What Makes EU and US Citizens Invest in Second Passports
European and North American citizens are recognised to have the ‘most powerful’ passports based on a number of countries they can visit without a visa. At the same time, a sizable number of the ‘Golden Billion’ individuals are joining the Citizenship-by-Investment Programmes (CIP) offered by third countries. Granted an opportunity of free global travel by their first citizenship, why would they be looking elsewhere?
To answer the question, let’s make some introductory statements. The Caribbean passport holders now enjoy visa-free entry to the EU, and this privilege is here to stay. The EU officials realise that CIP programme members, or plainly HNWIs, are a low-risk and high revenue group that should be encouraged to visit and spend money in Europe.
That said, the Carribean states and Vanuatu gained this privilege just recently - in 2015. This is a privilege not a right, and in our volatile world things change very quickly. Look at Brexit: the privilege to live and work in the EU has been immanent to the UK citizens. Now, it’s not that cut and dried.
The UK citizens still need a visa to enter Russia and China - crucial financial and political centres. A Russian visa application, for one, requires a good deal of paperwork, time and effort. Whereas holders of Carribean passports are welcomed with open arms in both Moscow and Beijing. On the other hand, after the Russia-Ukraine crisis Russians find it difficult to obtain the UK and US visas. They even have to travel abroad to file their applications in the consulates of neighbouring countries.
Visa-free travel possibilities are subject to political speculation and change. Building your citizenship plans on the sole factor of unrestricted mobility may be an error. In this perspective, Europeans and Americans are willing to expand their life opportunities and gain a second passport. At any rate, it’s safer to have more than one document - just like you may have several credit cards in your wallet.
Also, if you lose your only passport, it’s a nightmare. There were some awkward initiatives like the U.S. consulate - McDonalds deal in Austria where you can drop into a restaurant and ask for a hot line with the American officials. Whatever the intended improvements, losing a passport always entails a load of time, effort and nerves. In critical situations, a second passport may be a life saver.
One of the key factors behind multiple citizenships is personal safety. The US and UK citizens may not be welcome in some countries that still generate lucrative business opportunities. Besides, the global terrorism has notoriously singled out Brits and Americans as bitter enemies. In this regard, travelling with a neutral passport would provide more comfort and peace of mind. Some restrictions have nothing to do with risk and only echo existing sanctions, e.g. the U.S. banning its citizens from visiting Cuba. Hopefully, the situation will turn for the better and the embargo will be waived under the improving circumstances.
Taxation is also of paramount importance. Americans have to pay tax on all their global incomes - the only way to end this is surrender the US citizenship. A highly unlikely scenario for the majority of Americans, it may still be a choice for select individuals. In this case, they’ll need to obtain an alternative citizenship in order not to remain stateless. Since Americans love the Caribbean, it’s only natural they may invest into an apartment and procure the passport that comes with it.
For European citizens, the tax issue may not be as acute as for wealthy citizens in the U.S. That said, the EU economies are now in a bad streak so they may consider imposing more taxes. Back in the times of Sarkozy, France considered taxes on worldwide revenues. For affluent Europeans, another passport is a way to diversify and mitigate the risks of being tracked and scrutinised by their local tax authorities.
Once you unlock the freedom of holding several passports, you wouldn’t like to give up the independence you’ve accomplished. Naturally, second citizenship comes at a cost, and some well-off Europeans and Americans are willing to shell out for it.
For further information or to discuss your personal circumstances in a private consultation, please contact Astons at email@example.com or call +44 207 292 2977.