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Why are some people renouncing US Citizenship?
Is it legal?   Is Dual Citizenship permissible?
Why seek a second nationality?

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Will you loose your current citizenship if you obtain another?  Are there in fact any benefits by having dual citizenship?
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We put together some information for you in order to answer these and many other related questions.  The truth of the matter is, it is not a question of should you - but rather why you might
need dual citizenship going forward.
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second passport, dual citizenship
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Possibly you have made up your mind to live in another country - to expatriate as it were.  Maybe you are just thinking about it.  Regardless, there certainly are some myths and falsehoods floating around - especially among Americans principally when it comes to matters related to Expatriation, Residency in your new country and Dual Citizenship as well.
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First off, the topic of expatriation - The Merriam-Webster Dictionary defines it as follows:  Medieval Latin expatriatus, past participle of expatriare to leave one's own country - 1: to withdraw (oneself) from residence in or allegiance to one's native country, 2: to leave one's native country to live elsewhere; also to renounce allegiance to one's native country. 
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In other words, the term expatriate could refer to someone that simply has decided to live in another country or it could refer to someone that has decided to renounce previous citizenship as well.  Both definitions apply.  So, for example, you are an expatriate if you are an American that decided to retire to say Ecuador, or where ever else for that matter, but of course maintain your existing citizenship as well.  Simply moving to another country does not mean you loose your existing citizenship, just as obtaining legal residency status in your new country does not jeopardize your existing nationality or citizenship either (more on this in a moment).  So, becoming an expatriate does not mean you are a criminal or some kind of anti-patriotic malcontent - nor does it mean that you have necessarily renounced or relinquished your previous citizenship either (although this is something you could do as well).  It simply could be that you decided to live in Thailand or the Dominican Republic, for example, because in such places you can live very well on your US$1,500 per month pension (whereas this is near impossible in many parts of the US or Europe).  Some people do of course take it a step further, and seek to become a citizen of their new country as well.  But again, dual citizenship is recognized and perfectly LEGAL in most countries, including the US.  However, choosing a country because of residency and or citizenship requirements can be just as important of a factor as climate, real estate prices, and so on.  Important because perhaps the requirements are too restrictive for you, too costly in terms of real estate purchase or other kinds of investment - or perhaps not - as the case may be.
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So, let us discuss residency first and then move on to dual citizenship as the next progression thereafter.  It is important to note that in your new country, one should obey the local laws and adhere to whatever legal requirements might exist.  In terms of immigration or residency matters, each country of course has their own set of rules and requirements.  In fact, this alone may be an important point to decide where you wish to live as well.  For example, in places such as the Turks and Ciacos Islands, in order to qualify for residency status, one must demonstrate a fairly expensive home purchase and or investment.  This is true also for the Bahamas, and a number of other destinations as well.  So, as an illustration, if you are not prepared to spend say US$250,000 for a second home - then that may eliminate such jurisdictions from the list of consideration.  Also, keep in mind that in can be almost impossible to obtain naturalization (ability to become a citizen) in the Turks and Caicos, so you must remain with residency status alone (and are subject to the whims of local government if they want to renew your residency status or not, and if not - you have a problem, especially after spending a considerable amount of money on a home purchase).  This was the very recent case in the Turks and Caicos, whereby many foreigners were forced to leave simply because the local political tide turned against them (and renewal of residency status refused).
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In contrast, countries such as the Dominican Republic have a fairly simple and straight-forward process for obtaining residency, and the requirement is that an applicant demonstrate assets or investments equal to RD$500,000 Pesos, which is about US$16,000 under current exchange rates.  So, doing something as simple as establishing a US Dollar Bank Certificate of Deposit (with a local bank) for a very affordable monetary amount will allow you to qualify.  In addition, one can become a naturalized citizen within a fairly short period of time (in comparison to other countries) after having achieved Permanent Resident status.  Panama allows for a fairly simple process if one establishes a bank deposit for US$200,000 and so it goes it many other jurisdictions as well (although the naturalization process is much quicker in the Dominican Republic than it is Panama, if this is an end goal).
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Naturalization in your new country, whether you decide to maintain dual citizenship (have two citizenships and thus two passports) or relinquish your previous one is often a natural progression for some people, but certainly not all.  However, in today's climate both in Europe and in the US, many people decide 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.
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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, or a Costa Rican, etc. 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.
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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.  For example, if you visit the following US State Department Web Site, you will find the information reprinted below:
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DUAL NATIONALITY FOR US CITIZENS
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Dual nationality can occur as the result of a variety of circumstances. The automatic acquisition or retention of a foreign nationality, acquired, for example, by birth in a foreign country or through an alien parent, does not affect U.S. citizenship. It is prudent, however, to check with authorities of the other country to see if dual nationality is permissible under local law. Dual nationality can also occur when a person is naturalized in a foreign state without intending to relinquish U.S. nationality and is thereafter found not to have lost U.S. citizenship the individual consequently may possess dual nationality. While recognizing the existence of dual nationality and permitting Americans to have other nationalities, the U.S. Government does not endorse dual nationality as a matter of policy because of the problems which it may cause. Claims of other countries upon dual-national U.S. citizens often place them in situations where their obligation to one country are in conflict with the laws of the other. In addition, their dual nationality may hamper efforts to provide U.S. diplomatic and consular protection to them when they are abroad.
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http://travel.state.gov/law/citizenship/citizenship_778.html
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Dual Nationality
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The concept of dual nationality means that a person is a citizen of two countries at the same time. Each country has its own citizenship laws based on its own policy.Persons may have dual nationality by automatic operation of different laws rather than by choice. For example, a child born in a foreign country to U.S. citizen parents may be both a U.S. citizen and a citizen of the country of birth.  A U.S. citizen may acquire foreign citizenship by marriage, or a person naturalized as a U.S. citizen may not lose the citizenship of the country of birth.U.S. law does not mention dual nationality or require a person to choose one citizenship or another. Also, a person who is automatically granted another citizenship does not risk losing U.S. citizenship. However, a person who acquires a foreign citizenship by applying for it may lose U.S. citizenship. In order to lose U.S. citizenship, the law requires that the person must apply for the foreign citizenship voluntarily, by free choice, and with the intention to give up U.S. citizenship.
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Intent can be shown by the person's statements or conduct.The U.S. Government recognizes that dual nationality exists but does not encourage it as a matter of policy because of the problems it may cause. Claims of other countries on dual national U.S. citizens may conflict with U.S. law, and dual nationality may limit U.S. Government efforts to assist citizens abroad. The country where a dual national is located generally has a stronger claim to that person's allegiance.  However, dual nationals owe allegiance to both the United States and the foreign country. They are required to obey the laws of both countries. Either country has the right to enforce its laws, particularly if the person later travels there.Most U.S. citizens, including dual nationals, must use a U.S. passport to enter and leave the United States. Dual nationals may also be required by the foreign country to use its passport to enter and leave that country. Use of the foreign passport does not endanger U.S. citizenship.Most countries permit a person to renounce or otherwise lose citizenship.
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Information on losing foreign citizenship can be obtained from the foreign country's embassy and consulates in the United States. Americans can renounce U.S. citizenship in the proper form at U.S. embassies and consulates abroad.
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http://travel.state.gov/travel/cis_pa_tw/cis/cis_1753.html
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ADMINISTRATIVE STANDARD OF EVIDENCE
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As already noted, the actions listed above can cause loss of U.S. citizenship only if performed voluntarily and with the intention of relinquishing U.S. citizenship. The Department has a uniform administrative standard of evidence based on the premise that U.S. citizens intend to retain United States citizenship when they obtain naturalization in a foreign state, subscribe to routine declarations of allegiance to a foreign state, or accept non-policy level employment with a foreign government.
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DISPOSITION OF CASES WHEN ADMINISTRATIVE PREMISE IS APPLICABLE
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In light of the administrative premise discussed above, a person who:   (1) is naturalized in a foreign country; (2) takes a routine oath of allegiance or(3) accepts non-policy level employment with a foreign government and in so doing wishes to retain U.S. citizenship need not submit prior to the commission of a potentially expatriating act a statement or evidence of his or her intent to retain U.S. citizenship since such an intent will be presumed.
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When, as the result of an individual's inquiry or an individual's application for registration or a passport it comes to the attention of a U.S. consular officer that a U.S. citizen has performed an act made potentially expatriating by Sections 349(a)(1), 349(a)(2), 349(a)(3) or 349(a)(4), the consular officer will simply ask the applicant if there was intent to relinquish U.S. citizenship when performing the act. If the answer is no, the consular officer will certify that it was not the person's intent to relinquish U.S. citizenship and, consequently, find that the person has retained U.S. citizenship.
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http://travel.state.gov/law/citizenship/citizenship_778.html
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In summary, dual citizenship is perfectly legal if you are a US Citizen - Now You Know.  In addition, it is perfectly legal and accepted if you are a citizen of a large list of other countries as well.
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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.
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WHY BECOME A DUAL CITIZEN or RENOUNCE CITIZENSHIP ?
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Many people will decide to become dual citizens, which is to say seek out a second citizenship - second passport, for a variety of reasons.  In conjunction, many people might also to take the further step of renouncing previous citizenship as well.   The question of course is why?
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Well, for some it just might be a matter of convenience.  Meaning, perhaps you may wish to seek out another travel document that might offer easier or more visa free travel options than the passport you currently carry.  For others it may be a question of safety.  Many Americans for example, would often prefer to travel as a national of some other country depending upon the part of the world they are going to.  Last, but not least, we come to the issue of banking and investing.
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Americans especially will often find it very difficult to bank or invest outside of the US, as a US Citizen.  This is not because it is in any way illegal for US Citizens to have banking or investment accounts abroad, and neither is it illegal in the country where the person is trying to establish an account.  The problem has to do with reporting, at least from the perspective of the US Tax Authorities.  Stated more clearly, many countries have laws in place porhibiting the release of account holder information to anyone (other than by local court order) or bank - investment account interest may simply be tax-free in that jurisdiction.  As a result there may not be any reporting to the local government (since there is no tax and thus no reason to report), never mind a foreign government no less.  However, this has not stopped the US Tax Authorities from pressuring foreign governments and foreign financial insitutions to turn over account information regarding US citizens who may be banking or investing (for tax related purposes).  Because of these pressures, many financial insitutions view the annoyance not worth the bother and will often not accept US citizens as account holders for this reason (and for none other).   However, being able to provide proof of residency outside of the US, and even better, non US citizenship - may make the difference of being welcomed or not.
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