Citizenship is defined as the relationship between an individual and a nation state, whereby the state grants certain rights such as the right to own property, work, and vote. In return, the citizen accepts the responsibility of upholding the customs and laws of the state.
Traditionally, you acquire citizenship and the corresponding passports by birth, naturalization, and marriage. However, investment in the host country is yet another way of acquiring citizenship since 1984.
Citizenship by investment refers to the process of obtaining a second passport by investing in the economy of a specific country. Citizenship by investment programs confer citizenship status faster than the immigration processes.
Countries offer citizenship by investment programs to attract foreign direct investments. These funds can then be used to invest in local or nationwide projects like real estate and business development and job creation. Such programs also attract global know-how and talent that will boost the economy in the long run.
An example of a citizenship by investment program is Canada’s Immigrant Investor Program, which aims to have experienced business people contribute to the host country’s growth and long-term prosperity.
Regardless of how you acquire second citizenship, the decision remains to be a wise and useful one.
Reasons to Invest in Second Citizenship
Doug Casey said that spreading your political risk beyond the jurisdiction is the most important reason for acquiring a second citizenship. This is because you are no longer dependent on the whims of any single government.
Here are six top reasons why everyone needs a second passport.
1.More VISA-free travel
Applying for VISA prior to a trip is really a hassle. It is time-consuming, frustrating and costly too. If you have a US passport and would like to travel to Argentina, Chile and Brazil, you will have to pay a VISA fee of about $150 USD.
On the other hand, Finnish and Swedish passports offer VISA-free travel to most countries. Meanwhile, an Afghanistan passport is said to be one of the least useful.
2.Preempt Travel/People Control
A second passport would come in handy when your government needs more soldiers of war, or if other types of people controls are implemented.
Take for example Syria. The Syrian government once refused to renew the passports of their citizens living abroad who are suspected of being associated with the opposition.
Any government, not just Syria, can revoke the citizenship and/or the passports of its citizens at anytime especially if you hold political views that are contrary to your home government. In this case, it is important to have the political diversification that comes from having a second passport.
3.More Internationalization Options
A second citizenship allows you to travel, invest, bank, reside and do business in new places that you were previously unable to. As a result, you get more freedom and opportunity.
If you’re an American, the ever-growing pile of regulations, brokerages and foreign banks will make it hard to make logical business decisions. Opening a foreign financial account as an American citizen will therefore range from impossible to very difficult.
These regulations are actually soft forms of capital controls, which will probably turn into overt capital controls later on.
4.Avoid Foreign Policy Blowback
You could become a target of international backlash should your own government form the bad habit of sticking its nose in the internal affairs of other nations.
If you want to renounce your citizenship, you will need a second passport. This way, you can be free of the inescapable tax policies of your home country.
The US has what is called as the “exit tax”, which takes into effect if you decide to renounce your citizenship and you meet certain conditions. Of course, you don’t have to result in renunciation because there are many other ways to internationalize.
6.You Don’t Have to Live Like a Refugee
Having a second passport ensures that you will have somewhere to go and one that you could potentially call a home, where you can legally have the right to work and live.
Valuing a Second Passport
As mentioned, not all second passports have the same value. For example, a second passport from Austria is the fourth most valuable travel document and the most valuable second passport that you can possibly have. This is because it gives you VISA-free access to over 171 countries.
Hence, a second passport from Austria falls under the category of a group 4 travel document. A group 1 passport, on the other hand, gives you VISA-free access to 174 countries, and it is issued by the US, UK and Germany. A group 2 passport gives you VISA-free access to 173 countries including Canada. A group 3 passport allow you VISA-free travel to 172 countries and it is issued by the Netherlands and Belgium.
Remember that the number of VISA-free travel countries you make will give an indication of how your new passport will be received by the World Bank. For example, if you have an EU passport, then you will be allowed to open an account anywhere in the world.
If you are planning on going global and getting a second passport, you should not fall for scammers offering their services *almost* free. Only trust expert internationalization architects.