Una disposición arbitraria que limita la corrección de simples errores materiales por vía administrativa como en principio era admitido por la vieja ley. En el presente caso se admite la prueba en contrario pero por la vía de recurso por causa de error o por fraude.En el artículo 92 se consigna la nueva forma del duplicado del certificado de titulo. Una copia fiel dice este artículo, no una constancia anotada un verdadero duplicado.¿Y que decir de los copropietarios, aparecen todos en un mismo certificado? El párrafo I de este artículo establece que cada copropietario tendrá derecho a un extracto del certificado original. En otras palabras ellos aparecen en el título original, pero en vez de una copia individual tienen derecho a un extracto, que no parece otra cosa que una constancia del derecho del copropietario.Esta ley ha simplificado un poco la obtención de un nuevo certificado cuando el anterior se ha perdido o destruido. En la actualidad basta con una declaración jurada una publicación y una solicitud al mismo Registro de Títulos quien deberá expedir la copia del duplicado.La constancia de la inscripción de derechos reales accesorios como hipotecas y medidas provisionales se hará mediante una copia del documento y una certificación de que ese derecho está inscrito, artículo 93.Las disposiciones del artículo 94 parte infine que establece la posibilidad de prueba en contrario de las certificaciones sobre las inscripciones de gravamen, parecen contradictorias con lo establecido por el artículo 90 sobre los efectos del registro. Parecería que el artìculo 90 se consagra para el certificado de tìtulo, sin embargo el mismo establece que el registro de cargas o gravámenes no sòlo del certificado de tìtulo.No obstante el mismo artìculo 94 parece hacer la diferencia entre ambas nociones de registros. El artìculo 94 se refiere a las certificaciones de registros. Estas admiten la prueba en contratio, pero las anotaciones que las atestan no. Asì una certificación es vàlida en un tribunal como medio de prueba hasta prueba en contrario, mientras que la anotación de esta certificación se presume exacta. ¿Qué debemos entender? Que lo que puede hacerse es mostrar que el registro y la certificación difieren y con esto se hace prueba contra la certificación, ya que el artìculo dice “excepto cuando se demuestre que son contrarias a la realidad del Registro.” O sea que difieren. No obstante el registro parece tener la misma fuerza probante, tendría que ser desonocido por un tribunal, aunque el artìculo 90 parece admitirlo sòlo por causa de fraude o por error material.Cuando el derecho de propiedad ha sido objeto de registro, los nuevos actos a inscribir quedan en lo que respecta especialmente a sus formas a juicio y calificación del Registrador de Títulos. Esta facultad no es privativa del Registrador sino que la ley señala que deberà estar establecida por la vìa reglamentaria.Cuando el acto a registrar provenga de una decisión de la Jurisdicción Inmobiliaria el Registrador sòlo puede calificar la forma de la inscripción, artìculo 96 de la ley.Todas las anotaciones deben de ser promovidas por las partes interesadas salvo las que sean autorizadas por los òrganos de la Jurisdicción Inmobiliarias. Las anotaciones que sean resultado de modificaciones a los derechos registrados o fruto del saneamiento deberán estar acompañadas de un plano aprobado por la Dirección de Mensuras y Catastro.Esto està regulado por el artìculo 97 de la ley la cual en su párrafo II establece la posibilidad de que luego de realizado un diagnòstico los propietarios pueden ser objetos de una actualizaciòn de sus planos.Esta disposición es confusa porque la ley no puede tener efectos retroactivos. Puede alegarse que lo que ese busca es la exactitud de los derechos registrados, pero que decir de un propietario con derechos reconocidos por màs de 20 años? El derecho de propiedad es reconocido como perpetuo. Un propietario que no ha actualizado para usar el tèrmino de la ley su plano, puede por eso ser objeto de una actualizaciòn de su plano? Esta es una solución dudosa.En ese mismo artìculo se regula el registro de derechos en caso de expropiación por el Estado Dominicano. No hay necesidad de oponerse a la expropiación en apariencia, porque los registradores no inscribirán la misma hasta tanto no se les de constancia de que los derechos de la parte expropiada han sido satisfechos.Esta ley contempla un bloqueo registral. Mediante el sistema de venta condicional de inmuebles. En el registro complementario al certificado se inscribe esta venta y desde ese momento no se puede ya registrar ningún acto de disposición sobre el inmueble a ser afectado. En ese mismo registro se inscriben otras limitaciones a la transferencia como son las declaraciones de bien de familia.
En el artìculo 99 nos encontramos con una disposición aunque no colide con el artìculo 90 respecto de la exactitud de los registros inmobiliarios al menos darà muchos problemas prácticos. Se establece que los errores puramente materiales puedan ser corregidos por los Registradores. Esto existìa en el antiguo sistema y por los fraudes y distorsiones los propietarios terminaron requiriendo por resolución hasta modificaciones a las cèdulas y errores de nombres. Suponemos que todo esto tendrá que ser ampliado por vìa reglamentaria.
CAPITULO IICONDOMINIOS
El artículo 100 está consagrado a la definición de lo que es un condominio. Dentro de los elementos de la definición encontramos el de independencia funcional y salida directa o indirecta a la vìa pública de las unidades.
El terreno se mantiene como comùn y proindiviso entre los condomines. Los sectores o àreas comunes son insperables y no estàn sujetas a venta o disposición.Para fines de financiamiento està permitido a las entidades financieras inscribir la intención del propietario de convertir en régimen comùn el inmueble.Està prohibido constituir condominios sobre inmuebles o unidades ya incorporadas al régimen de condominios ni sobre los que pudiesen estar amparados en cartas constancias.
La propiedad de diferentes unidades construidas en terrenos registrados tendrán que ser constituidas en condominio si estàn divididas por pisos de lo contrario pertenecerán a un solo propietario.
El consorcio de propietarios tendrà derecho a un Certificado de Titulo y a un bloqueo registral para que no puedan ser inscritos nuevos gravámenes sobre la parte comùn.
Las cuotas vencidas y no pagadas de los gastos comunes gozan de un privilegio y una vez liquidadas gozan de toda la fuerza de un titulo ejecutorio.
La competencia para todos los conflictos que surjan en esta materia será competencia del tribunal de Jurisdicción Original relacionadas con: a) derechos; b) cargas y gravámenes registrados.
CAPITULO III PUBLICIDAD REGISTRAL
Nos encontramos que aunque las informaciones de los registros son públicas la obtención de certificaciones es privativa de los propietarios.Los propietarios pueden sin embargo provocar un bloqueo para realizar transacciones inmobiliarias mediante la obtención de una certificación con reserva de prioridad. Un sistema novedoso sobre todo para ciertas promesas de venta. Decimos que sólo algunas porque el bloqueo sólo puede ser hecho por 15 días aunque no parece que el artículo restringa la renovación de la misma.
Aunque la certificación con reserva produce un bloqueo para fines de traspaso de la propiedad, la ley permite la inscripción de cargas y gravámenes provisionales, que se convierten en definitivas al final del plazo.
Entiendo que el sistema aunque novedoso parece admitir que se burle la protección de los acreedores, toda vez que si la operación cuyo objeto es el bloqueo se materializa las inscripciones provisionales son objeto de una especie de purga.
CAPITULO IV INMUEBLES DEL DOMINIO PUBLICO
Los artículos 106 y 107 están consagrados a los bienes del dominio público, una noción que no nos merece mayores comentarios, tal vez que la desafectaciòn o la colocación de estos bienes en el comercio debe ser hecha por ley.
TITULO V MODIFICACIONES PARCELARIAS
CAPITULO IOPERACIONES DE MENSURAS CATASTRALES
Las modificaciones parcelarias parecen estar sometidas a un régimen simplicado. Se obliga a someter a mensura todas las propiedades que se vayan a ser objeto de registro de acuerdo a la presente ley.El procedimiento de conformidad con el artìculo 111 es bastante sencillo, una vez hecho el contrato de mensura con el agrimensor la Dirección Regional de Mensura inviste o autoriza al agrimensor y ya està.En la pràctica parece estar comenzando a funcionar el sistema de satélite que permitirà agilizar los procedimientos. Lo que antes tomaba seis o siete meses se podrà hacer en uno o dos.
Si el contrato de mensura genera algún tipo de controversias, el asunto se dirime por la jurisdicción inmobiliaria. Si por el contrario el acto de mensura es impugnado se procede por la vìa administrativa que vamos a explicar:
Los recursos estàn abiertos contra las decisiones administrativas y de los òrganos técnicos y contra las decisiones administrativas de la Jurisdicción Inmobiliaria.El recurso de acuerdo con el artículo 75 está abierto a todo el mundo, todo el que sienta afectado.La primera fase para impugnar un acto administrativo es la reconsideración, que se interpone en un plazo de 15 dìas contados a partir la fecha de publicidad.El fallo debe producirse tambièn en un plazo de 15 dìas después de interpuesto el recurso. Denegada la reconsideración se abre el recurso jerárquico.El plazo para interponer el recurso jerárquico es el mismo, o sea de 15 dìas. Tambièn el plazo para fallarlo es el mismo.Rechazado el recurso jerárquico se abre el recurso jurisdiccional. El tribunal competente es el Superior de Tierras territorialmente competente.El plazo para interponer el recurso y para fallarlo es de 30 dìas.Haremos otro paréntesis para discutir acerca de los recursos contra las decisiones jurisdiccionales. Estos recursos son Apelación, Casación Revisión por error material y revisión por fraude.
La apelación es el recurso abierto contra las decisiones de los tribunales de jurisdicción original. Como sabemos de conformidad con el artìculo 6 de la ley habrà no menos de cinco (59 tribunales Superiores de Tierras, los cuales como todo lo relacionado con esta nueva ley estarà controlado por la Suprema Corte de Justicia la cual los pondrà en funcionamiento de acuerdo CON LAS
NECESIDADES DEL SISTEMA
Volviendo al articulo 80 de la ley el Tribunal Superior de Tierras es el del territorio del tribunal de jurisdicción original que dicto la sentencia.
En el aspecto formal el recurso de interpone en la Secretarìa del Tribunal que dictò la sentencia, mediante escrito motivado. Este recurso debe de ser notificado a la contraparte en un plazo de 10 dìas.
El recurso està abierto contra las partes y los intervinientes, pero si se trata de apelaciòn relacionada con el saneamiento cualquier intersado lo puede interponer.
El plazo del recurso es de 30 dìas, contados a partir de la notificación de la sentencia.
La Casación està abierta contra las decisiones de los Tribunales Superiores de Tierra, y se rige por la ley de Casación, y por los reglamentos que se dicten para complementar la ley.
LA REVISIÓN.
Este recurso està abierto para corregir errores puramente materiales. Como dijimos la ley no define cuales son esos errores y este artìculo podría colidir con los artículos 90 y 99. El primero que determina la exactitud del registro y que sòlo puede ser impugnada por el recurso de revisión. El 99 permite a los Registradores corregir los errores puramente materiales.
Entendemos que la vìa reglamentaria tendrà que determinar la aplicación de ambos artículos, aunque el artìculo 83 se refiere a decisiones de la jurisdicción inmobiliria, pero al dejar abierto el 90 este tipo de recursos contra el registro inmobiliario que afecta a los registradores podría suceder como señalaramos anteriormente con la vieja ley que hasta para los números de cèdula los registradores decidìan no enmendarlos y someterlos al Tribunal Superior.
De todas formas entendemos que debe prevalecer el principio de que el registrador de títulos puede evaluar y decidir lo que es un error puramente material y enmendarlo de forma que la revisión estè abierta contra las decisiones jurisdiccionales y las del registro por supuesta inexactitud del mismo de conformidad con el artìculo 90.
El plazo para este recurso es breve de quince (15) y es competente el órgano que generò la decisión. Hay que fijarse bien que la ley habla como dijimos, de forma indistinta de organo y tribunales. Algo que tambièn tendrà que ser ampliado por los reglamentos.
REVISIÓN POR FRAUDE
Abierto contra fraudes en el saneamiento este proceso està abierto para todo aquel que haya sido privado de su derecho, y se interpone por ante el Tribunal Superior de Tierras competente en un plazo no mayor de un año (1) después de expedido el certificado de tìtulo correspondiente.
No obstante el recurso està abierto desde la publicación de la sentencia pero se extiende hasta un año después de la emisión del PRIMER CERTIFICADO DE TITULO.
El principio de tercero adquiriente de buena sufre una derogación mientras estè abierto el plazo para la revisión por causa de fraude.
Como forma de determinar el inicio del plazo del recurso el párrafo IV de la ley determina que el registrador harà una anotación en el primer tìtulo el plazo de la prescripción. No sabemos cual es la sanción por la omisión. Ahora bien como toda prescripción se presume que comienza en caso de omisión cuando el interesado conoce del certiticado. Esta serìa la mejor solución pero en este artìculo se habla de emisión asì que la parte interesada en caso de que no estè anotado del plazo de prescripción tendría que partir de la fecha de emisión del certificado.
OFFSHORE ASSET PROTECTION
A fresh look at offshore techniques in conjunction with recent developments in law relating to fraudulent transfer in the Isle of Manby Charles A. Cain
For some years, the favoured mechanism of Asset Protection vehicles, that is to say, vehicles for the protection of the assets of US persons from litigious creditors, has been the offshore trust. Indeed, it had almost reached the point where nothing else was ever mentioned, in spite of the fact that there always have been a variety of mechanisms available.
The original reason for this was a tax reason. At that time, and indeed, still today, the objective was to establish a vehicle into which assets could be placed which
To achieve the first objective was comparatively simple - just get the assets out of the USA into a jurisdiction which had no Reciprocal Enforcement of Judgements Agreement1.
The actual holding mechanisms available then had to be selected.
At that time, the Limited Liability Company (LLC) was not available. In addition, the older classification rules of the IRS were still in force, and had not been replaced by the Check-the-Box Regulations, which were introduced in 19972.All offshore Corporate forms were, as a consequence, ruled out because an overseas holding corporation would have been a Controlled Foreign Corporation3. Quite apart from the enhanced reporting requirements implicit in a Controlled Foreign Corporation (CFC) with Sub-Part F income, a Foreign Personal Holding Company (FPHC)4, a Passive Foreign Investment Company (PFIC)5 and the other implications of being caught up in Prof. Harvey Dale’s renowned five armed Pentapuss (now six-armed with the addition of the PFIC), there is a distinct penalty provision in relation to Basis step-up for Capital Gains Tax, derived from the rules in IRC s.1246(e) and 1291(e). The tax consequences of using a CFC for asset protection were therefore prohibitive.The Limited Partnership was another vehicle which was used extensively inside the USA, but in those days, few offshore jurisdictions had them, although they have been in the statute book in the Isle of Man since 1909 (Partnership Act, 1909).Many US Practitioners then looked at Trusts for Asset Protection. They found that there was a rich tradition of Trusts being used for ‘Asset Protection’ in a more general sense - indeed, there is scarcely any other purpose for a Trust.For tax purposes, they were brilliant, since a trust established by a US person which he was also capable of benefiting from was a Grantor Trust6, and therefore entirely transparent for income and capital gains tax purposes. Thus the offshore trust was tax neutral, but was still capable of being structured for basic estate tax planning.
There were, of course, some drawbacks. Firstly, the establishment of a foreign trust, even though a Grantor Trust, led to enhanced reporting. This could, in theory be cured, by making the trust a domestic trust. This could be done by providing as a joint trustee, a US trustee, and by ensuring that the provisions of IRC s. 7701(a)(30) were met. The trustee would resign the moment the heat was turned up, but until that time it could be argued that the trust to argue was a US domestic trust for tax purposes, notwithstanding that the proper law was overseas, as were the assets, and the actual management of those assets.The second drawback was the desirability of having a holding company below the trust. Such a company immediately plunged the structure back into the CFC problem. There were three solutions to these CFC problems. Either the assets were transferred direct into a bank ‘street’ name or nominee company. Or, they were held in a US corporation, which because of the tax attribution back to the Grantor, could be a transparent S-corporation7, or, thirdly, the assets were held in a foreign corporation which, although owned by the Trustee, was arguably a nominee company, relying on the decision in Commissioner v Bollinger 108 S.Ct 1173(1988).None of these was very satisfactory. Not all assets can be held in a “street name”. The use of a US S-corporation immediately brought the ownership of the assets back into the USA, where they could be frozen and/or sequestrated. But the use of a nominee company correctly made it impossible to use the company as a mechanism for the day-to day management of the assets by the client.The problem remained until the advent of the offshore LLC, which, by being classified as a partnership8 instead of a corporation enabled the Tax Transparent trust to have a Tax Transparent LLC beneath it, with the client as Manager of the LLC.
There were also other problems derived from the fundamental character of trust law itself, and from the so-called ‘Statute of Elizabeth’9. The most serious problem of all was perceived to be the issue of fraudulent transfer, and this still remains the biggest problem for a foreign trustee.Under normal English Common Law principles, the principles set out in the so-called Statute of Elizabeth (Fraudulent Conveyances Act 1571 (13 Eliz I Cap 5) are now contained in the UK’s Insolvency Act 1986) have been adopted in one way or another by every country which looks to England for the source of its law (in the USA, the Uniform Fraudulent Transfer Act 1984). This is not, technically, a matter of trust law, but is a matter of bankruptcy law. Where a person effects a transfer to a trust with the intent to defeat any future creditor, the transfer can be set aside and the trust declared void.Virtually every jurisdiction which had adequate equity-based trust law (anything else was and is far too risky in terms of dealing with the unknown) had also absorbed the principles of the Fraudulent Conveyances Act 1571 (13 Eliz I Cap 5).There is one jurisdiction, however, which while being an absolutely traditional Common Law jurisdiction, has never been afflicted by the problems thrown up by the Statute of Elizabeth.In the Isle of Man there was considerable uncertainty concerning fraudulent transfer, and, in consequence, after a promising start in the Asset Protection business, the Isle of Man fell by the wayside. But, in 1999 came the case of Re Heginbotham’s Petition 199910. In that case, it was determined that the Statute of Elizabeth had never been accepted into Manx law. Different Manx legislation applied, and in consequence Asset Protection Trusts or other structures established in the Isle of Man are now safe, provided that, at the time of establishment, the Settlor was solvent, was able to meet all his known and ascertainable creditors, and had no intent to defraud creditors. We shall examine this case in a little more depth later on.Elsewhere, the Asset Protection Trust has been running into problems, largely derived from the equitable character of trust law, and the extreme reluctance of the courts to allow an equitable remedy to be used to deny equity to another party. Notwithstanding aggressive legislation in certain jurisdictions (which has caused some commentators to wonder whether trust law now actually exists in such jurisdictions, have been replaced entirely by bailments14, the courts have shown a determination to uphold basic rules of equity.In consequence, we have the excitements of the Orange Grove11 case in the Cook Islands, the Lawrence case12 and the more recent Anderson case13, where the settlor went to prison for contempt for failing to return the funds to the USA. Effectively, the trusts were treated as bailments.As all this was happening, there were changes to the law too. In August 1996, the USA enacted the Small Business Jobs Protection Act 1996, which, under the wing of a fairly innocuous piece of social security legislation, fundamentally altered the tax rules relating to foreign Grantor Trusts. As far as Asset Protection Trusts are concerned, it abolished the charade of the foreign trust being a ‘US Trust’ for tax purposes, and thereby forced the reporting regime for foreign trusts on all offshore Asset Protection Trusts. It also greatly enhanced that reporting regime, including a requirement on the offshore trustee to provide information, and appoint an agent in the USA for that purpose. This latter has caused real difficulties in situations where there are beneficiaries resident outside, as well as inside the US tax net.Finally, the Check-the-Box Regulations2 that came into force on 1st January 1997, changed the whole classification mechanism for entities, and thus the arguments that had been stitched together in favour of the use of the offshore Asset Protection Trust all came apart.Let us go back to first principles. We need to park assets offshore into an entity which is both transparent for tax purposes, and which provides substantial asset protection capability. We now know that the trust is subject to many difficulties, but these do not afflict the LLC. A properly designed LLC can provide tax transparency, as well as powerful Asset Protection features, which are not vulnerable to shifting sands of trust law.The offshore LLC, though, has its limitations. It cannot be used to do Estate Tax planning in the USA. It cannot cope with complex family inheritance issues. For such matters, a trust is needed. Such a trust, however, does not need to be offshore – it can easily be established in the USA itself, in a suitable state, as a domestic trust. Since the Asset Protection planning is being done in the offshore LLC, the domestic trust need not concern itself with asset protection. Thus, the preferred solution now is a domestic trust in which all the estate tax planning is effected, and, below it, an appropriately designed LLC, in which all the asset protection planning is done.In the Isle of Man, the LLC is a legal entity created under the Limited Liability Companies Act 1996. It is not a Trust. No US court will have jurisdiction. Only the Isle of Man Courts have jurisdiction. An order made by a US court requiring the US Client to instruct the overseas Trustee to instruct the LLC to distribute the assets will not be enforced in the Isle of Man15.There are three members of such an LLC. The US person will have a 99.9% interest, and two offshore members will have (genuinely and beneficially) an 0.01% interest between them (there are no de minimis rules.) All decisions have to be made unanimously.The parties attacking the US Client will first have to demolish the US domestic trust. After that, they will have to take the action to the Isle of Man courts15, and endeavour to obtain a charging order over the US Client’s beneficial Interest. But that will achieve nothing, since they cannot obtain any access to funds in the LLC, while now having a tax liability commensurate with their 99.9% interest16. This means that no transferee can force a distribution. He can only wait until the members unanimously decide to make a distribution. This could be never.Furthermore, in consequence of the decision in Re the Petition of Christopher Jollian Heginbotham 199910, the transfer to the LLC cannot be attacked, even though the trust may have been set aside in the USA. Asset Protection LLCs established in the Isle of Man are now safe in Manx law, provided that, at the time of establishment, the Settlor was solvent, was able to meet all his known and ascertainable creditors, and had no intent to defraud creditors.For many years, there has been considerable uncertainty in the Isle of Man relating to the law of fraudulent transfer. This arose because the Isle of Man, as a jurisdiction is, and always has been separate and distinct from that of England, and thus English law was never ‘received’ in the same way as, for example, it was received into former English colonies, including the USA. The infamous ‘Statute of Elizabeth’, or more properly, the English Fraudulent Conveyances Act 1571 (13 Eliz I Cap 5) was never adopted in the Isle of Man. The earliest legislation on the subject in the Isle of Man is the Fraudulent Assignments Act 1736 of which, today, just one section remains in force. This reads as follows:“(4) And that all fraudulent Assignments or Transffers [sic] of the Debtor’s Goods of Effects shall be void and of no effect against his just Creditors, any Custome or Practice to the contrary notwithstanding.”The only other reference in Manx legislation is to found in the The Bankruptcy Code 1892.Section 30 of that Act reads:“Avoidance of voluntary Settlements(1) Any Settlement of property, not being a settlement made before and in consideration of marriage, or made in favour of a purchaser or encumbrancer in good faith and for valuable consideration, or a settlement made on or for the wife and children of the settlor of property which has accrued to the settlor after marriage in right of his wife, shall, if the settlor becomes bankrupt within two years after the date of settlement, be void against the trustee1, and shall if the settlor becomes bankrupt at any subsequent time within ten years after the date of the settlement, be void against the trustee 17 unless the parties claiming under the settlement can prove that the settlor was at the time of making the settlement able to pay all his debts without the aid of the property comprised in the settlement, and that the interest of the settlor had passed to the trustee of such settlement on the execution thereof.(2) .........(3) ‘Settlement’ shall for the purposes of this section, include any conveyance or transfer of property.”Thus the whole situation relating to future creditors, (i.e. creditors not existing or being ascertainable at the time of the settlement is effected and arising subsequent to such a settlement having been made) was unknown.This is of great significance because the Isle of Man was one of the pioneer jurisdictions for asset protection trusts, but fell by the wayside because of uncertainty on this point. In addition, the Isle of Man turned its face against the type of ‘debtor’ protection legislation as was adopted in many other jurisdictions, to the extent that the Isle of Man does not even feature on a list of jurisdictions favored for asset protection work.However, as a result of the judgement in Re the Petition of Christopher Jollian Heginbotham 199910, the uncertaint has been resolved. The note of the Editor of the International Trust and Estate Law Reports 18 (Philip Baker) states:-“The issue decided by this case had not previously been settled in Isle of Man jurisprudence. The issue is of relevance because the Isle of Man has eschewed specific asset protection legislation. This case now establishes (subject to any contrary decision of a higher court) that a transfer of asset to a trust, for example, cannot be set aside at the instance of creditors whose debts were not known and ascertained at the time of the transfer. Thus so long as the transferor is not in a ‘state of insolvency’ at the time of the transfer - that is, he can pay all his known and ascertained debts, including those falling due on a future date - the transfer cannot be set aside.This case also confirms the general principle that a trust, bona fide established by a person who is not insolvent, is a perfectly good asset protection arrangement. In some instances, the use of a trust in a territory with strong asset protection legislation - such as in the Cook islands - is an indication that the transferor was not bona fide or knew of future debts he wished to avoid. On the outcome of creating an asset protection trust under such a regime, see FTC v Affordable Media 2ITELR 73.”The case was a petition under the Fraudulent Transfers Act 1736 for an order that the petitioner could enforce a judgement against two Isle of Man companies. The Petitioner, a local Estate Agent (Realtor), Mr A, had sold out to a Purchaser, Mr W. The deal was structured so that the business was transferred to a new company, A Ltd, which was owned by Mr W. Because of local legislation, an Estate Agency business must have a qualified person in management. Mr A was so qualified. Mr W was not. Therefore, the services of Mr A were retained as a director of A Ltd.There was a disagreement between Mr A and Mr W, and the terms of the agreement were not carried out. Mr W, needing a qualified person, did a deal with Mr M, who was so qualified. Part of the business was transferred into one of the companies; the other part, which required a qualified person to be involved, was transferred to the second company with which Mr M was associated.Mr A obtained a judgement for specific performance of the agreement, but was unable to enforce it against A Ltd, since the asset had been transferred out of A Ltd to the two new companies. Mr A petitioned under the Fraudulent Assignments Act 1736 to have the transfers set aside as fraudulent transfers.The Deemster (as a High Court Judge is called in the Isle of Man) rejected the Petition.HELD
(1) For the 1736 Act to apply, there must be an intent to defraud creditors. This intent applies only to present debts, not contingent or future debts which may never materialise. Present debts include known and ascertained debts which are to fall due on a date in the future.
(2) At the time of the transfers to the two companies, the petitioner had not yet served his defence and counterclaim to the action. The judgement debt was not therefore a present debt. The transfers were bona fide and not contrived to defraud creditors.
The Deemster considered the implications of the ‘Statute of Elizabeth’ and the Fraudulent Assignments Act 1736 at great length. This included a judgement of the Judicial Committee of the Privy Council of 1859. He also considered the ‘obiter dicta’ of Deemster Kneen in the unreported case of Re Corrin’s bankruptcy (1908)19, which those who have followed the Isle of Man’s law in this area will be aware of.What does all this mean in practice. It means that Asset Protection Trusts or LLCs established in the Isle of Man are now safe in Manx law, provided that, at the time of establishment, the Settlor was solvent, was able to meet all his known and ascertainable creditors, and had no intent to defraud creditors.
The conclusion of this is that the options for asset protection planning have substantially changed in the last year or two. There is now more choice, not less. For would be fraudsters, the options have diminished, For everyone else, the options have expanded.
1. Very few jurisdictions doing substantial offshore business have such agreements with the USA. Very few are subject to the Brussels and Lugano Conventions on the Reciprocal Enforcement of Judgements nor the Rome Convention on applicable contract law. See also note 15, infra.
2. Treas.Reg 301.770 as amended and in force January 1, 1997
3. Internal Rev Code, s.957
4. Internal Rev Code, s.552
5. Internal Rev Code, s.1296
6. Internal Rev Code, s.671 through 679
7. Internal Rev Code, s.1361. The prohibition of a Non Resident Alien from being a shareholder in an S-Corporation was ended in 1982, P.L. 97-354 §2.
8. Under the previous classification regulations, an LLC failed, by design, to meet the definitions of a corporation set out in the former Treas. Reg 301.7701 – 1(a)(i) but this was changed by the new Regs adopted on January 1 1997 (the Check-the-box Regulations). An LLC is now be a default corporation, because all its members have limited liability, (Treas.Reg 301.7701-3(b)(2)(B)) but it can make a one-off election by filing Form 8832 to be treated as a Partnership, and thus obtain transparency (Treas. Reg 301-7701-3(c)(1)).
9. Fraudulent Conveyances Act 1571 (13 Eliz I Cap 5)
10. Re the Petition of Christopher Jollian Heginbotham 1999 2ITELR 95
11. 515 South Orange Grove Owners Association and Others v. Orange Grove Partners and others (No.1) (1995) CA 1/95 and CA 1./96, Cook Islands, and 515 South Orange Grove Owners Association and Others v. Orange Grove Partners and others (No.2) (1997/98) 1 OFLR3)
12 Re Stephan Jay Lawrence, Debtor, Case no 97-14687, BKC-AJC-Chapter 7, 2ITELR283
13 Federal Trade Commission v Affordable Media LLC, Denyse Anderson and Michael Anderson, Case no 98-16378, US Ct of Appeals 9th Circuit, 2 ITELR 73
14 A bailment is a relationship created when there is no intention on the part of the baillor (equivalent to the settlor) to lose control. (cf. handing a coat into a hotel cloakroom for safe keeping.) See Clough Mill Ltd v. Martin - Court of Appeal [1948] 3 All E.R. 982
15 There is no Reciprocal Enforcement of Judgement Agreement between the Isle of Man and the USA. In the Isle of Man, the Judgements (Reciprocal Enforcement) (Isle of Man) Act 1968 provides for reciprocal agreements, but there has never been such an agreement with the USA.
16 The LLC has filed Form 8832 and elected to be taxed as a partnership. As a consequence, the income and gains of the LLC is attributed directly to the Members. If a Members’ interest is taken over by a successor, so also is the tax liability, irrespective of whether actual distributions are being made by the LLC.
17 Trustee in bankruptcy.
18 Published by Butterworths, London UK. In the USA available from Lexis Law Publishing, Charlottesville, Virginia ISSN 1464-7125.19 Re Corin Bankruptcy, Kermode Trustee of Corin’s bankruptcy v Craig (1908), see Asset Protection Trusts – Grundy, Briggs & Field, 3rd Edition, at p.12 (ISBN 1 870070 80 1)
For some years, the favoured mechanism of Asset Protection vehicles, that is to say, vehicles for the protection of the assets of US persons from litigious creditors, has been the offshore trust. Indeed, it had almost reached the point where nothing else was ever mentioned, in spite of the fact that there always have been a variety of mechanisms available.
The original reason for this was a tax reason. At that time, and indeed, still today, the objective was to establish a vehicle into which assets could be placed which
- protected the assets from attack through the US judicial system· would be able to make the assets available, if necessary, to the client and/or his family
- would at worst be entirely tax neutral and at best enable routine Estate Tax planning to be done.
To achieve the first objective was comparatively simple - just get the assets out of the USA into a jurisdiction which had no Reciprocal Enforcement of Judgements Agreement1.
The actual holding mechanisms available then had to be selected.
At that time, the Limited Liability Company (LLC) was not available. In addition, the older classification rules of the IRS were still in force, and had not been replaced by the Check-the-Box Regulations, which were introduced in 19972.All offshore Corporate forms were, as a consequence, ruled out because an overseas holding corporation would have been a Controlled Foreign Corporation3. Quite apart from the enhanced reporting requirements implicit in a Controlled Foreign Corporation (CFC) with Sub-Part F income, a Foreign Personal Holding Company (FPHC)4, a Passive Foreign Investment Company (PFIC)5 and the other implications of being caught up in Prof. Harvey Dale’s renowned five armed Pentapuss (now six-armed with the addition of the PFIC), there is a distinct penalty provision in relation to Basis step-up for Capital Gains Tax, derived from the rules in IRC s.1246(e) and 1291(e). The tax consequences of using a CFC for asset protection were therefore prohibitive.The Limited Partnership was another vehicle which was used extensively inside the USA, but in those days, few offshore jurisdictions had them, although they have been in the statute book in the Isle of Man since 1909 (Partnership Act, 1909).Many US Practitioners then looked at Trusts for Asset Protection. They found that there was a rich tradition of Trusts being used for ‘Asset Protection’ in a more general sense - indeed, there is scarcely any other purpose for a Trust.For tax purposes, they were brilliant, since a trust established by a US person which he was also capable of benefiting from was a Grantor Trust6, and therefore entirely transparent for income and capital gains tax purposes. Thus the offshore trust was tax neutral, but was still capable of being structured for basic estate tax planning.
There were, of course, some drawbacks. Firstly, the establishment of a foreign trust, even though a Grantor Trust, led to enhanced reporting. This could, in theory be cured, by making the trust a domestic trust. This could be done by providing as a joint trustee, a US trustee, and by ensuring that the provisions of IRC s. 7701(a)(30) were met. The trustee would resign the moment the heat was turned up, but until that time it could be argued that the trust to argue was a US domestic trust for tax purposes, notwithstanding that the proper law was overseas, as were the assets, and the actual management of those assets.The second drawback was the desirability of having a holding company below the trust. Such a company immediately plunged the structure back into the CFC problem. There were three solutions to these CFC problems. Either the assets were transferred direct into a bank ‘street’ name or nominee company. Or, they were held in a US corporation, which because of the tax attribution back to the Grantor, could be a transparent S-corporation7, or, thirdly, the assets were held in a foreign corporation which, although owned by the Trustee, was arguably a nominee company, relying on the decision in Commissioner v Bollinger 108 S.Ct 1173(1988).None of these was very satisfactory. Not all assets can be held in a “street name”. The use of a US S-corporation immediately brought the ownership of the assets back into the USA, where they could be frozen and/or sequestrated. But the use of a nominee company correctly made it impossible to use the company as a mechanism for the day-to day management of the assets by the client.The problem remained until the advent of the offshore LLC, which, by being classified as a partnership8 instead of a corporation enabled the Tax Transparent trust to have a Tax Transparent LLC beneath it, with the client as Manager of the LLC.
There were also other problems derived from the fundamental character of trust law itself, and from the so-called ‘Statute of Elizabeth’9. The most serious problem of all was perceived to be the issue of fraudulent transfer, and this still remains the biggest problem for a foreign trustee.Under normal English Common Law principles, the principles set out in the so-called Statute of Elizabeth (Fraudulent Conveyances Act 1571 (13 Eliz I Cap 5) are now contained in the UK’s Insolvency Act 1986) have been adopted in one way or another by every country which looks to England for the source of its law (in the USA, the Uniform Fraudulent Transfer Act 1984). This is not, technically, a matter of trust law, but is a matter of bankruptcy law. Where a person effects a transfer to a trust with the intent to defeat any future creditor, the transfer can be set aside and the trust declared void.Virtually every jurisdiction which had adequate equity-based trust law (anything else was and is far too risky in terms of dealing with the unknown) had also absorbed the principles of the Fraudulent Conveyances Act 1571 (13 Eliz I Cap 5).There is one jurisdiction, however, which while being an absolutely traditional Common Law jurisdiction, has never been afflicted by the problems thrown up by the Statute of Elizabeth.In the Isle of Man there was considerable uncertainty concerning fraudulent transfer, and, in consequence, after a promising start in the Asset Protection business, the Isle of Man fell by the wayside. But, in 1999 came the case of Re Heginbotham’s Petition 199910. In that case, it was determined that the Statute of Elizabeth had never been accepted into Manx law. Different Manx legislation applied, and in consequence Asset Protection Trusts or other structures established in the Isle of Man are now safe, provided that, at the time of establishment, the Settlor was solvent, was able to meet all his known and ascertainable creditors, and had no intent to defraud creditors. We shall examine this case in a little more depth later on.Elsewhere, the Asset Protection Trust has been running into problems, largely derived from the equitable character of trust law, and the extreme reluctance of the courts to allow an equitable remedy to be used to deny equity to another party. Notwithstanding aggressive legislation in certain jurisdictions (which has caused some commentators to wonder whether trust law now actually exists in such jurisdictions, have been replaced entirely by bailments14, the courts have shown a determination to uphold basic rules of equity.In consequence, we have the excitements of the Orange Grove11 case in the Cook Islands, the Lawrence case12 and the more recent Anderson case13, where the settlor went to prison for contempt for failing to return the funds to the USA. Effectively, the trusts were treated as bailments.As all this was happening, there were changes to the law too. In August 1996, the USA enacted the Small Business Jobs Protection Act 1996, which, under the wing of a fairly innocuous piece of social security legislation, fundamentally altered the tax rules relating to foreign Grantor Trusts. As far as Asset Protection Trusts are concerned, it abolished the charade of the foreign trust being a ‘US Trust’ for tax purposes, and thereby forced the reporting regime for foreign trusts on all offshore Asset Protection Trusts. It also greatly enhanced that reporting regime, including a requirement on the offshore trustee to provide information, and appoint an agent in the USA for that purpose. This latter has caused real difficulties in situations where there are beneficiaries resident outside, as well as inside the US tax net.Finally, the Check-the-Box Regulations2 that came into force on 1st January 1997, changed the whole classification mechanism for entities, and thus the arguments that had been stitched together in favour of the use of the offshore Asset Protection Trust all came apart.Let us go back to first principles. We need to park assets offshore into an entity which is both transparent for tax purposes, and which provides substantial asset protection capability. We now know that the trust is subject to many difficulties, but these do not afflict the LLC. A properly designed LLC can provide tax transparency, as well as powerful Asset Protection features, which are not vulnerable to shifting sands of trust law.The offshore LLC, though, has its limitations. It cannot be used to do Estate Tax planning in the USA. It cannot cope with complex family inheritance issues. For such matters, a trust is needed. Such a trust, however, does not need to be offshore – it can easily be established in the USA itself, in a suitable state, as a domestic trust. Since the Asset Protection planning is being done in the offshore LLC, the domestic trust need not concern itself with asset protection. Thus, the preferred solution now is a domestic trust in which all the estate tax planning is effected, and, below it, an appropriately designed LLC, in which all the asset protection planning is done.In the Isle of Man, the LLC is a legal entity created under the Limited Liability Companies Act 1996. It is not a Trust. No US court will have jurisdiction. Only the Isle of Man Courts have jurisdiction. An order made by a US court requiring the US Client to instruct the overseas Trustee to instruct the LLC to distribute the assets will not be enforced in the Isle of Man15.There are three members of such an LLC. The US person will have a 99.9% interest, and two offshore members will have (genuinely and beneficially) an 0.01% interest between them (there are no de minimis rules.) All decisions have to be made unanimously.The parties attacking the US Client will first have to demolish the US domestic trust. After that, they will have to take the action to the Isle of Man courts15, and endeavour to obtain a charging order over the US Client’s beneficial Interest. But that will achieve nothing, since they cannot obtain any access to funds in the LLC, while now having a tax liability commensurate with their 99.9% interest16. This means that no transferee can force a distribution. He can only wait until the members unanimously decide to make a distribution. This could be never.Furthermore, in consequence of the decision in Re the Petition of Christopher Jollian Heginbotham 199910, the transfer to the LLC cannot be attacked, even though the trust may have been set aside in the USA. Asset Protection LLCs established in the Isle of Man are now safe in Manx law, provided that, at the time of establishment, the Settlor was solvent, was able to meet all his known and ascertainable creditors, and had no intent to defraud creditors.For many years, there has been considerable uncertainty in the Isle of Man relating to the law of fraudulent transfer. This arose because the Isle of Man, as a jurisdiction is, and always has been separate and distinct from that of England, and thus English law was never ‘received’ in the same way as, for example, it was received into former English colonies, including the USA. The infamous ‘Statute of Elizabeth’, or more properly, the English Fraudulent Conveyances Act 1571 (13 Eliz I Cap 5) was never adopted in the Isle of Man. The earliest legislation on the subject in the Isle of Man is the Fraudulent Assignments Act 1736 of which, today, just one section remains in force. This reads as follows:“(4) And that all fraudulent Assignments or Transffers [sic] of the Debtor’s Goods of Effects shall be void and of no effect against his just Creditors, any Custome or Practice to the contrary notwithstanding.”The only other reference in Manx legislation is to found in the The Bankruptcy Code 1892.Section 30 of that Act reads:“Avoidance of voluntary Settlements(1) Any Settlement of property, not being a settlement made before and in consideration of marriage, or made in favour of a purchaser or encumbrancer in good faith and for valuable consideration, or a settlement made on or for the wife and children of the settlor of property which has accrued to the settlor after marriage in right of his wife, shall, if the settlor becomes bankrupt within two years after the date of settlement, be void against the trustee1, and shall if the settlor becomes bankrupt at any subsequent time within ten years after the date of the settlement, be void against the trustee 17 unless the parties claiming under the settlement can prove that the settlor was at the time of making the settlement able to pay all his debts without the aid of the property comprised in the settlement, and that the interest of the settlor had passed to the trustee of such settlement on the execution thereof.(2) .........(3) ‘Settlement’ shall for the purposes of this section, include any conveyance or transfer of property.”Thus the whole situation relating to future creditors, (i.e. creditors not existing or being ascertainable at the time of the settlement is effected and arising subsequent to such a settlement having been made) was unknown.This is of great significance because the Isle of Man was one of the pioneer jurisdictions for asset protection trusts, but fell by the wayside because of uncertainty on this point. In addition, the Isle of Man turned its face against the type of ‘debtor’ protection legislation as was adopted in many other jurisdictions, to the extent that the Isle of Man does not even feature on a list of jurisdictions favored for asset protection work.However, as a result of the judgement in Re the Petition of Christopher Jollian Heginbotham 199910, the uncertaint has been resolved. The note of the Editor of the International Trust and Estate Law Reports 18 (Philip Baker) states:-“The issue decided by this case had not previously been settled in Isle of Man jurisprudence. The issue is of relevance because the Isle of Man has eschewed specific asset protection legislation. This case now establishes (subject to any contrary decision of a higher court) that a transfer of asset to a trust, for example, cannot be set aside at the instance of creditors whose debts were not known and ascertained at the time of the transfer. Thus so long as the transferor is not in a ‘state of insolvency’ at the time of the transfer - that is, he can pay all his known and ascertained debts, including those falling due on a future date - the transfer cannot be set aside.This case also confirms the general principle that a trust, bona fide established by a person who is not insolvent, is a perfectly good asset protection arrangement. In some instances, the use of a trust in a territory with strong asset protection legislation - such as in the Cook islands - is an indication that the transferor was not bona fide or knew of future debts he wished to avoid. On the outcome of creating an asset protection trust under such a regime, see FTC v Affordable Media 2ITELR 73.”The case was a petition under the Fraudulent Transfers Act 1736 for an order that the petitioner could enforce a judgement against two Isle of Man companies. The Petitioner, a local Estate Agent (Realtor), Mr A, had sold out to a Purchaser, Mr W. The deal was structured so that the business was transferred to a new company, A Ltd, which was owned by Mr W. Because of local legislation, an Estate Agency business must have a qualified person in management. Mr A was so qualified. Mr W was not. Therefore, the services of Mr A were retained as a director of A Ltd.There was a disagreement between Mr A and Mr W, and the terms of the agreement were not carried out. Mr W, needing a qualified person, did a deal with Mr M, who was so qualified. Part of the business was transferred into one of the companies; the other part, which required a qualified person to be involved, was transferred to the second company with which Mr M was associated.Mr A obtained a judgement for specific performance of the agreement, but was unable to enforce it against A Ltd, since the asset had been transferred out of A Ltd to the two new companies. Mr A petitioned under the Fraudulent Assignments Act 1736 to have the transfers set aside as fraudulent transfers.The Deemster (as a High Court Judge is called in the Isle of Man) rejected the Petition.HELD
(1) For the 1736 Act to apply, there must be an intent to defraud creditors. This intent applies only to present debts, not contingent or future debts which may never materialise. Present debts include known and ascertained debts which are to fall due on a date in the future.
(2) At the time of the transfers to the two companies, the petitioner had not yet served his defence and counterclaim to the action. The judgement debt was not therefore a present debt. The transfers were bona fide and not contrived to defraud creditors.
The Deemster considered the implications of the ‘Statute of Elizabeth’ and the Fraudulent Assignments Act 1736 at great length. This included a judgement of the Judicial Committee of the Privy Council of 1859. He also considered the ‘obiter dicta’ of Deemster Kneen in the unreported case of Re Corrin’s bankruptcy (1908)19, which those who have followed the Isle of Man’s law in this area will be aware of.What does all this mean in practice. It means that Asset Protection Trusts or LLCs established in the Isle of Man are now safe in Manx law, provided that, at the time of establishment, the Settlor was solvent, was able to meet all his known and ascertainable creditors, and had no intent to defraud creditors.
The conclusion of this is that the options for asset protection planning have substantially changed in the last year or two. There is now more choice, not less. For would be fraudsters, the options have diminished, For everyone else, the options have expanded.
1. Very few jurisdictions doing substantial offshore business have such agreements with the USA. Very few are subject to the Brussels and Lugano Conventions on the Reciprocal Enforcement of Judgements nor the Rome Convention on applicable contract law. See also note 15, infra.
2. Treas.Reg 301.770 as amended and in force January 1, 1997
3. Internal Rev Code, s.957
4. Internal Rev Code, s.552
5. Internal Rev Code, s.1296
6. Internal Rev Code, s.671 through 679
7. Internal Rev Code, s.1361. The prohibition of a Non Resident Alien from being a shareholder in an S-Corporation was ended in 1982, P.L. 97-354 §2.
8. Under the previous classification regulations, an LLC failed, by design, to meet the definitions of a corporation set out in the former Treas. Reg 301.7701 – 1(a)(i) but this was changed by the new Regs adopted on January 1 1997 (the Check-the-box Regulations). An LLC is now be a default corporation, because all its members have limited liability, (Treas.Reg 301.7701-3(b)(2)(B)) but it can make a one-off election by filing Form 8832 to be treated as a Partnership, and thus obtain transparency (Treas. Reg 301-7701-3(c)(1)).
9. Fraudulent Conveyances Act 1571 (13 Eliz I Cap 5)
10. Re the Petition of Christopher Jollian Heginbotham 1999 2ITELR 95
11. 515 South Orange Grove Owners Association and Others v. Orange Grove Partners and others (No.1) (1995) CA 1/95 and CA 1./96, Cook Islands, and 515 South Orange Grove Owners Association and Others v. Orange Grove Partners and others (No.2) (1997/98) 1 OFLR3)
12 Re Stephan Jay Lawrence, Debtor, Case no 97-14687, BKC-AJC-Chapter 7, 2ITELR283
13 Federal Trade Commission v Affordable Media LLC, Denyse Anderson and Michael Anderson, Case no 98-16378, US Ct of Appeals 9th Circuit, 2 ITELR 73
14 A bailment is a relationship created when there is no intention on the part of the baillor (equivalent to the settlor) to lose control. (cf. handing a coat into a hotel cloakroom for safe keeping.) See Clough Mill Ltd v. Martin - Court of Appeal [1948] 3 All E.R. 982
15 There is no Reciprocal Enforcement of Judgement Agreement between the Isle of Man and the USA. In the Isle of Man, the Judgements (Reciprocal Enforcement) (Isle of Man) Act 1968 provides for reciprocal agreements, but there has never been such an agreement with the USA.
16 The LLC has filed Form 8832 and elected to be taxed as a partnership. As a consequence, the income and gains of the LLC is attributed directly to the Members. If a Members’ interest is taken over by a successor, so also is the tax liability, irrespective of whether actual distributions are being made by the LLC.
17 Trustee in bankruptcy.
18 Published by Butterworths, London UK. In the USA available from Lexis Law Publishing, Charlottesville, Virginia ISSN 1464-7125.19 Re Corin Bankruptcy, Kermode Trustee of Corin’s bankruptcy v Craig (1908), see Asset Protection Trusts – Grundy, Briggs & Field, 3rd Edition, at p.12 (ISBN 1 870070 80 1)
INTERNATIONAL BUSINESS COMPANIES (AMENDMENT)
Finally, the BVI legislature has approved and released the much awaited provisions dealing with the immobilization of Bearer Shares and the definition of “Custodian” that is incidental to the restrictive use of bearer shares. As expected, the Bearer Shares changes came as an amendment to the BVI International Business Company Law. The “Custodian” legislation came as a modification to the Financial Services Commission Act.
Although some of these provisions are yet to formally be made public in the BVI Gazette, such publication is expected in the coming weeks. Below is a summary of the most relevant aspects, for your reference:
1. INTERNATIONAL BUSINESS COMPANIES (AMENDMENT) ACT, 2004.Amendments to the International Business Companies (IBC’s) will ultimately require that all bearer shares in BVI IBC’s be held by a custodian and thus immobilized. Companies formed after 1 January 2005 must comply with these requirements from their date of formation. Alternatively, BVI IBC’s may be issued with registered shares.
However, Section 2 of the International Business Companies Act is amended to move back the deadline for the immobilization of bearer shares that are in existence prior to 1 January 2005, from the initially proposed date of 31 December 2004, to 31 December 2010. Thus, you will not need to be concerned about the restrictions on bearer shares for those companies formed previously, and up to 31 December 2004, at least until the year 2010.
2. FINANCIAL SERVICES COMMISSON (AMENDMENT) ACT, 2004:
a. Authorized Custodian of Bearer Shares
This amendment act introduces a new section 50A to the BVI Financial Services Act that provides for the approval of authorized custodians by the BVI Financial Services Commission (“FSC”).
An Authorized custodian will be either (i) the holder of a license under any financial services legislation; or (ii) a body corporate formed outside the BVI that is not resident in, and does not have a place of business in the BVI. In both cases, an applicant for approval must satisfy the FSC that it is a fit and proper person to act as an authorized custodian, and that it has the necessary security and compliance systems and procedures in place.
In determining whether a body corporate incorporated and operating outside the BVI is fit and proper to act as an authorized custodian, the FSC will also consider the prudential regulation exercised over, and anti-money laundering obligations imposed on such corporate body outside the BVI.
The amendment act provides in its new section 50C that the FSC may establish conditions for the approval of an authorized custodian and to vary or revoke said conditions. Also, under section 50D, the FSC is enabled to issue Guidance Notes specifying the practices and procedures it expects authorized custodians to follow.
To assist potential applicants for custodian status, the FSC has issued a new Aide Memoire, entitled Criteria for Approval of Authorized Custodians of Bearer Shares of BVI Incorporated Companies. In addition to providing an outline of the criteria that will be used by the FSC when approving custodians, the Aide Memoire addresses, inter alia, the duty of custodians and the grounds on which the FSC may revoke approvals. Based on the stringent requirements and compliance obligations, it is unlikely that many non-BVI companies, offices, trusts or firms, will be willing to apply for a custodian license.
Further, section 50E of the amendment act allows for the automatic revocation of an authorized custodian’s license by the FSC if such person is no longer fit and proper to act as an authorized custodian, breaches any conditions to which its approval is subject, breaches any Guidance Notes issued by the FSC, or being a non-resident corporate body operating outside the BVI a person becomes resident or establishes a place of business in the BVI.
b. Recognized Custodian of Bearer SharesUnder a new section 50B, the FSC is also empowered to acknowledge as a recognized custodian of bearer shares, an investment exchange or a clearing organization operating securities clearance or settlement systems in a jurisdiction that is a member of the Financial Action Task Force (“FATF”).
c. Other ProvisionsThe principal Financial Services Act is amended such as to clarify that only courts of competent jurisdiction in the BVI are empowered to make an order for the disclosure of privileged information held by the FSC.Additionally, the amendment extends immunity from being sued to persons who disclose information pursuant to a request from the FSC under the Financial Services Act.
Although some of these provisions are yet to formally be made public in the BVI Gazette, such publication is expected in the coming weeks. Below is a summary of the most relevant aspects, for your reference:
1. INTERNATIONAL BUSINESS COMPANIES (AMENDMENT) ACT, 2004.Amendments to the International Business Companies (IBC’s) will ultimately require that all bearer shares in BVI IBC’s be held by a custodian and thus immobilized. Companies formed after 1 January 2005 must comply with these requirements from their date of formation. Alternatively, BVI IBC’s may be issued with registered shares.
However, Section 2 of the International Business Companies Act is amended to move back the deadline for the immobilization of bearer shares that are in existence prior to 1 January 2005, from the initially proposed date of 31 December 2004, to 31 December 2010. Thus, you will not need to be concerned about the restrictions on bearer shares for those companies formed previously, and up to 31 December 2004, at least until the year 2010.
2. FINANCIAL SERVICES COMMISSON (AMENDMENT) ACT, 2004:
a. Authorized Custodian of Bearer Shares
This amendment act introduces a new section 50A to the BVI Financial Services Act that provides for the approval of authorized custodians by the BVI Financial Services Commission (“FSC”).
An Authorized custodian will be either (i) the holder of a license under any financial services legislation; or (ii) a body corporate formed outside the BVI that is not resident in, and does not have a place of business in the BVI. In both cases, an applicant for approval must satisfy the FSC that it is a fit and proper person to act as an authorized custodian, and that it has the necessary security and compliance systems and procedures in place.
In determining whether a body corporate incorporated and operating outside the BVI is fit and proper to act as an authorized custodian, the FSC will also consider the prudential regulation exercised over, and anti-money laundering obligations imposed on such corporate body outside the BVI.
The amendment act provides in its new section 50C that the FSC may establish conditions for the approval of an authorized custodian and to vary or revoke said conditions. Also, under section 50D, the FSC is enabled to issue Guidance Notes specifying the practices and procedures it expects authorized custodians to follow.
To assist potential applicants for custodian status, the FSC has issued a new Aide Memoire, entitled Criteria for Approval of Authorized Custodians of Bearer Shares of BVI Incorporated Companies. In addition to providing an outline of the criteria that will be used by the FSC when approving custodians, the Aide Memoire addresses, inter alia, the duty of custodians and the grounds on which the FSC may revoke approvals. Based on the stringent requirements and compliance obligations, it is unlikely that many non-BVI companies, offices, trusts or firms, will be willing to apply for a custodian license.
Further, section 50E of the amendment act allows for the automatic revocation of an authorized custodian’s license by the FSC if such person is no longer fit and proper to act as an authorized custodian, breaches any conditions to which its approval is subject, breaches any Guidance Notes issued by the FSC, or being a non-resident corporate body operating outside the BVI a person becomes resident or establishes a place of business in the BVI.
b. Recognized Custodian of Bearer SharesUnder a new section 50B, the FSC is also empowered to acknowledge as a recognized custodian of bearer shares, an investment exchange or a clearing organization operating securities clearance or settlement systems in a jurisdiction that is a member of the Financial Action Task Force (“FATF”).
c. Other ProvisionsThe principal Financial Services Act is amended such as to clarify that only courts of competent jurisdiction in the BVI are empowered to make an order for the disclosure of privileged information held by the FSC.Additionally, the amendment extends immunity from being sued to persons who disclose information pursuant to a request from the FSC under the Financial Services Act.
JP MORGAN FORECAST ON DOMINICAN REPUBLIC PAYMENT
The umbrella of the grace period is a bad signal.
The present is a free summary of the information released by Dominican newspaper Diario Libre
The Dominican authorities requested an extension to start accommodations with the Club of Paris regarding the payment of the external debt of the Dominican Republic. The meeting for renegotiation of bilateral debt repayment was scheduled for march, and now it will take place on April. The experts of JP Morgan said that is a fact that the payment of the US$11-million due on 28 February for the PDI Brady Bond will not be made on time. They stress nevertheless that the Dominican Republic is entitled to a 15 days grace period.
According to Morgan, DR still has a considerable limitation on resources, giving rise to the theory that the Paris Club was putting a lot of Pressure over the Country to display its equal treatment with private investors. Morgan confirmed that the IMF recommended to DR to keep up to date in payments until it reaches an agreement with the Paris Club.
The postponement of accommodations until April, “further complicates the things”, because there is another payment in the amount of US$23.74 millions on the 06 bonds due on March 27 (with a 30 days grace period). Finally according to JP Morgan the late payments on 06 bonds would be used to negotiate with Paris Club. The goal is to postpone payments to private creditors, and odds are that private creditors will no receive more payments on 2004.
COSTASUR DOMINICANA TO WITHHELD LUXURY TAX IVSS
In January, specifically the 27th, Direccion General de Impuestos Insternos, similar to Internal RevenueService enacted an special resolution converting Costasur Domnicana, S.A. in a sort of Agency in charge of collectingthe property tax or IVSS from owners. Therefore IVSS (property tax) is changing its form to a withholding tax. It is still a levy or contribution over the property but from this year Casa de Campo would be responsible for the collection of the levy.
onsequently Costasur may charge the luxury tax (IVSS) directly to those clients with balances outstanding with Internal Revenue Office (even if they don’t want to pay the IVSS) because Costasur is liable to pay the property tax on its expenses. In other words Costasur is liable (jointly and severally liable) for owner’s obligations. The purpose of the resolution then, is to enable enforcement of legislation 18-88 relative to property tax or IVSS.
We may say: “then I am not going to pay the property tax through them I am going to do it by myself”, because I don’t consider appropriate to live my property on their free will. Or perhaps because you may think that they may retain the funds (I don’t think they can) and then do not report it to Internal Revenue Office. The answer is that yes you can pay the property tax directly to Internal Revenue Office. However in my opinion from now on it is almost impossible to default property tax payment; provided that Costasur is bound by the resolution above mentioned, in a short period of time if they are required to make a payment on behalf of an owner that went into default, they may cut out the services to this client, such as telephone, electricity, if said owner does not fulfill his obligations with respect to the property tax.
The resolution is no doubt against the Dominican constitution for a lot of reasons, but only in the event of a judgment from the Supreme Court against the resolution owners are bound by said, and so far I don’t see a loophole to bypass it.
PUNTA CANA GETS THE MOST VISITORS
SANTO DOMINGO. Almost half the total number of tourists who came to this country arrived through the Punta Cana airport, according to the most recent report of the Central Bank on tourists flow. This past January, 46.8% of the foreigners and non-residents who arrived in this country came in through that terminal.
Puerto Plata ranked second, having received 25.6% of the visitors during the first month of the year, whereas Las Americas terminal recorded 15.9%.
La Romana Airport mobilized 10.0%, and the remaining 1.7% came in through the Cibao and the Herrera terminals, according to the official report.
The report states that, although it took second place for the number of tourists mobilized, Puerto Plata is the most dynamic, with a growth of 26.0%. In Punta Cana, the increase amounts to 7.8%, but Las Américas, La Romana, Cibao and Herrera, reported a decline of 4.5%, 5.6%, 9.6% and 38.3%, respectively.
BRAZILIAN COMPANY BUYS 51% IN PEPSI RD AND WILL ESTABLISH BREWERY
AmBev is the number 1 brewery in that South American country and the fifth largest in the world.
SAO PAULO. AmBev, the largest beer company in Brazil, will expand its operations in Latin America after paying US$100 million for the control of the only distributor of Pepsico in the Dominican Republic, and for establishing a brewery.
AmBev will pay US$60 million for 51% of Pepsi shares in Embotelladora Dominicana CxA (Embodom), and it will eventually increase its participation to 66%, after establishing a brewery and contributing US$10 million more in cash. Embodom distributes Pepsi Cola, 7up, Mirinda, Red Rock and Mont Pellier water.
Scope
Juan Vergara, Ambev's International CEO considered that "the Dominican market is very promising." According to Ambev's estimations, the Dominican beer market is approximately 3.2 million hectoliters per year (35 liters per person, per year), and it generates over US$430 million.
Expansion
This agreement marks the beginning of AmBev's operations in the Caribbean. In the last three years, this company took over the major beer company in Argentina, Uruguay and Paraguay, introduced itself in Guatemala, and made investments in Ecuador and Peru.
SAO PAULO. AmBev, the largest beer company in Brazil, will expand its operations in Latin America after paying US$100 million for the control of the only distributor of Pepsico in the Dominican Republic, and for establishing a brewery.
AmBev will pay US$60 million for 51% of Pepsi shares in Embotelladora Dominicana CxA (Embodom), and it will eventually increase its participation to 66%, after establishing a brewery and contributing US$10 million more in cash. Embodom distributes Pepsi Cola, 7up, Mirinda, Red Rock and Mont Pellier water.
Scope
Juan Vergara, Ambev's International CEO considered that "the Dominican market is very promising." According to Ambev's estimations, the Dominican beer market is approximately 3.2 million hectoliters per year (35 liters per person, per year), and it generates over US$430 million.
Expansion
This agreement marks the beginning of AmBev's operations in the Caribbean. In the last three years, this company took over the major beer company in Argentina, Uruguay and Paraguay, introduced itself in Guatemala, and made investments in Ecuador and Peru.
MORE ON FREE TRADE AGREEMENT TLC.
The Free Trade Agreement (TLC) with the United States is the most important topic on financial matters in the Dominican Republic. Its importance lies in the structural changes that it could produce, such as reduction of tariff bariers, not volumes, and duties. Other probable changes might affect the legal structure, particularly Law number 20-00 on Industrial Property, regarding the time granted for patent protection and information disclosure, and Law 173 ton the protection of import agents.
A corollary of these changes would be (in connection with the two laws above mentioned) that the domestic pharmaceutical industry would be totally unprotected against the possibility of a massive incursion of foreign markets with medicines priced apparently higher than those made in this country. With respect to legislation 173, its derogation would imply in theory the entry to the Dominican Republic of products and trademarks from any region, wich would affect the local industry.
The agreement has been criticized mostly by those who believe that it would not be advantegeous for this country which (according to the view point of this group) already had preferential tariffs for export volumes to the United States, not for individual items, as are currently being negociated. For those who share this opinion, a change of government might result in stagnation for the agreement, because the new government will not have the support of the Dominican Congress.
Nevertheless, the agreement seems to be a done deal, and this country should proceed to submit its letter of intent before March of this year, with a schedule of those products and items that would be the subject of customs liberalization. However, statements made by Ms. Sonia Guzmán, the Chief of the negociating team of the Dominican Republic, seem to indicate that the tariff structure will be affected within a range of 60% to 80%. This will undoubtedly represent a sacrifice in terms of government income and will probably be compensated by amending the Tax Code. According to the information received, the labor aspect of the agreement and intellectual property were left pending for the round in Washington.
THE AGREEMENT MADE WITH IMF INVOLVE CHANGES IN THE TAX SRUCTURE.
The Dominican Republic breached the first agreement made with the IMF when it bought the energy companies Union Fenosa, Edenorte and Edesur, which resulted in a huge financial deficit for the government, because it had to apply large sums to such purchases. Under the new agreement concluded with the IMF the government is commited to strengthening its tax controls and its receipts structure, and to work on preventing tax evasion, as well as to curb monetary emissions in order to control, among other things, the increase in the rate of exchange of foreign currency. The government should als refor the energy sector in order to recuperate the energy distribution companies and stabilize the system. This will result, no doubt, in higher electricity bills, which are already too high.
In 2004, the government should implement financial policies equivalent to 205% of the Gross Domestic Product; increase taxes in 0.5%, and reduce its expenses by 2%. The projections for the external account is that there should be a surplus with a financing need of more than US$1,000,000.00.
PURPOSES OF THE AGREEMENT
A corollary of these changes would be (in connection with the two laws above mentioned) that the domestic pharmaceutical industry would be totally unprotected against the possibility of a massive incursion of foreign markets with medicines priced apparently higher than those made in this country. With respect to legislation 173, its derogation would imply in theory the entry to the Dominican Republic of products and trademarks from any region, wich would affect the local industry.
The agreement has been criticized mostly by those who believe that it would not be advantegeous for this country which (according to the view point of this group) already had preferential tariffs for export volumes to the United States, not for individual items, as are currently being negociated. For those who share this opinion, a change of government might result in stagnation for the agreement, because the new government will not have the support of the Dominican Congress.
Nevertheless, the agreement seems to be a done deal, and this country should proceed to submit its letter of intent before March of this year, with a schedule of those products and items that would be the subject of customs liberalization. However, statements made by Ms. Sonia Guzmán, the Chief of the negociating team of the Dominican Republic, seem to indicate that the tariff structure will be affected within a range of 60% to 80%. This will undoubtedly represent a sacrifice in terms of government income and will probably be compensated by amending the Tax Code. According to the information received, the labor aspect of the agreement and intellectual property were left pending for the round in Washington.
THE AGREEMENT MADE WITH IMF INVOLVE CHANGES IN THE TAX SRUCTURE.
The Dominican Republic breached the first agreement made with the IMF when it bought the energy companies Union Fenosa, Edenorte and Edesur, which resulted in a huge financial deficit for the government, because it had to apply large sums to such purchases. Under the new agreement concluded with the IMF the government is commited to strengthening its tax controls and its receipts structure, and to work on preventing tax evasion, as well as to curb monetary emissions in order to control, among other things, the increase in the rate of exchange of foreign currency. The government should als refor the energy sector in order to recuperate the energy distribution companies and stabilize the system. This will result, no doubt, in higher electricity bills, which are already too high.
In 2004, the government should implement financial policies equivalent to 205% of the Gross Domestic Product; increase taxes in 0.5%, and reduce its expenses by 2%. The projections for the external account is that there should be a surplus with a financing need of more than US$1,000,000.00.
PURPOSES OF THE AGREEMENT
- To ensure the reduction of the public sector debt in order to arrive at 40% of the GDP in 2008, through strong financial growth and the sale of public assets (real estate, mines, shares of stock and securities in the Central Bank) equivalent to 6% of the GDP.
- To reduce public deficit to 3.75% in 2004, and to further another reduction of 1.8% of the GDP in 2005, after the tax reform becomes effective.
- To eliminate tax exemptions to the ITBIS (tax on the transfer of goods an services) and other Income Tax exemptions, and to review tax rates including ITBIS and Selective Consumption Tax.
- To stablish an independent tax authority for customs and for internal revenue.
- To criminalize tax evasion.
- To prepare a reform proposal by the end of March, to be submitted to Congress before July, in close consultation with the IMF. This should focus on extending the internal revenue tax base, revising the rates, eliminating distortions, and compensating for tariff reductions.
TLC. FREE ACCESS OF 99% OF ITS MARKET TO THE DOMINICAN REPUBLIC
Pressure continues.
Us team of negotiator kept their pressure on Dominican team which persist in maintaining its list of protection.
San Juan Puerto Rico.
United States reaffirmed yesterday its interest in closing, as soon as possible, the agenda of free commerce with Dominican Republic.
In just two days of accommodations has offered to his Dominican partners free access to 99% of its market, 10% more of what has been given in the Cuenca del Caribe agreement. It just leaves out of the agreement 17 lines of shoes, two of canning Atun, and peanuts.
It is the most generous offer that has been made by the United States to any Country, remarked the chief leader of the negotiation team of Dominican Republic, Sonia Guzman. Although the letter of Dominican Republic continues to be a sort of secret, Guzman pointed out that the United States cannot pretend that the Dominican Republic will open its market in the same proportion. Acknowledges the need of protection.
The supposed list of priorities of the United States of access to the market circulated unofficially. Nevertheless, Mr. Jesus de los Santos and Osmar Benitez, coordinator and negotiator respectively, of access to Agriculture market and Sanitary measures denied the status of official of the document and that the same is the matrix of the accommodations. Is going to be today when the negotiators will start to work with the list of product that will enter as a part of the free commerce with the private sector. A hard task, considering that the Country has approximately 10,000.00 items. Guzman denied the rumors of pressure on her to eliminate duties for the products within technical rectification.
For more details on TLC, go to www.fgasoc.com.do, www.dominican-realestate.com.do.
Us team of negotiator kept their pressure on Dominican team which persist in maintaining its list of protection.
San Juan Puerto Rico.
United States reaffirmed yesterday its interest in closing, as soon as possible, the agenda of free commerce with Dominican Republic.
In just two days of accommodations has offered to his Dominican partners free access to 99% of its market, 10% more of what has been given in the Cuenca del Caribe agreement. It just leaves out of the agreement 17 lines of shoes, two of canning Atun, and peanuts.
It is the most generous offer that has been made by the United States to any Country, remarked the chief leader of the negotiation team of Dominican Republic, Sonia Guzman. Although the letter of Dominican Republic continues to be a sort of secret, Guzman pointed out that the United States cannot pretend that the Dominican Republic will open its market in the same proportion. Acknowledges the need of protection.
The supposed list of priorities of the United States of access to the market circulated unofficially. Nevertheless, Mr. Jesus de los Santos and Osmar Benitez, coordinator and negotiator respectively, of access to Agriculture market and Sanitary measures denied the status of official of the document and that the same is the matrix of the accommodations. Is going to be today when the negotiators will start to work with the list of product that will enter as a part of the free commerce with the private sector. A hard task, considering that the Country has approximately 10,000.00 items. Guzman denied the rumors of pressure on her to eliminate duties for the products within technical rectification.
For more details on TLC, go to www.fgasoc.com.do, www.dominican-realestate.com.do.
OPTION TO PURCHASE AND EARNEST MONEY DEPOSIT
Having been active in the real estate market in the Dominican Republic for many years, particularly in the tourist sector, we have at times noted a great confusion between the legal notion of the option to purchase and its effects when accompanied by a sum, which in our legislation is typified as earnest money.
First, we should point out that, although in practice an earnest money deposit usually consist of an amount of money, it does not neccesarily or indispensably have to be so. A financial instrument or any chattel that the parties deem of adequate value for entering into a contract may be considered as earnest money for the purpose of a real estate-operation. This leads to the conclusion that earnest money consitutes essentially a typical security for the fulfillment of such obligations as are normally established in an agreement of option to purchase, and it is therefore also known as handsel; and at the same time such term implies the granting of money or chattel as security or guarantee in a typical real-estate buying/selling deal.
The core of such constant confusion is the implementation of earnest money deposit in options to purchase. The option to purchase, also known as promise of sale, implies the unequivocal manifestation of one (or sometimes both) of the parties to sell a property to another in a given time. Therefore, in principle, an option to purchase should include a rescission period in order for the agreeement to be perfected and for the two wills to meet. What happens then, when a promise of sale has been made with earnest money or handsel? Such promise of sale implies the ability to retract because it gives both parties the right to withdraw from their commitment and to terminate their covenant sustaining a double penalty as established in article 1590 of our Civil Code, which reads as follows: "If a promise of sale has been made with an earnest money deposit or handsel, each of the contracting parties is entitled to rescind the contract, and the party who made such deposit shall forfeit it, and the party who received it should return such amount twofold" Many lawyers are wrong in understanding that a promise of sale always has the same force as a sale pursuant to article 1589.
In this case, the legislator has in fact introduced an extenuation to one of the effects of a consensual sale, i.e. the transmission of the premises and its risks. In other words, such effects are retarded pendente conditione until the parties waive their right to withdraw by executing a final contract. Thus, there is no actual sale until such time, the contents of article 1589 notwithstanding, since there con be no final agreement while a rescission is possible. Such misunderstanding is apparent when attempting to combine both articles. For many, a promise of sale has the same effect as a sale until it is rescinded.
This would imply that all risk of the chose would be born by th buyer. This notion is erroneous, according to our position regarding this matter. These two provisions may not be combined because they are antagonistic. The legislator´s intent was to sever one from the other. A promise of sale pure an simple, i.e. without earnest money deposit, has the same effect as a sale. A promise of sale with earnest money deposit involves the possibility to rescind such promise, to revoke it, to change one´s mind; it does not have the same effect as a sale until the parties involved give their final consent.
Freddy Miranda, Esq.
Former Professor Pontifical Catholic University PUCAMAIMA
Attorney at Law Figueroa Guilamo & Associates
www.fgasoc.com.do
fmiranda@fgasoc.com.do
First, we should point out that, although in practice an earnest money deposit usually consist of an amount of money, it does not neccesarily or indispensably have to be so. A financial instrument or any chattel that the parties deem of adequate value for entering into a contract may be considered as earnest money for the purpose of a real estate-operation. This leads to the conclusion that earnest money consitutes essentially a typical security for the fulfillment of such obligations as are normally established in an agreement of option to purchase, and it is therefore also known as handsel; and at the same time such term implies the granting of money or chattel as security or guarantee in a typical real-estate buying/selling deal.
The core of such constant confusion is the implementation of earnest money deposit in options to purchase. The option to purchase, also known as promise of sale, implies the unequivocal manifestation of one (or sometimes both) of the parties to sell a property to another in a given time. Therefore, in principle, an option to purchase should include a rescission period in order for the agreeement to be perfected and for the two wills to meet. What happens then, when a promise of sale has been made with earnest money or handsel? Such promise of sale implies the ability to retract because it gives both parties the right to withdraw from their commitment and to terminate their covenant sustaining a double penalty as established in article 1590 of our Civil Code, which reads as follows: "If a promise of sale has been made with an earnest money deposit or handsel, each of the contracting parties is entitled to rescind the contract, and the party who made such deposit shall forfeit it, and the party who received it should return such amount twofold" Many lawyers are wrong in understanding that a promise of sale always has the same force as a sale pursuant to article 1589.
In this case, the legislator has in fact introduced an extenuation to one of the effects of a consensual sale, i.e. the transmission of the premises and its risks. In other words, such effects are retarded pendente conditione until the parties waive their right to withdraw by executing a final contract. Thus, there is no actual sale until such time, the contents of article 1589 notwithstanding, since there con be no final agreement while a rescission is possible. Such misunderstanding is apparent when attempting to combine both articles. For many, a promise of sale has the same effect as a sale until it is rescinded.
This would imply that all risk of the chose would be born by th buyer. This notion is erroneous, according to our position regarding this matter. These two provisions may not be combined because they are antagonistic. The legislator´s intent was to sever one from the other. A promise of sale pure an simple, i.e. without earnest money deposit, has the same effect as a sale. A promise of sale with earnest money deposit involves the possibility to rescind such promise, to revoke it, to change one´s mind; it does not have the same effect as a sale until the parties involved give their final consent.
Freddy Miranda, Esq.
Former Professor Pontifical Catholic University PUCAMAIMA
Attorney at Law Figueroa Guilamo & Associates
www.fgasoc.com.do
fmiranda@fgasoc.com.do
DO IT YOURSELF IN REAL ESTATE IN THE DOMINICAN REPUBLIC
During our more than nine years of experience in the real estate and tourist markets, we have been greatly surprised to learn that many buyers do not consider their acquisitions to be a true investment. As soon as the purchase of a house, an apartment or a villa is considered an investment, the legal treatment varies substantially.
The first difference is the manner of acquisition. A real investment involves planning. The second factor is the preparation of the mechanism of acquisition—in most cases we recommend forming a company.
What type of company is recommended for purchasing real estate in the Dominican Republic, particularly in the tourist market? Can a foreigner buy shares or invest in real-estate through a company in the Dominican Republic? What is the best option to organize an investment—a Dominican company or a foreign company?
The last question is the most important. It all depends on your priorities, and above all on your interest in the investment. If it is a totally passive or enjoyment investment, the best option would be an off-shore company. Such company would become a simple shareholder. On the other hand, for an active investment, it is best to form a Dominican company, since such investment would yield rentals from a domestic source, and filing an income tax form would be mandatory.
There are no restrictions for foreigners wishing to purchase shares in the Dominican Republic, and, as regards the first question, in the case of a Dominican company, the best option is a stock company. If the formation of a foreign company is preferred, in our opinion it is imperative to form an IBC. These companies may be formed through our office. To obtain information about fees, please contact Freddy Miranda at fmiranda@fgasoc.com.do.
Let's take for example the case of an operation in the tourist market, focusing specially on the market of Casa de Campo, La Romana, on the eastern part of the Dominican Republic. In this market, the first element to consider is the construction time for the improvement and its boundaries. Then, it is advisable to verify the payment of common services, the absence of which could jeopardize the improvement, and finally the payment of property taxes which could cause a tax lien to be levied if the property purchased has an outstanding balance to the credit of the Internal Revenue Service.
Then, it is essential to make a formal examination of the title deed, particularly in the case of title deeds issued more than five years before. The ideal is to obtain a certification of liens and encumbrances from the Recorder of Deeds. In many cases, greater assurance may be obtained by means of a collateral on the property, to cover the risks.
If there is no title deed for the property, usually this type of resort has entered into a sales agreement with the buyer, which may be dissolved in order to make a direct sale to the new investor. In this case, it should be noted that in order to make the transfer, the buyer has to pay all appropriate taxes. Many unscrupulous lawyers misadvise their clients, saying that with this method there is no need to pay transfer tax, which is inexact. What is usual is for the seller to have his/her title deed so that the property may be purchased and transferred with no problems or difficulties. In practice, since the buyer has to pay transfer tax, the seller does not bear such taxes. For more information about the amount to be paid, please contact Freddy Miranda, at fmiranda@fgasoc.com.do.
Next, the sales agreement must be drafted. The final sales contract may be preceded by a free-look or due-diligence period, in order to allow the buyer to obtain a certification of liens and encumbrances, to inspect the improvement, to allow for the preparation and investigation by the insurance carrier, if the purchase was agreed upon condition that the property be insured.
Assurance that both parties (or the buyer) will honor their sale/purchase agreement may be obtained by executing a promise of sale. This promise of sale may be agreed to with or without a deposit. In our legislation, such deposit is called earnest money, and it may be considered as payment of part of the purchase price, or it may be kept as security for such sale. It is important to have sound legal assistance for executing a promise of sale with earnest money deposit, since various financial penalties apply in case of default. (Cf. Fgasoc.com.do, article "Promise of Sale with Earnest Money Deposit").
As mentioned above, a sale/purchase agreement is the classic contract for transferring a title deed and obtaining the warranty granted by it. The Internal Revenue Service established that the amount to be paid for transfer tax may never be based on the minimal credible value, or value assessed for property tax or luxury tax. Investors are advised to retain a good real-estate lawyer to avoid problems with the fiscal authorities.
Can transfer tax be avoided without incurring evasion? The classic ways of amortizing the weight of transfer tax are: buying shares of stock from the owning company if that were the case, and, if the property being transferred is the sole asset of such company, obtaining a loan through a savings and loans institution, and incorporating the property into the capital stock by making a contribution in kind.
Taxes are withheld on shares purchases. In the case of a savings and loans bank, the institution will charge a sum in addition to the closing value of the loan for the duration thereof. Finally, a contribution in kind is the most complex way of reducing transfer costs in a real-estate transaction. In most cases, any such contribution is subject to significant expenditures by the investor.
Upon receipt by the appropriate Recorder of Deeds, the sales contract will be duly registered and an entry to that effect will be made in the books kept for real estate transfers. The recorder of deeds or his/her deputy will formally audit the documentation to verify that it meets the requirements prescribed by law in order for a new title deed or an attesting letter to be issued guaranteeing the property. Such documentation should include, depending on the manner of transfer:
A) CONTRIBUTION IN KIND
1. A copy of the notarized declaration (attested copy).
2. A copy of the Company's Bylaws.
3. List of payments made by subscribers.
4. Minutes of the first Shareholders' Meeting, where the Contributions Officer was appointed.
5. Report of the Co
The first difference is the manner of acquisition. A real investment involves planning. The second factor is the preparation of the mechanism of acquisition—in most cases we recommend forming a company.
What type of company is recommended for purchasing real estate in the Dominican Republic, particularly in the tourist market? Can a foreigner buy shares or invest in real-estate through a company in the Dominican Republic? What is the best option to organize an investment—a Dominican company or a foreign company?
The last question is the most important. It all depends on your priorities, and above all on your interest in the investment. If it is a totally passive or enjoyment investment, the best option would be an off-shore company. Such company would become a simple shareholder. On the other hand, for an active investment, it is best to form a Dominican company, since such investment would yield rentals from a domestic source, and filing an income tax form would be mandatory.
There are no restrictions for foreigners wishing to purchase shares in the Dominican Republic, and, as regards the first question, in the case of a Dominican company, the best option is a stock company. If the formation of a foreign company is preferred, in our opinion it is imperative to form an IBC. These companies may be formed through our office. To obtain information about fees, please contact Freddy Miranda at fmiranda@fgasoc.com.do.
Let's take for example the case of an operation in the tourist market, focusing specially on the market of Casa de Campo, La Romana, on the eastern part of the Dominican Republic. In this market, the first element to consider is the construction time for the improvement and its boundaries. Then, it is advisable to verify the payment of common services, the absence of which could jeopardize the improvement, and finally the payment of property taxes which could cause a tax lien to be levied if the property purchased has an outstanding balance to the credit of the Internal Revenue Service.
Then, it is essential to make a formal examination of the title deed, particularly in the case of title deeds issued more than five years before. The ideal is to obtain a certification of liens and encumbrances from the Recorder of Deeds. In many cases, greater assurance may be obtained by means of a collateral on the property, to cover the risks.
If there is no title deed for the property, usually this type of resort has entered into a sales agreement with the buyer, which may be dissolved in order to make a direct sale to the new investor. In this case, it should be noted that in order to make the transfer, the buyer has to pay all appropriate taxes. Many unscrupulous lawyers misadvise their clients, saying that with this method there is no need to pay transfer tax, which is inexact. What is usual is for the seller to have his/her title deed so that the property may be purchased and transferred with no problems or difficulties. In practice, since the buyer has to pay transfer tax, the seller does not bear such taxes. For more information about the amount to be paid, please contact Freddy Miranda, at fmiranda@fgasoc.com.do.
Next, the sales agreement must be drafted. The final sales contract may be preceded by a free-look or due-diligence period, in order to allow the buyer to obtain a certification of liens and encumbrances, to inspect the improvement, to allow for the preparation and investigation by the insurance carrier, if the purchase was agreed upon condition that the property be insured.
Assurance that both parties (or the buyer) will honor their sale/purchase agreement may be obtained by executing a promise of sale. This promise of sale may be agreed to with or without a deposit. In our legislation, such deposit is called earnest money, and it may be considered as payment of part of the purchase price, or it may be kept as security for such sale. It is important to have sound legal assistance for executing a promise of sale with earnest money deposit, since various financial penalties apply in case of default. (Cf. Fgasoc.com.do, article "Promise of Sale with Earnest Money Deposit").
As mentioned above, a sale/purchase agreement is the classic contract for transferring a title deed and obtaining the warranty granted by it. The Internal Revenue Service established that the amount to be paid for transfer tax may never be based on the minimal credible value, or value assessed for property tax or luxury tax. Investors are advised to retain a good real-estate lawyer to avoid problems with the fiscal authorities.
Can transfer tax be avoided without incurring evasion? The classic ways of amortizing the weight of transfer tax are: buying shares of stock from the owning company if that were the case, and, if the property being transferred is the sole asset of such company, obtaining a loan through a savings and loans institution, and incorporating the property into the capital stock by making a contribution in kind.
Taxes are withheld on shares purchases. In the case of a savings and loans bank, the institution will charge a sum in addition to the closing value of the loan for the duration thereof. Finally, a contribution in kind is the most complex way of reducing transfer costs in a real-estate transaction. In most cases, any such contribution is subject to significant expenditures by the investor.
Upon receipt by the appropriate Recorder of Deeds, the sales contract will be duly registered and an entry to that effect will be made in the books kept for real estate transfers. The recorder of deeds or his/her deputy will formally audit the documentation to verify that it meets the requirements prescribed by law in order for a new title deed or an attesting letter to be issued guaranteeing the property. Such documentation should include, depending on the manner of transfer:
A) CONTRIBUTION IN KIND
1. A copy of the notarized declaration (attested copy).
2. A copy of the Company's Bylaws.
3. List of payments made by subscribers.
4. Minutes of the first Shareholders' Meeting, where the Contributions Officer was appointed.
5. Report of the Co
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