More than dozens of countries across the world offer a possibility of obtaining their citizenship and second passports to foreign investors through citizenship by investment programs. Immigration experts and wealth management professionals argue that second passports have become an efficient tool for enhancing international mobility, securing future insurance policy in times of turmoil, or just diversifying wealth portfolios. Perks, which alternative citizenship and passport bring, are in most cases intangible but with a high value.
Citizenship by investment programs is very popular in the Gulf region. Actually, Dubai is the center of the investment migration industry, hosting the headquarters of all major immigration and law firms. Besides, the overwhelming majority, more than 88 percentage of Dubai’s population, are ex-pats. Beneficiaries of these programs are mostly from Chine, the Gulf, and the Middle East countries. Although, according to the recent media reports citing data from the investment migration companies, the number of US citizens interested to obtain alternative citizenship and a second passport is increasing. This trend has emerged after the Covid-19 pandemic caused global lockdowns and travel restrictions. African, especially Nigerian and South African high-net-worth individuals, are also applying to the citizenship by investment programs. They found the Caribbean countries, with such programs very attractive, due to their relatively low price compared to the European citizenship by investment programs.
There are five Caribbean countries operating citizenship by investment programs: St. Kitts & Nevis, Antigua & Barbuda, St. Lucia, Grenada, and the Commonwealth of Dominica. The minimum investment requirements of these programs start from USD 100-150 thousand, while, for instance, in Malta, it stands at around EUR 700,000, and in Austria, which officially has not imposed a threshold on its citizenship by investment scheme, it is, generally around EUR 20 million. There are cheaper European programs in North Macedonia and Montenegro as well, and the passports values from these Balkan countries will tremendously increase once they join the European Union, which is expected by 2025.
There is no doubt that a second passport is a formidable asset, and most people who apply for citizenship by investment programs fully realize the benefits it can bring to them. But what are the most common misconceptions about second passports? Here, let’s review the nine most frequently met myths about second citizenship and the second passport, which are suggested by Andrew Henderson, the founder of immigration and international tax consultancy the Nomad Capitalist
1. You Have To Live In A Country For A Long Period Of Time To Obtain A Second Passport
This misconception is partially derived from countries’ citizenship laws, which require a long period of physical living in the country, plus some other criteria, like knowing the language, culture, or history, in order to obtain citizenship.
However, countries with citizenship by investment programs offer second passports in a very short period of time, and if you apply to the Caribbean programs, you even do not have to travel there successfully to accomplish the application process. Moreover, individuals are not able directly to apply and have to use the services provided by Authorized Agents – legal entities empowered by the government to submit the citizenship by investment application and promote the program internationally. For instance, in St Kitts & Nevis, you can obtain a second passport in just 60 days through the Accelerated Application Process. Generally, it required several months to obtain a second passport from the Caribbean.
The waiting time for a Maltese passport has become at least 12 months, and applicants need to maintain a residence status in Malta for that period, which requires actual spending of at least 7 days on the island.
Immigration experts suggest that in order to get a second passport from the desired country, you should first establish a second residence there.
2. Canada Has a Citizenship by Investment Program
Canada accepts thousands of immigrants each year, and many immigration programs are in place, which helps foreigners to obtain a residency there. But it is very complicated to get Canadian citizenship; successful applicants of Canadian immigration programs need to physically live in Canada for 75 percent or more of the time after they receive residency. Hence, Canadian programs are residence and not economic citizenship programs, and residency by investment programs do not guarantee that citizenship will be automatically granted, and you will have to comply with a certain set of requirements. Foreigners can claim Canadian citizenship only through naturalization.
Citizenship by investment programs do not require applicants physically to reside in the country.
3. Obtain A Second Passport Is All About Ease of Travel
A second citizenship is not just a piece of paper. This document can help you travel easier – it’s a reliable backup plan and investment into your future, notes Andrew Henderson.
Along with ease of travel, a second passport is a tool to diversify your portfolio. It allows to expand business internationally and access alternative banking services. Alternative citizenship also helps to reduce your tax burden. But the most important benefit of having a second passport is so-called ‘Plan B’ – some kind of insurance policy for you and your family members, useable in turbulent times. By obtaining a second passport, you create a backup plan to protect yourself and your assets from whatever comes down the pike: lack of freedom of movement, capital controls, high taxes, etc., notes Henderson.
4. You Will Be Looked Down Upon for Having a Second Passport
According to Henderson, nobody cares too much about your passport(s) as long as you obtain them legally. Someone can accuse those who obtain a second passport of ‘unpatriotic’ moves, but all countries with citizenship by investment programs allow dual citizenship, and applicants are not required to relinquish their original nationality.
5. An American Passport Is the Most Valuable Passport in the World
According to the Nomad Passport Index, the most powerful passport is Swedish, and the real power of the American passport is much weaker than the official propaganda draws it. It is a valuable travel document for sure, but it limits your investment opportunities a lot, notes Henderson and underlines that in certain circumstances, being an American passport holder embodies additional risks and challenges, like in the case of terrorist attacks.
Other passport rankings claim that Japan, Singapore, Germany, or Belgium have the most valuable passports, and the US passport should be on the tenth or twentieth places, thinks Henderson.
6. Having a Second Passport Is About Being a Criminal or Scamming People
Having a second passport is absolutely legal if your country allows dual citizenship. It is fully legal, and it helps you to increase your international diversification and minimize sovereign risk, says Henderson and underlines that it is not necessary to advertise your newly obtained second passport, though there will be times when you may have to disclose it to certain agencies. Having a second passport is a legal escape hatch that allows you to leave your own country when the stakes get too high.
7. Only ‘Banana Republics’ Issue Second Passports
Many developed countries run citizenship or residency by investment programs. Malta is an EU member, and it has one of the highest GDP per capita in the world. Turkey is a member of the G20 and one of the regional economic and political power. North Macedonia and Montenegro, as said, are supposed to join the EU by 2025. These countries are not definitely ‘Banana Republics.’
As per countries with a residency by investment programs, Portugal offers a clear path to citizenship to its ‘golden visa’ holders after 6 years of residency. Practically, all countries allow citizenship by naturalization for legal residents.
8. Every Country Will Naturalize You
Some of the countries are not welcoming foreigners from specific countries, and it is almost impossible for specific nationalities to obtain citizenship in the precise countries. Many countries in Asia and Africa do not naturalize foreigners at all, notes Henderson.
9. I Can’t Be a Dual Citizen
Each applicant to the citizenship by investment programs should get detailed information about the citizenship laws of their original country. The US and most western countries permit dual citizenship. Most countries, allow it, and more have begun to accept it as globalization has forced its way into how and where we all live, says Henderson.
But there will probably always be some countries like Singapore, which does not allow foreigners to get citizenship through naturalization unless they officially relinquish all other citizenships.