10 Reasons Why HNWIs Should Acquire Second Citizenship

Multimillionaires and billionaires are often referred to as High Net Worth Individuals or HNWIs. They are interested in preserving their wealth and growing it if possible. Acquisition of a second passport is an opportunity often overlooked by HNWIs while it should not be. Second citizenship can bring many advantages from visa-free travel around the world to enhanced tax planning opportunities. Below we list the most important advantages that a second passport can bring to an HNWI.   

1. Legal avoidance of sanctions and other restrictions

Foreign citizenship will come in handy if you come from a sanctioned country. If you are, a golden visa to Greece, for example, is currently unavailable to you. However, if you have a passport of a non-sanctioned country, you can use it to apply for a Greek golden visa.

Besides, some countries such as Canada, Australia, and New Zealand, for instance, apply certain restrictions when a foreigner wants to buy real property there. Sometimes such restrictions are temporary but in some cases, they are permanent. A foreign national is not entitled to own property in Thailand, for example, and there are other countries that apply the same rule.

At the same time, there are investment immigration programs that allow becoming a citizen of a foreign country in exchange for purchasing some real property there. Thus, an HNWI can kill two birds with one stone: purchase a house in the country that he/ she likes and simultaneously become its citizen.

2. Transboundary mobility

Many HNWIs are avid travelers who have to cross national borders often. A second passport can give you more visa-free destinations in addition to the ones that your home country’s passport gives.

Do you remember the lockdown times? Borders were closed for tourists and they could not enter foreign countries but all national states welcomed their citizens who were returning from abroad. Thus, if another pandemic happens (god forbid) and lockdowns occur again, an HNWI will be able to go to all the countries whose passports he/ she holds.

3. A ‘plan B’ to protect yourself from a sudden crisis

Unfortunately, a military conflict, civil unrest, or a natural disaster can happen at any time. Look at what is going on in the world at the current moment! Life is becoming increasingly unstable and unpredictable wherever you live.

An HNWI may want to (or have to) urgently leave his/ her home country because of a political, economic, or ecological crisis. If you have a passport of a foreign country, you can relocate there with your family in an instant and take your capital with you. What is important, you don’t have to become a refugee if something bad happens in your home country. Your status as a full-fledged citizen of a foreign state will let you legally enter that state and enjoy all the rights there that its citizens enjoy. 

4. An opportunity to ‘mask’ your identity

A ‘weak’ passport does not give its holder visa-free access to some destinations but a ‘strong’ passport of an economically developed country may also cause problems to the traveler. In some places, a person from a rich country might be kidnapped and held at ransom simply because he or she is from a rich country. If you use a less ‘glamorous’ passport of yours when traveling, you can conceal your identity or, to be more precise, your country of origin. Besides, a second passport gives you access to consulates of one more country in foreign states.

In addition, you can increase the level of your personal information confidentiality in your home country too if you have second citizenship. You can use your second passport to buy property in foreign countries or open bank accounts there and your home country’s authorities will know nothing about it. The authorities of your second country of citizenship will but not the authorities of your first country of citizenship. A second passport is an efficient instrument of confidentiality protection.

5. Tax planning

If used wisely, a second passport can also be an efficient tax planning instrument. This is one of the most important reasons why HNWIs look to acquire second citizenship.

The tax burden may become too heavy in your home country one day. This alone can be a weighty reason why you should become a tax resident of your second home country.

There is one more risk that a second passport can help avoid. The United States of America and Eretria are currently the only two countries that tax their citizens on their global incomes. If you are an American, you can cease to be a tax resident of the United States only if you renounce citizenship of the country. Otherwise, you will be paying taxes to Uncle Sam wherever you make money. The problem is that some EU states are also considering the opportunity to tax their citizens globally. HNWIs are at risk in particular as the world economic and social crises are deepening. With a second passport, you can renounce citizenship of one country without becoming a stateless person. Some food for thought.  

6. Business expansion and capital diversification

Second citizenship will also let you expand your business geographically. When you have a passport of a foreign country, you automatically have access to the markets of that country. What is more, you do not have to limit yourself to only two passports: you can build a collection of passports thus gaining access to several national markets.

Different jurisdictions have different leading industries, which opens wide opportunities for diversifying your business operations. A citizen of the country normally has much less trouble registering a company there in comparison to a foreigner. Many countries offer tax incentives to newly established companies. Some states also offer attractive opportunities for company re-domiciliation (changing the jurisdiction of company registration). 

Most HNWIs are business people and most countries lay down different rules for domestic and foreign entrepreneurs. You have to invest in a second passport but you will find that you investments return quickly because you can use the advantages available to local business people in a foreign country. 

7. Access to advanced healthcare services

You have to work very hard if you want to become rich and many HNWIs spend all their efforts on building their business empires while sleeping only a few hours a day. Hard work affects their health and at some point in time, they need good medical services to restore their systems. If you have a passport of a country where the healthcare services are at a high level, you therefore have better chances to improve your health.

8. High-quality education for children

When an HNWI applies for foreign citizenship, he or she can always add his/ her family members to the application. This means that your children can gain access to prestigious schools and top universities. Malta, for example, has a citizenship-by-investment program and it is an EU member state. Citizens of Malta are eligible to attend any European university and some universities in the region are famous throughout the world.  

9. Broadening your worldview 

When you acquire a second passport and live in the foreign country for some time, you will find that the worldview that locals have is different from your own. They will have a different mythology, a different set of moral principles, different traditions and customs, different outlooks, and a different way of life. They will take for granted what you don’t take for granted and vice versa. They will laugh at things that don’t make you laugh and vice versa. Immersing into a new culture is going to broaden your perception of the world greatly.

10. A comfortable life after retirement

A well-traveled person, an HNWI can choose where he/ she wants to live after retiring. It is wonderful indeed to spend your golden years at a place with a nice climate and a good infrastructure. When you have more than one passport, you have a greater choice of countries where you could retire. Five countries in the Caribbean, for example, have citizenship-by-investment programs and the Caribbean Sea is a piece of paradise on earth. 

How can an HNWI acquire second citizenship in a fast and simple manner?

What is the main goal that you pursue when choosing your second home country? If it is preserving your wealth, a low-tax jurisdiction with a stable economy and a favorable business climate would probably be the most natural choice. Some people believe that second citizenship means extra costs but it is a mistake to think so because you can find many attractive business opportunities that will compensate for all the costs associated with acquiring a second passport.

If you are not very much worried about earning extra money, a country with a nice climate and a quiet lifestyle may be the one that you should consider. If you would like to send your children to good universities, you have to look for a country with an advanced education system.

You have to realize that most countries allow dual citizenship and you would not have to renounce your home country’s citizenship when acquiring a second passport. Please also note that those countries that allow dual citizenship allow multiple citizenship too. This means that their authorities would not mind it if you have three or more national passports.

How can an HNWI obtain second citizenship in a fast manner? Naturalization processes take many years and you have to physically reside in a foreign country to become its naturalized citizen. You can marry a foreign person but you will have to wait for a few years anyway before citizenship of your spouse’s home country is granted to you. Some countries ally the jus soli (right of soil) and they grant citizenship to any person born on their territories. The person’s parents are then eligible for accelerated naturalization but it takes several years again.

The fastest way of becoming a citizen of a foreign country is using one of the citizenship-by-investment opportunities offered by a few national states. Currently, about a dozen countries administer citizenship-by-investment programs and you can acquire foreign citizenship within a few months if you request our professional assistance in the matter.