Second Passports/Citizenships

Yesterday, I started delving into the world of international investing. For a number or reasons listed, many foreign banks will be biased against doing business with US citizens. One solution to that, getting a second passport in a Commonwealth country, can alleviate those issues. Today, we will explore that option more thoroughly. The advantages that citizenship in a Commonwealth country offers travel and other benefits to all Commonwealth countries throughout the world.

Thoughtful consideration should be given to the acquisition of more than one passport. The acquisition of multiple passports of course presupposes that you are willing to accept multiple citizenship - and this is not at all a bad idea for many people. The first reason was listed yesterday. Because foreign banks do not want to do business with US citizens, having a second passport/citizenship can open the door to roughly 80% more of the investment options in mutual funds alone. The prospect of diversity, higher returns, and additional tax advantages can make the option very prudent.

Financial advantages of dual citizenship include the ability to purchase otherwise restricted shares in emerging foreign companies. Many foreign stocks and mutual funds are only available to local citizens. Issuers will require affidavits from potential buyers. Present the appropriate second passport as proof of citizenship and the door can be opened to you that would otherwise be closed.

Dual citizenship does have several advantages in other areas such as real estate. Many nations have laws which restrict the purchase of real estate properties. Typically, coastal properties and those in large desirable metropolitan areas are off-limits to foreigners. Such practices have been widespread throughout Europe, Asia, South America-even in Mexico. Thus, some of the available properties have remained unsold for long periods of time, not because they are outrageously priced but rather because locals could not afford to purchase them.

Employment is yet another issue. Foreigners are largely banned from working anywhere outside their own borders. Citizenship in another country can change all of that quickly. In fact many of the world's largest multinational corporations favor employment candidates with dual passports. If you set out to open your own business overseas, the same advantages will apply. Finally, dual nationality could open all kinds of doors overseas including participation in foreign social security programs, national health programs, even university tuition reimbursement programs.

A second passport may also give you access to travel in countries where your own passport might not be used because temporary or permanent travel restrictions. An example of this is the fishing rights dispute between Spain and Canada in 1995. Canadians were refused permission to land in Spain during the dispute.

Also, there is the terrorism issue. With the threat of terrorism on the rise, international travel can be particularly hazardous to citizens of certain countries. Hostage-takers and kidnappers who have commandeered planes and boats have often looked at passports in deciding who shall live and who shall die.

The specific benefits naturally depend on the country you choose. In most instances, governments only extend citizenship to individuals who have resided within their boundaries for minimum periods ranging from three to five years. These provisions can of course be waived. Few nations are begging for immigrants and those which encourage immigration are selectively looking for individuals who can provide specific services-like physicians, agricultural experts, entrepreneurs likely to create new jobs, and science teachers. Consider this: what possible benefit can a nation derive from carelessly issuing passports to outsiders with no purpose other than to skirt another nation's laws or to protect the privacy of individuals it hardly knows?

If you choose to pursue dual nationality through legitimate channels, you can probably obtain a valid second passport in a reasonably short time. Be sure to consider any adverse consequences, however. If your are a naturalized American citizen, you risk losing your American citizenship by swearing allegiance to another flag, voting in a foreign election, or deliberately renouncing your American citizenship at a U.S. embassy abroad. Native-born Americans will find that their U.S. citizenship is virtually cemented in stone.

It is possible that you already qualify for a new passport by virtue of your ethnic background. If you are of Germany, Italian, Irish, French, or Jewish ancestry, it is likely that you are eligible. In fact, if you have an Irish ancestry, you may even be eligible for a free second passport. Other countries, however, are eager to naturalize those who do not automatically qualify especially if they can bring professional talent or expertise to their nations. If you have a distinguished career in teaching, engineering, general management, administration, or medicine, you have a decided advantage. Several international firms claim to have connections which enable them to expedite the passport issuance process, obtaining dual nationalities for their clients in as little as two weeks. Sometimes this can be effected by bribing government bureaucrats, a common and accepted practice in many developing countries. You may be charged $5000 or more for these services with money passing through Swiss banks. Drivers licenses and other documents useful for identification can be obtained in the same fashion.

In some cases, completely new identities can be established. This should be very carefully considered because the numerous scams and swindles in this arena on documents that are never issued. Stories also abound suggesting that some passport acquisition services have simply issued bogus credentials to their clients. If you find yourself in possession of forged travel documents, you could of course end up in prison for many years. Furthermore, if the sole purpose of obtaining such documentation is to conceal your identity so that you can commit fraud or some other crime, or to hide a prior criminal record or divorce, you have merely compounded your troubles.

Another drawback is that you may be conscripted into the armed services of another nation if you are in the wrong place at the wrong time. Much of this is dependent on age and health condition.

If you have determined that you want to pursue the ever changing world of countries that offer nearly instant citizenship to investors, be aware that this will generally cost from $75,000 on up, although a portion of that is usually an investment in government bonds. The countries offering such programs change frequently.

If you are interested in obtaining more information on this topic, please contact me at the address below. There are multiple options available and the best will depend on your particular situation.

I want to give special thanks to Adam Starchild for much of this information.

By justice a king gives a country stability,
but one who is greedy for bribes tears it down. Proverbs 29:4 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com