According to the Wealth Report 2018, more than 34% of high-net-worth individuals have already obtained second citizenship, while 29% are in the process of obtaining one. Having a second citizenship is already a well-established trend, even for those holding the world’s most powerful passports. Here are 7 questions I’m asked most often as a citizenship and residency advisor.
What are the top benefits for the EU, UK and US passport holders?
- Tax optimization purposes. A change of tax residence to minimize tax burden and preserve wealth. High-net-worth US individuals, for instance, obtain alternative citizenship as part of a larger tax optimization strategy to lower their taxes, preserve and protect their capital for future generations. In many US states, there is an estate tax, where 40% is implemented on estates over $5.4 million. For successful individuals who have worked hard to achieve their wealth, this is a bitter pill to swallow, especially for those native US citizens living overseas.
- This is where an alternative passport portfolio can be useful. The Caribbean passports of St Kitts, Grenada, and Dominica enables persons to acquire tax residency with no tax on worldwide income, thus, any income derived from a business registered outside of these islands is completely tax-free. EU passports, such as with Cyprus or Malta, have favorable tax regime with lower tax rates compared to the US. However, in order to escape the US tax laws, US citizens will have to renounce their US passport once dual citizenship is obtained.
- Safe and respected passports. If traveling to higher risk areas like in Africa, the Middle East, and Latin America, for business or pleasure, then a Caribbean passport will ensure safe entry and passage, more so than a US or UK passport.
Other benefits of obtaining a second citizenship?
This is the reason as to why CIS, Chinese, and Middle Eastern citizens are picking up on the trend.
- Visa-free Travel Without Restrictions. An alternative passport is highly valued for the greatly increased travel benefits, it can grant almost instant visa-free access to over 150 countries including the EU and UK in a matter of months.
- EU freedoms and better opportunities for families. A second passport presents the opportunity to relocate within the EU with the entire family, obtaining a high-quality European lifestyle with a top-rated education for children.
- Security. Many countries are on the verge of, or have existing economic and political instability. Owning a back-up passport allows one to move freely and quickly to ensure the security of the family.
What is the minimum entry level to acquire a second passport?
- Among the Caribbean programs, Dominica offers the fastest and most affordable processing time to acquiring dual citizenship either through a non-refundable donation of $100,000, or real estate acquisition from $200,000. Caribbean programs are relatively inexpensive, and you can obtain a passport within 3 months.
- European citizenship would require more investments as it gives the full freedom to settle anywhere in the EU bringing freedom to live, work and study anywhere within Europe. The Cypriot citizenship route is the quickest taking just 180 days for a €2 million investment and real estate investments must be kept for just 3 years. At half the cost of the Cyprus CIP, the Maltese Individual Investor Program requires €1,150,000 investment, out of which €650,000 is a non-refundable donation to the government.
Are there any residency requirements? Is it necessary to live in the country?
Caribbean Citizenship can be acquired remotely with no need to reside in the country, while EU citizenship offers minimum residency requirements such as Cyprus with only a one-time visit required to provide biometrics for the PR Permit .
As for investment options – is it worth investing in real estate?
- Real estate investment is the most favorable investment route under the Caribbean programs as it offers an opportunity to purchase government-approved real estate developments such as hotels, villas, and resorts with an option of freehold, whole ownership, or fractional ownership with a return on investment. The property can be sold after 3 or 5 years, without affecting citizenship.
- Second citizenship acquisition in Cyprus can also bring returns on investment when buying real estate, the property can be let with an average ROI of 4%. After 3 years from when the citizenship was granted, the owner can sell the property. The only obligation is to maintain a primary residence to the value of €500,000 which must be held indefinitely. This is in contrast to the Maltese program, which does not allow properties to be rented.
Are there any alternative routes to reduce tax obligations?
- For Non-US citizens, it is worthwhile exploring residency by investment programs which can significantly reduce tax obligations.
- Residency by investment is not the same as citizenship by investment. Portugal and Greece programs will eventually yield a second passport, but it will take at least six years in most cases.
- These second residency programs are great for tax residency or for a future ‘Plan B passport’ and also they give visa-free access within the Schengen Zone.
How to get a personal consultation?
Please contact Astons Trusted Advisors at www.astons.com, firstname.lastname@example.org or call +44 207 292 2977.
Astons is a leading global immigration advisory firm offering residency and citizenship investment solutions in the UK, EU & the Caribbean. Astons is a committed and regulated member of the Investment Migration Council (IMC), for EU & Caribbean investment immigration. Your first port of call when it comes to residency and citizenship investment solutions.