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.ORDER
THE
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<>Many of our clients have asked about
possibly obtaining a legitimate and legal second passport, or about obtaining
residency for the Dominican Republic and Panama. To provide some
general information on the subject and to answer some questions, we have
prepared the following information. Keep in mind that this discussion
is mainly geared toward the US client, but some of this information certainly
applies to our non US clients as well. But before we go into specifics,
let us discuss some myths that some clients have heard.
.
<>Myth # 1
– A US citizen cannot hold dual nationality
<>
<>.
This is completely false. There
is absolutely nothing in the US constitution that prohibits a person from
holding both a US passport and that of another country. To be sure
the IRS does not like it. Neither does some other government agencies,
but it is not a violation of the law for someone to pursue second citizenship.
You will not lose your US citizenship if you obtain another passport.
In fact, for tax reasons, the US government would like to see you remain
as a US citizen (regardless of any other passport you may have) so they
have the opportunity to tax you to death regardless where in the world
you are living (we will touch upon this and other issues a little further
on).
.
Myth # 2
- The US Passport is the Best in the World
.
Well, it certainly does offer visa free
travel to many places, but it is also the most expensive passport in the
world to own. The truth is that there are plenty of other passports that
permit Visa free travel to Europe, Asia and Latin America. The ironic
thing is, the US requires visas from the citizens of almost every other
country that permits US citizens to travel to that foreign country without
one. The one notable exception is England. This was a recent
exception that came about between a deal negotiated by ex-prime minister
Margaret Thatcher and former US president Ronald Regan. This
is the only reason why British citizens are one of the few nationalities
permitted to enter the US without obtaining a visa from the US consulate
first - but even that has now gone away as well.
.
As a US passport holder, keep in mind
that the US government is one of the few governments on earth that looks
to tax it's citizens on their worldwide income. As a US citizen living
abroad, there are some tax breaks for income earned due to employment out
side the US (only up to a certain amount), but you are still liable for
US tax on dividends, interest and capital gains regardless of the source.
The meaning is that even if you have no US investments or real estate,
any capitals gains or interest earned outside the country is subject to
tax - simply because you hold the US passport. That is why it is
called, "the most expensive passport in the world to own". You will
pay plenty. In contrast to this, Canada and most European countries
do not impose such a tax on it's citizens due to the theory that if a person
is not living in the "Passport Country", then the individual is not benefitting
from services that you pay tax for in the first place. To illustrate
this further using Canada as an example. While Canada does currently
have some of the highest income and other taxes in the world, If a Canadian
citizen is living & working outside of Canada,(and has all investment
income derived from non Canadian sources), the Canadian citizen has no
tax liability to their home country.
.
<>Another potential problem with the US
passport is personal safety. Many countries and peoples of the world
do not like the US government. Regardless of whether you think US foreign
policy is right or wrong, or if people in other countries are correct in
their thinking or not, being a US citizen in some places can pose a danger
to your personal safety. I know of many Americans that pretend to
be Canadian when traveling for this reason. The point is, if
you are a passport holder from say tiny Andorra, Belize, Canada, or any
number of other "quiet" countries, you are less at risk. As
an American, you are a scapegoat for your government's policies.
.
Myth # 3
– It is expensive and difficult to obtain a
second citizenship
.
Many countries offer differrent type
of legal and government sacntioned economic citizenship programs.
Other countries that may not have such formalized programs, do offer a
realtively simple process for obtaining residency and becoming nationalized. It really comes down to how quickly you
wish to obtain your residency and also your finances. Most governments
that do offer these type of instant citizenship programs usually require
what amounts to a donation to the country in the neighborhood of US$85,000
and up. Once
approved, you normally obtain your new passport and citizenship documents
within 30 days. The advantage to this is of course the expediency.
.
If you are willing to wait, both the
Dominican Republic and Panama both have a very cost effective process for
obtaining permanent residency and an eventual passport, although the process in the Dominican Republic is much easier and much quicker of the two.
.
Residency
and a Passport from The Dominican Republic
.
While the Dominican Republic does not
have an formal economic citizenship program, it does have an very inexpensive
and simple process for both permanent residency and citizenship.
For the cost involved, and the waiting period for a passport in comparison
to other countries, we think it is one of the most economical ways to obtain
a very legal and official second passport.
.
In the past, the Dominican Republic has
taken a somewhat "laissez-faire" attitude towards tourists that overstayed
their tourist visa. We know of many Americans and Canadians that
have lived in the Dominican Republic without official residency for many
years. Under current guidelines, if a tourist overstays by one day
or ten years, the fine is the same, 100 pesos or about US$6. The
logic is that if you are a tourist spending money and are not taking away
employment from a dominican, then live and let live. While this may sound like an argument
against residency, it is not. The Dominican government has also recently
cracked down on foreigners that started small tourist oriented businesses
without residency. Many have been deported, leaving a thriving business
behind. Remember, a tourist visa gives you the right to be a tourist,
it does not give you the right to work or own a business. The entire
residency and related passport process is easy , inexpensive, and a must
if you wish to establish a business or work. The Dominican government
also permits dual citizenship, so you will not have to renounce your current
passport in the process.
.
<>This
is one of the best and easiet ways to obtain a legal
and legitimate Second Passport:
.
All
for under $12,500 Total Cost over 3 Years in
Attorney & Filing fees
.
Some of the
Requirements
.
Clients are advised to obtain 5 certified
or offical copies of thier birth certificate prior to their arrival in
Santo Domingo. You will not need all five copies, but it is a good
idea. Depending upon where you live and your local government office
or health department, this may cost anywhere from $5 to $15 per official
copy. It is also highly suggested that a letter
of good conduct from your local police department be obtained. While
we have assisted clients that did not posess such a reference letter, it
is a good idea to have a document indicating up-front that you do not have
a criminal record in your home country. This helps with your own
credibility. A to "whom it may concern"
letter stating your lack of a criminal record is sufficient. Clients will also be required to take
a general physical, chest x-ray and aids test, which is quick and inexpensive.
.
Upon initial completion of all paperwork for the first part of the process (residency), and
aproval, the client will receive a provisional residence card. This
process can take anywhere from 60 to 90 days. This card is valid
for one year. Once ovtained, you will have the right to live and work in the Dominican Republic.
You will also have the right to leave the country whenever you wish and
re-enter with your temporary residence document (you will not need a tourist
card or toursit visa to re-enter).
.
Also, at the same time you residency card is issued from immigration, you will receive your official residence card or "Cedula",
which is valid
for one year. Upon completion
of that initial one year period, you will re-new your residence status
and have it upgraded to Permanent Residency. Upon completion of
this second period, you can become
formally nationalized and obtain your Dominican Passport. All
told,
you would have obtained the immediate right to live and work in the
Dominican
Republic (or own a business), with a legititmate and official
government
issued passport after about 2 1/2 years from the date you
started.
All told, for under $12,500 in total costs spread out or broken up over
this same 2 plus year period, it is a very good deal for a very legal
and valid passport.
.
Residency
and a Passport from Panama
.
Unlike the Dominican Republic, Panama
has quite a number of formal and official programs. Unlike the Dominican
Republic, Panama is also much stricter about visas and related issues. Since there are too many programs to
discuss here, we will narrow our article to the two programs most commonly
used by our clients.
.
The Small Businessman or Small
Investor's Program
.
This program basically is most applicable
to someone that wishes to have some sort of business in Panama. The
fact that it may be a very public business, such as a resturant or
convenience store, or a service business run out of your home is irrelevant.
The process and paperwork is the same. The main thrust of this program is to
generate employment for local Panamanians, so you are required to have
a minmum of three Panamanian employees. If it is a small home based
bsuiness, the quoata can be achieved by including your maid, driver, messenger
or secretary. I do not want to start a discussion about the local
wage scale, but keep in mind that your monthly payroll for all three will
be $2,000 or less.
.
You are also required to prove a minimum
investment of $50,000 or more. We usually help the client
achieve this through the formation of a Panamanian Incorporated company.
The investment is somewhat open ended, meaning that computer equipment,
office furniture and related items required for your business can be included.
.
Like some other programs, permanent residency
is obtained fairly quickly, with the passport application to follow within
five years of the initial process. While this program does not grant
an immediate passport, it does provide for permanent residency status and
is a good way to tie in the residency process if your goal is some sort
of business in Panama.
.
The one thing that investors should be
aware of is the extensive paperwork involved with this type of program.
While it allows for a much lower investment than some other programs, the
legal fees will be higher to correspondent to the filings involved.
.
< style="color: rgb(255, 0, 0);">The Self Sufficient
Investor
<>(or what we like
to simply call the
<>$200,00 Bank Deposit
Program)
.
This program is probably one of the
simplest and most straight forward programs that Panama offers.
While there is still a waiting period for
the passport application process (five years from residency), this program allows the
client to have access to their tax free bank account interest monthly
and later on use the funds for whatever the client wishes. In other
words, unlike some other instant citizenship programs, the client is not
giving their money to the local government. <>The program simply involves that the
client establish a time deposit or "Plaza Fijo" in the amount of
US$200,000 or more with a local banking instiution. Since most banks
in Panama offer a CD deposit normally no longer than 18 months, the client
would establish a time deposit for this length of time (and of course renew
the CD or explore other investment options t that time).
.
The main concern of the government is
that the applicant has the ability to support him or herself. This
of course is to make sure that the applicant will not be taking away employment
from a Panamanian or will become a social burden. With this type
of bank deposit, the applicant is proving that they have sufficient funds
to live on. With proof of your CD or "plaza Fijo" deposit and a minimum
of related paperwork, the client has the opportunity to obtain pernanent
residency in Panama, with the right to apply for a Panamanian passport
later on.
.
Please feel free to contact us, and ask about the number of our clients that have gone through these processes successfully
- Clients who travel and conduct business or investments as a citizen
of somewhere other than a high tax draconian country.
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