Should you consider getting a second passport?

Posted on: 28th February 2020 in Investments

Your passport is an extremely powerful thing.  The power of yours all depends on your country’s relationship with other countries.  Not all passports are created equally. For example, Japan tops the list of most powerful passports, allowing visa-free access to 191 countries. In contrast, a country such as Saudi Arabia only allows visa-free travel to 77. Restriction on travel is one of the reasons why the demand for getting a second passport through dual citizenship is increasing.  Before we look at the benefits, let’s analyse the full implications of citizenship and residency.

Citizenship vs residency

The lines between citizenship and residency are often blurred. Let’s clear up some of the confusion and look at what each means. Permanent residency:

• – A legal status which gives you the right to live, work, and study in a country;
• – Some countries extend tax laws to non-citizens, which can be beneficial;
• – Requires you to spend a certain amount of time in the country to retain residency status;
• – Residency can be revoked at any time;
• – Can lead to gaining citizenship status.

Citizenship:

• – You get all of the rights and privileges of that country;
• – There are no minimum stay requirements;
• – Citizenship is permanent and can be passed on to other generations;
• – Getting a second passport is possible once you have citizenship.

The problem with the conventional ways of gaining citizenship or residency is the timescale of the entire process. Citizenship and residency by investment programmes fast-track the process.    Citizenship by investment programmes are growing in popularity  

Investment programmes explained

Citizenship or residency by investment programmes let you invest in a country’s economy. In return, you gain residency or citizenship status. The first investment programme offering a second passport was launched in 1984 by St Kitts & Nevis. Since then, more and more countries have followed suit. Investment Migration Insider predicts that the industry is worth $21.4 billion based on current figures, and it is predicted to increase.  The sector’s knowledge platform suggests that the industry will be worth $100 billion by 2025, based on current projections.  

The benefits 

The freedom that comes with getting a second passport is one of the main reasons applicants opt for this investment. Better global mobility makes expanding your business footprint much easier. It also reduces the need for a visa, which can be time-consuming. Some countries such as Portugal offer residency by investment programmes. Although you will not be a citizen, it does open the door to that option later down the line. Even without a passport from that country, your travel options do open up. For example, residency status in Spain allows visa-free travel to the 26 European states.  Having dual residency or citizenship can also make financial sense.  Countries which offer citizenship or residency by investment programmes tend to have favourable tax regimes. Depending on the country, this could mean you do not pay Capital Gains Tax or Inheritance Tax. The benefits also extend to your family. High standards of education and access to some of the world’s leading health care systems are available to residents and citizens.  

What to do next

For high net worth individuals, having a second passport is becoming a necessity for their business operations. Holborn’s investment migration experts have extensive experience working with high net worth individuals who are looking to gain dual citizenship or residency. For more information, or to find out how we can help you, contact us using the form below.