Why a second passport?
people think of a passport only as a document you use in
order to travel abroad. However, once you start
doing other things, such as trying to establish bank
accounts or become involved with other kinds of business
matters, then at that point it becomes an important
identification document. With that said, the real
question is: Are you treated any differently
depending upon the particular passport that you
hold? The answer is a resounding YES, especially when it
comes to banking and investment matters, or more clearly
stated when you attempt to open a foreign bank account,
especially if your only passport these days is a US
passport. However, ramifications exist also for
employment and business opportunities as well, and this is
something many people do not think about. Many US
Citizens have missed out on job or employment
opportunities because they did not have a second passport,
or something other than the US Passport to show. In
addition, while it may sound somewhat extreme, having a
different citizenship can get you out of a problem, in
certain circumstances when you are abroad.
When you think about everything
else you do to make sure you have other options, the idea
of a another passport or citizenship does make perfect
sense. For example, how many people carry both a
visa credit card and an American Express credit card, just
in case one or the other is not accepted where ever you
may be going? Some people even have two different
cell phones with two different carriers just in case one
of the two gives them no phone service in certain
areas. And so why would you not want to make sure
you have the ability to travel and conduct business, not
to mention make an escape from danger if it came down to
that. Having a second passport is in a way like
having the same kind of backup when you carry more than
one credit card, or more than one cell phone
firm has been assisting clients with residency and dual
citizenship for what will be close to two decades now.
And in all of that time, we have come to realize that
clients all have different reasons for seeking out a second
passport. The common idea or theme often promoted by
the main stream press in the United States regarding people
that seek out another nationality is that they are doing so
solely for tax reasons. While there certainly may be
tax benefits (all depending upon which country you might
choose to apply, in terms of obtaining another citizenship
and passport), the truth of the matter is that there really
are a number of reasons which happen to include employment
or investment opportunities, plus safety of travel in some
cases as well.
In terms of US citizens, many people do not realize that the US authorities have been pressuring non US companies that might have US citizens working for them to start remitting payment for FICA taxes, which pertain to Social Security contributions and the like. Ironically though, US citizens living and working abroad are tax exempt if their salary or employment compensation n does not exceed US$97,600 (in 2014). However, even though there may not be a tax liability per say on the foreign earned salary, the US now has been putting the pressure on for the Social Security contributions. Because of this, many foreign companies will prefer not to hire US citizens and save themselves both money and headaches. And with an estimated 6 to 8 Million US citizens living abroad in 160 different countries, there are a large number of people effected by this. We know of two clients specifically that were living and working abroad, who were told by their employer to either get another passport or get lost. So, here is a perfect example of how having the wrong passport could cost your current job or possibly motivate a potential employer to not hire you in the first place.
you decide to maintain dual citizenship (have more than one
citizenship and thus two passports) or relinquish your
previous one is a decision you alone must make. But,
the idea of renouncing your current or previous citizenship
cab be a natural progression for some people, but certainly
not all. Indeed, if you have been keeping abreast of
the news over the past 18 months you will note that US
Citizens are now renouncing citizenship in record and
unprecedented numbers. However, in today's climate
both in Europe and in the US, many people have decided to
obtain another citizenship out of investment
necessity. To explain further, any American that has
attempted to open a banking or investment account in
Switzerland and a host of other jurisdictions, will find the
door closed to them simply because they are American.
Is it somehow illegal for an American to open a bank or
investment account abroad? Not at all, and neither is
there any law or regulation prohibiting a bank in say
Ireland, Switzerland, Liechtenstein, etc. to accept an
American client either. They simply will not do so,
because they feel it is more hassle than worthwhile (hassle
and aggravation from the American IRS to name just
one). It is interesting to note that for Americans, as
just stated, a foreign account is perfectly legal - IF you
can find a bank or broker to take you on as a customer
(which is actually the latest problem). For Europeans
of course, the prospect of existing and future problems has
motivated people from many of the EU countries to seek
another non EU passport. Many Greek and Spanish
Citizens for example are currently in the process of seeking
out another citizenship for themselves. Why?
Aside from the current economic crisis and possibly the
ability to seek work in another country of their choice, the
fear of course is the COST of all the various government
bail-outs and initiatives. To clarify further, the
politicians in these countries talk a good game about saving
the economy via tax payer funded measures for the private
banking and other sectors, but they fail to concretely
explain where the money is going to come from. The
answer is those citizens and business owners that are still
solvent or have some savings left to confiscate.
Being able to bank, invest or do simply conduct business as
a citizen from someplace else (some other country) can mean
the difference of surviving foolish policies - or NOT.
Europeans also have a problem in countries such as Switzerland now that the European Union has gone into full force, and has recently started pressuring tax reporting (and tax collection) when a citizen from one EU nation has an account in another. Switzerland is not a member of the EU, but they have certainly been feeling the heat. So, many Europeans as well are interested to become a citizen of Brazil, Costa Rica, where ever - simply for banking purposes also. But banking or investing is not the only reason one might consider a dual nationality. Travel is another concern, all depending upon what former country you come from. To be sure, I know of many people that would prefer to travel as a Dominican rather than their previous nation of citizenship (always better to be from some peaceful country not involved in politics or war elsewhere). Of course the reasons for seeking dual nationality or dual citizenship do not stop there. Some countries for example have more favorable tax legislation when it comes to inheritance matters. Many others do NOT tax its citizens on interest or earnings from outside the country as well, so there are indeed many reasons on a personal level for someone to have an interest in this topic.
One of the most troublesome things about the topic of dual citizenship (and residency also) is the lack of knowledge most people have. Which is to say, they often rely upon rumor, innuendo or simply bad information to formulate an opinion. Many Americans especially are ill informed. However, as the so-called wealthy, industrialized welfare states find themselves mired in banking problems that have resulted in tax-payer funded bailouts, national or government debt surpassing 100 percent of annual GDP, and probably worse of all - unfunded or underfunded social welfare obligations (including national government run pension programs, such as Social Security in the US) - - - The result of all that has been a growing number of middle class people that are leaving (with their money if possible). The political backlash to this phenomena of course has been tirades and legislation aimed at either taxing such persons before they leave with their cash (they could care less if you leave, they just want your money), or threats against citizenship status as well. So, it may very well be the case that your hand is forced to renounce your previous (or current) citizenship not because you want to, but because you are left with no other choice (for survival). In any event, the question remains: Do you become a legal resident of your new country or do you eventually become a citizen? That is entirely up to you, and certainly a very personal decision for each individual. But, the important point is, investigate the TRUTH and know the facts regardless of what you decide.
Obtaining A Second Passport - But From What Country?
In terms of your passport or citizenship profile, we would tend to suggest it is always best to be from a small innocuous nation not involved in any kind of nonsense such as public political criticism of other countries, economic sanctions, trade or currency wars, or of course the very blatant military action here or there. Coming from a country that does not bother anyone, that does not criticize anyone and just has a live and let live philosophy in terms of it's foreign policy relationships is always going to be better for you, as a citizen from that country doing business. This may sound a bit petty or you may think someone in another country should not care, but the truth of the matter is that politics usually involves emotional issues of one kind or another whereas business is business. But, the politics often prevails. And one very blatant example of this is the fairly new FATCA reporting issue that foreign nations are being pressured to accept at the behest of the US Government. Why would any foreign nation want to or need to act as a reporting or even a collection agent for another. Surely if a small country, such as Greece for example, asked the US Government to start collecting and remitting taxes to Greece from inside the US for either Greek legal residents in the US or naturalized citizens that may also still hold Greek citizenship - the US Government would scoff at the idea. And yet, the US Government expects foreign nations to basically do the same, or at least manage a new and costly reporting bureaucracy on their behalf. We are not attempting to go off topic, but simply to highlight the fact that government policies (and tax policy) are often a direct function of politics and you could be caught in the middle simply because you might have a citizenship or passport you have by circumstance (you were born in one country instead of another, of no control or fault of your own). But, you can remedy that situation by acquiring another or second passport for yourself.
With that said, there are a number of options all depending upon your own circumstances, net worth, time factor and so on. For example, there are some countries that might make you wait anywhere from 7 to 10 years (on average) once you have acquired and maintained residency, before you will be permitted to apply for naturalized citizenship. In other countries, there are offers for what is often called Economic Citizenship whereby you basically make a cash contribution (a nice way of saying payment) leading to citizenship perhaps in 3 to 6 months (all depending upon how fast the bureaucracy moves). However that can be out of reach for some people or simply not worth it regardless. Cyprus recently offered such a deal now in 2014, with the payment being 1.5 Million Euros (that's a lot of feta cheese). St.Kitts offers a so called instant economic citizenship program whereby the fork over is about US$100,000 or you can purchase real estate for at least US$350,000 plus you pay the legal and processing fees for the citizenship regardless. The only problem there is that only one real estate project at a time is on the government list to qualify and it usually involves some kind of shoe boxed sized condo. While the Dominican Republic recently did change the waiting time for ordinary residency status holders in terms of the time line to apply for citizenship (it is now 7 years IF you have ordinary residency status), there still is a special program for qualified investors who can apply for citizenship after 6 months. And real estate can be a qualifier with no specific set amount indicated regarding purchase price, nor with any forced purchase of a local building project the government wants to get rid of (as in St. Kitts). So, in the Dominican Republic, you buy what you want, where you want. Regardless, the point is that there are a number of options out there, all depending upon which country and which process might suit you the best.