Citizenship by investment, economic citizenship, citizenship insurance- there are many names for the process of acquiring a second passport, via investment.
Nurturing your net worth, growing your business, and providing the best life for your family can be hard work. Investing in a second passport can enable you to undertake these roles with ease. A second passport can bring you peace of mind, tax optimization, increased travel potential, protection, and security. It also means you aren’t truly owned or bound to any single government. In today’s climate, this can be extremely beneficial.
If this is something that interests you, keep reading. We’ll bring you all the information you need about second passports, the application process, and countries that offering the programmes.
What is a second passport?
It is possible to hold multiple passports. Citizens can have one, two, or even three passports and therefore be citizens of multiple countries. There are several ways to go about getting additional passports that don’t require marriage, long-term residence, or naturalisation.
Over the last years, the concept of economic citizenship or citizenship by investment programmes has grown exponentially. Following the global economic downturn in the 2000s, various countries decided to attract more foreign investment to their economies. One way to do this was to offer citizenship to individuals, in return for investing in bonds, real estate, and the economy. Our world is becoming more globalised. Business now takes place across continents, not just borders and being able to travel easily is key.
If you are someone that travels a lot for work, a second passport can be a huge benefit. We cannot help where we are born, and it happens that sometimes holding the passport of our birth country can have negative implications. It can also happen that your passport includes visa stamps from a country that does not have good relations with a country you wish to travel to. People need more freedom that is not restricted by their birth nationality.
Whether you can hold multiple second passports or not, will depend on whether your native country allows it. In some cases, you may have to renounce your original citizenship should you proceed with a second passport. Just be sure to get professional advice before you start any application processes.
Benefits of getting a second passport
There are numerous benefits to having a second passport, some of which will be unique to your situation. But there are many plus points which are across the board.
Having a second passport will open many doors, quite literally, to you and your family. If you come from a country that has restrictions on movement or requires costly visas to travel, then the idea of visa-free travel is an appealing one. Most countries that offer second passports have ‘strong passports’ meaning you can travel to most countries visa-free, and reside without limitation in others. This makes travelling for business or pleasure, work, business, education, and residence a lot easier and helps you reach the status of a global citizen.
Having second citizenship won’t guarantee that you can avoid tax, but it can lessen your fiscal burden. Availing yourself of a second passport means you have the freedom to live in a tax-optimized jurisdiction. You can choose to live tax-free, or with a low tax bill by strategically purchasing the right second passport.
If you were born in a country that’s experiencing an unstable political, social, or economic climate, a second passport is a great way to protect yourself. By having a second passport, the holder can avail themselves of the protection that the alternate citizenship provides. Even if you’re not planning on moving to a new country, having a second passport in reserve can ensure you and your family are never stranded.
Holders of a ‘strong passport’ are extremely privileged. They find it easier to do business internationally, attend the best educational institutions, purchase property, make investments, open businesses, and much much more. If you were not born into this privilege, obtaining a second passport can grant you these opportunities.
Holding a second, or even third passport is not just about you and the ‘right now’, it is about the future as well. Most second citizenships can be passed down through your family. This means that second citizenship is something your descendants, and their children will benefit from. You can obtain passports for your immediate family members and be safe in the knowledge you have purchased one of the best international insurance policies available.
Where can I get a second passport?
More and more countries are starting to offer second passport programs. Noting the success of the scheme in countries such as Malta, Cyprus, and Grenada, they too want to benefit from increased investment. Of course, not all of the countries that offer their passport have particularly great benefits. Picking the right location for your application is key.
If you’re considering applying for a second passport, click on the country, or countries that interest you. In each section, you can discover detailed information on requirements, contributions, and the application process. More importantly, you can assess the benefits of each second passport to help you decide which is the one for you:
Different nationalities, different reasons
It is also worth noting that different nationalities have different reasons for seeking second passports. Here are some good examples:
Citizens of EU Member States are subject to vastly different fiscal rules. In northern and Scandinavian states, taxation is extremely high. This can be problematic for business owners and private individuals. It is also true that some EU States are going through tumultuous times with issues regarding democracy, rule of law, and justice. This can impact entrepreneurs that wish to live or operate a business there. Last but not least, some Europeans just want a warmer climate and slower pace of life that Northern and Western Europe just cannot offer!
US Citizens must pay tax in the US even if they live abroad. This means those living in another country with no US ties except citizenship are obliged to remit tax. This can result in having to pay tax twice in situations where double taxation treaties do not exist. To avoid this, they must renounce US citizenship. Having a second passport can stop this obligation as the rules of the passport country prevail when the holder is resident there. If a Maltese passport holder is living in Malta but holds US citizenship, Maltese law will be enforced, not the US.
Second passports are popular with Chinese citizens for many reasons. China’s communist government means that some are limited and restricted in the way they operate. Others wish to escape and operate in a free market. There’s also a desire for children to study abroad and be exposed to a more free way of life. This is often not possible without a second passport.
Citizens of India, Latin America, and the Middle East make up a large percentage of citizens interested in a second passport. This is due to a complex web of social, political, and economic issues. Many want to move abroad to escape political regimes or limitations, others want to explore the business opportunities that other nationalities can enjoy. Holding a second passport is integral to this and provides security, support, and opportunity in abundance.
A recent survey found that some 89% of people in the U.K. would like to own a second passport. An additional 34% said they had already looked into acquiring one. 80% said they would be happy to donate or invest 5% of their yearly income into getting a second passport, more than they spend on their monthly rental.Source: Business Insider: Second Citizenship Survey, May 2017
Ways to become a citizen
There are various ways of getting a second passport. These include birth, naturalisation, familial ties, marriage, and after being resident for a certain period. Citizenship can be awarded to anyone who makes a significant cultural or philanthropic contribution. Fast Offshore, however, deals exclusively with citizenship by investment.
- Naturalisation: this is the legal process whereby a non-citizen can acquire citizenship of a country. Naturalisation can occur either automatically after a period of time or application. Rules vary between countries but there are often minimum residence requirements. Some may also require renunciation of other citizenships.
- Familial ties: most states allow family members of citizens to acquire citizenship. This applies mainly to direct descendants, grandparents and parents.
- Marriage: marrying a citizen of a country doesn’t guarantee citizenship but some offer citizenship after a specific number of years married.
- Special circumstances: someone who’s made a difference or significantly helped the image, or economy of that country can be granted citizenship. This is an honour and is discretionary.
Anyone can apply for a second passport but not all will be approved. Second passport by investment is not a given and each state reserves the right to refuse approval.
Who can apply for a second passport?
Applicants must not have criminal convictions or ongoing criminal cases. They should also be persons of good standing and not likely to bring the country into disrepute.
When applying for citizenship by investment programmes, wealth is also a requirement. Most countries require a donation or contribution to social funds, employing local people, investment in property, or starting a business. Applicants must demonstrate they are willing and able to make a monetary contribution for the benefit of the country. They must also demonstrate that they do not need to rely on welfare or state resources to live there.
There are also requirements in terms of due diligence and know your customer. The source of wealth is analysed to in-line with anti-money laundering laws. The applicant must be able to prove they got the funds via legitimate and legal sources. Of course, the applicant must also be able to prove who they are. Identity documents are required to eliminate any cases of fraud or using names or identities that are not theirs.
While second passports are open for all to apply for, acceptance depends on a variety of criteria determined by each state. As a standard, you must be wealthy, reputable, not a criminal, able to prove who you are and be able to demonstrate that your income is legitimate.
Why some applications get declined?
Applying for a second passport doesn’t mean it will get approved. There are some reasons why it may be declined.
- Reputation: Each state has a specific department that undertakes extensive research on each application. This involves searching the media, press releases, and even social media that can point to the reputation of the applicant. Any instances of alleged wrongdoing, criminal behaviour, or reputational issues will be taken into account. This includes civil procedures and rulings, journalistic investigations, and allegations made against the applicant.
- Criminal record: As well as submitting a criminal record check, most countries will undertake their due diligence. This includes research in the media, court records, and via background checking software. Most states will also use their secret service or equivalent to conduct a thorough investigation of each applicant. This will take into account any current, previous, or pending legal action against the individual. It may also take into account civil cases that the applicant has lost, or is currently involved in. These cases are usually assessed on a case by case basis. While most states take decisions at the discretion of the Minister responsible, anyone with a criminal record would rarely be accepted.
- Financial concerns: The applicant’s financial health will also be assessed. This assessment looks at where their money came from, where it is kept, and what they plan to do with it. A state doesn’t want to end up taking money from an applicant that has come from a dubious source. All wealth must be accounted for. The state will also want to be sure the applicant has the money to support themselves and their family. They do not want to issue a second passport and then find the applicant will rely on welfare or declare bankruptcy.
There are various other reasons why a country may refuse to grant a second passport. When the application is refused, the state isn’t obliged to say why. The granting of citizenship is at the discretion of each state.
Contact Fast Offshore
Fast Offshore has developed citizenship by investment practice in several countries that offer the programme. We are familiar with the process, have a relationship with the authorities, and have assisted others in obtaining citizenship. We also have extensive business experience in these jurisdictions meaning we can help with other matters. This includes corporate services, tax, financial licensing, and more.
Fast Offshore advises ensuring you fit all of the requirements and obligations before starting the application process. Contact Us today, we’ll be happy to assist and guide you through the entire process.