Do you need “Citizenship Insurance”? That will be the topic of today’s article.
On this article I provide some of the reasons why wealthy people should consider second citizenships.
It is written in the context of hardening views towards “the rich”, despite the hypocrisy of this position, which I spoke about on the video below:
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Imagine putting all your funds in an uninsured bank. Can’t imagine right? Because you’d never do that. So why that money you earned in a very hard way, was spent on getting a citizenship of the country you want, should be lost in a few seconds? Have you ever thought about getting a citizenship insurance?
While this idea might seem foreign to you, it’s an enough simple concept, which will become more common with the time. In this blog post we will talk about why you need to think about getting an insurance for you citizenship.
Citizenship insurance provides a contingency plan if you do not want to live in your home country anymore. This plan gives you a backup citizenship and a passport, so you can leave in a quick, safe and most importantly legal way if you decide where you are no longer contributes to your comfort.
Citizenship insurance is a very important concept for many of expats, but more expats do not know about this option yet. There are two important reasons for going away from your home country and the first one is Plan A. People following these two plans are looking for a second passport which will give them the chance to get rid of their current citizenship.
This could be for privacy reasons, freedom, financial reasons, or they simply would like to live in a different country for a better life. Some people make plans to send their children to better schools or more affordable universities, so the list is very long.
For example, if you are from the United States and want to live in the European Union, you must create Plan A, which will help you get permanent residency and then your passport. But here comes the negative version of this all. What if your Plan A doesn’t work and all your hope is on Plan B? This is why you get citizenship insurance.
Passports as insurance policy
Being a high or ultra-high net worth person, means you have a variety of insurance policies which help you cover as much aspects of your life as you want. Probably you have insurance for your car, your home, your business, and anything else of great value.
There is a growing statistics in the world where people from Russia, China, Turkey or other countries in the Middle East are pushing the idea of insurance even further by going out and getting a second passport.
One of recent studies related to ultra-high-net-income people found that a very significant percentage of demographic groups in developing countries had or were planning to obtain a second passport. This is because at home there is always the possibility that things will fall apart.
If you are looking for an example, here it is. So there are many people living in China who are looking for a second passport. They want to ensure that no matter what the government does, whatever happens on political and social platforms of the country, they can leave the country.
This people’s goal is to go somewhere they cannot be denied, regardless of the situation in their country. Accordingly this means that they need citizenship insurance. If you remember it was the Plan B in case things go wrong in their home country.
Obtaining a second citizenship will also give people advantages such as visa-free travel and the privilege of being associated with a second country. But in most cases, the main reason for getting a second passport is the need for an insurance policy.
Why do you need citizenship insurance?
Citizenship insurance is not a preparation for something scary, instead it is about diversification.
The reality of the expat world is that many governments can impose the strictest restrictions on their citizens. For example in the United States, if you have a tax debt of $ 100,000, they may take your passport or refuse to issue you, and what you have? Already nothing.
But this was just an example, you might not think this will be happen to you. If you just keep track of your taxes everything will go correctly. The citizenship insurance focuses on legal tax cuts and abroad life so you can go where you are best treated.
But remember that companies that do citizenship insurance, do not support tax evasion.
The problem is that sometimes the tax office is wrong. Yes, they are not infallible. But it’s not just about taxes.
Today, more and more countries are informing their citizens where they are allowed and not allowed to move or travel. If you study the strategies of governments around the world, you’ll come to a conclusion that governments tend to create restrictions on the movement of their citizens. At the very least, they give themselves the opportunity to create more restrictions in the future.
In fact, with only one citizenship, you become a slave to this country and whatever they decide.
People in many Asian and European countries could understand this phenomena. They understand that if things go wrong, they will have to deal with the consequences and need a way to protect themselves, and here is another reason we have many expats.
On the other hand, there are countries that make their citizens to feel safe, like the residents of the United States and other Western countries do not feel the need to leave their country. They can understand why someone in a place like China might be worried, but they can never imagine something bad going on in their backyard.
Throughout history, there have been many people who might need a second passport, but they weren’t active enough to go and get one while they could.
One of the actual things we can see in the Western world is that governments are increasingly looking to raise taxes. Countries that do not have wealth taxes are discussing their introduction. In countries like the United States, politicians want to raise their taxes to 70%, they have a big goal.
They want to confiscate your wealth and force you to do something with your money that you probably do not want.
Having a second passport gives you control over this kind of situations, no matter what the politicians do or is the president. You always have the opportunity to go somewhere else where you, your family and your wealth will be in safe hands.
Remember that times can change, and if you think of moving from your home, that you do not feel safe and secured in your country, do not say “later”, just go for it.
One day you will need a second passport very urgent but that “later” will destroy everything. You will end up spending a lot of money, going through a lot of hassle and often suffering a lot of stress in order not to make it in time.
Citizenship Insurance as a lifesaver
The another advantage of citizenship insurance is that it can have benefits that go beyond your current situation. Having a second citizenship can allow you to leave an inheritance that will benefit your family. In many cases, you can even pass your new citizenship to your children and grandchildren, which is perfect.
In fact, when it comes to obtaining a second citizenship, you should start studying your family tree. Someone from your relatives may be your chance to get another citizenship at virtually no cost.
One of the most popular options to get a citizenship can be an investment, about what we talked a hundred times. Many countries have that laws to give you an opportunity to obtain a passport within six to twelve months after investing a fixed amount mentioned by them, in some aspects of the country’s economy. You can hold this passport for the rest of your life, making investments that can bring you higher returns than you would see at home.
If you hold a second passport, you will benefit of living in both countries. You can have a business in one country, live in another one, you can send your kids to school or university wherever you want. You can live, work and do business without restrictions in both countries.
And if the second passport belongs to a country in the European Union, these advantages and opportunities can spread to a whole block of different countries.
If at some point one of these citizenships starts to cause you problems, you have the right to either leave the country and leave it, or even renounce your first citizenship.
Renouncing citizenship is not an easy decision, it’s pretty okay if most people do not want to leave their home country. They want to remain citizens of the country in which they were born. Everything is fine.
But if you are a successful person, you are required to have an insurance policy for your citizenship that will protect you in the future. There is no reason why it should be different from any other important asset in your life.
There are some ways to get started in not that expensive way. But of course there are also more expensive ways to speed up the process. Nevertheless, it is important that you are prepared and protected if you have a citizenship insurance plan.
When should you get a second passport?
You cannot insure your car after the crash or you cannot buy insurance only after you got robbed. The idea of an insurance is to exist before something bad will happen to you. And the same is with citizenship insurance.
You don’t have to live your life always believing the worst will happen, but wouldn’t you like to have insurance until the house in question burns down?
Many people think “When things go wrong, I’ll think about it.” But if you keep putting it off, you will either never get it done, or you won’t get it done on time.
There are many different ways to obtain a second citizenship, and some of them take longer than others. If you are trying to obtain citizenship through naturalization, the process takes years. If you don’t start now, you may not be able to obtain citizenship until the process requirements change.
What if the country from which you want to obtain a second citizenship terminates the program?
Every year, new residency and citizenship programs either rise in price, or become more complicated, or are canceled altogether. In just the last year, you’ve seen programs like those in Canada just disappear.
It’s always a game of looking for what works now, but when you are inside, you are inside. When you receive your passport, it is yours forever. When you get a bank account, they probably won’t close your account, even if the rules change.
So, if you are serious about the offshore world and are serious about obtaining a second citizenship that can protect you, why not start the process now?
List of the easiest citizenships you can get and the cheapest countries to buy a passport
Now when you already know why you need citizenship insurance and probably thinking about a second passport to get, we will try to simplify your job and present a list of countries that require short time and less effort to get a second passport, and most importantly they accept dual citizenship.
If you are fortunate enough to have ancestors from places like Poland, Italy or Ireland, then getting a second passport is quite easy if you can document your family background.
However, for many people outside, obtaining dual citizenship or a second passport requires the following:
Obtaining the second citizenship will give you the opportunity to become a citizen of two or more countries at the same time. While remember that not all countries will allow you to hold two or even three passports at the same time, such as India or China, or the United States, Canada and the United Kingdom do.
There are also countries where it is a “gray zone”, such as Germany, Panama and Singapore, where it is generally prohibited in theory, although it is often done in practice.
How to get dual citizenship?
There are four main ways to obtain a second citizenship:
Many countries make it easy for you to obtain citizenship if you can prove that you have ancestral ties. This is especially common in parts of Europe. In some countries, you need to prove that your parents were born there, but for others (e.g. Lithuania, Ireland, Italy) you can apply for hereditary citizenship even if your grandparents or even great-grandparents were born there.
Citizenship by origin is usually free, the process can be completed relatively quickly and is undoubtedly the best way to obtain a second citizenship if you qualify.
The naturalization process usually involves living in the country for a specified number of years as a permanent resident before applying for full citizenship. Getting permanent residency is the first step and usually requires spending more than 183 days a year for x years.
The requirements for obtaining full citizenship can vary greatly from country to country. You can apply for citizenship in as little as three years in some cases (eg Paraguay, Armenia, Dominican Republic) or more than 10 years in other cases (Germany, Austria, Switzerland).
The specific requirements for how much time you really need to spend in a country, whether you need to establish economic ties, know the language, history or the constitution, depend on the country.
Panama is the easiest place in the world to obtain a residence permit on the so-called Panama visa of friendly nations.
It is a simple process that involves setting up a local company and opening a bank account for a fairly small amount. You don’t even need to spend time outside the city.
And after five years, you are eligible to apply for naturalization.
Anyways remember that this option is the most time consuming way to obtain dual citizenship, but it is not the only one. Although it is available, it is only for those who want to live in the country on a more permanent basis.
Citizenship by marriage is another form of naturalization. Most countries in the world can provide you with a second passport if you marry a citizen of Canada, Ireland, France and the United States. However, this is not a viable strategy for obtaining citizenship.
An imaginary marriage relationship is a little risky. If you get caught, you can not only get into trouble and kick you out of the country, but also become an easy victim of extortion by an arranged spouse.
This option we have discussed already. A growing number of countries are offering so-called citizenship by investment or economic citizenship. They are intended for individuals who want to obtain dual citizenship in the fastest and easiest way. In exchange for buying real estate or an economic donation from USD 100,000 in Dominica and Vanuatu to USD 1-2 million for citizenship in countries like Malta and Cyprus, you can get a passport in just 3-6 months. In fact, you can shorten your Vanuatu visa processing time for an additional $ 10,000 and get it in 30 days, making it the world’s fastest citizenship by investment.
Generally, there are no residency requirements or any minimum number of days you must live there in a year. In fact, you don’t even need to visit the country in advance, all this can be done online, citizenship is given for life and can be passed on to future generations.
Some of the best citizenship by investment programs come from countries such as:
- Saint Kitts and Nevis
- and Malta
Benefits of Dual Citizenship
It’s already not a news that dual citizenship can have a lot of benefits, let’s see some of the:
Better quality of life
Some countries simply live better than others. Many of the countries that offer convenient ways to obtain dual citizenship also have beautiful locations, affordable prices, and access to high quality healthcare and education.
Increased freedom of movement
For those coming from countries with weak / restrictive passports with limited visa-free access, a second passport is often the ideal solution.
Optimization of taxation
Many countries offering dual citizenship also have the option of 0% taxation. You can significantly reduce or even completely get rid of the tax burden by obtaining dual citizenship in a tax haven. For example, in countries such as Antigua or Vanuatu, you can live without paying income tax or capital gains. However, each country has its own taxation rules and it may not be possible to completely avoid taxation depending on the situation. This will likely depend on the second passport you have.
Plan B (you remember, right?)
In volatile times, having a second passport can be a great fallback in case you face uncomfortable life circumstances at home. The devastating effects of unexpected political or economic shocks, martial law, capital controls, and violence can be mitigated by knowing you have a reliable plan B.
Dual citizenship opens up new business and investment opportunities in your new country of citizenship, as well as in other places in the world where strong economic and political ties exist.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 254.2 million answers views on Quora.com and a widely sold book on Amazon
In the article below I spoke about the following articles
In the article below I spoke about:
- What are the biggest delusions that beginners have in the stock market, apart from the idea that investing is either very risky or a get-rich-quick scheme?
- Is working hard the key to being rich, or something else like working smart and being persistent?
- Is being a millionaire easier in China or Iceland, or is the question misleading?
- Is making money online in 2021 really that easy?
To read more click below