Why You Can’t Miss Out on a Second Passport

Some benefits of a second passport are obvious. Visa-free travel and residency rights in a new country; but let’s take a deeper look at what citizenship programmes really offer: security and prosperity through global mobility.

Business

Access new markets, favourable business conditions and investment opportunities in other countries. The ability to travel easily and quickly allows you to explore new possibilities and act in a timely manner to grow your business or investment portfolio, execute your plans with precision and adapt to ever changing markets.

In a changing and globalising world, the internationalisation of your assets is essential to their future strength and survivability. We will dive deeper into risks later in this article, but having companies, bank accounts and both physical and financial assets in multiple locations isn’t just desirable but prudent given that the “shrinking” effect of globalisation has brought risks just as close as opportunity. Our world is so interconnected that seemingly isolated political and social crises can easily spill over into less isolated financial ones. Diversifying your wealth and investing in multiple locations, each with varying security from different risks, gives far more peace of mind than having all your eggs in your home country’s basket.

Governments are nothing if not unpredictable, and political and social pressures can lead to some startling and unforeseen business and financial policies. Having assets covered by different jurisdictions is protection against sudden restrictions and the flexibility of multiple investments helps mitigate the impact of individual policies on your overall wealth.

Tax

Most governments that offer citizenship by investment programmes have favourable tax rules for citizens including no tax on wealth, gifts, inheritance, foreign income or capital gains. Having access to a different tax regime can bring benefits, not to mention the offshore banking availability of accounts with international transactions. This allows better tax planning opportunities with the ability to pass on your wealth to the next generation without incurring a heavy tax bill. With dual nationality and multiple residencies you can legitimately reduce your tax bill by residing in a low tax or tax friendly jurisdiction. International tax affairs are complicated however, and it is strongly recommended to seek professional advice before making any changes to your tax arrangements.

Related: Maximising Tax Benefits with CBI & RBI

Upgrade to a Luxury Lifestyle

Having visa-free access to a plethora of global destinations opens up the world of luxury travel for holidays, exploration and shopping. Upgrade your lifestyle by incorporating travel for work and pleasure, experience new cultures, visit world famous tourist attractions or sample new cuisine and luxury hotels.

Your Family and Children’s Future

Being able to travel without the hassle of visa applications creates easy access to world leading services in other countries. You can now travel to access the very best of healthcare and education services for you and your family. Accessing global opportunities is invaluable for your children’s future. They can attend high level education institutions and take advantage of easy travel for gap years, cultural experiences and specialist education opportunities. Combining this with diversification of your assets and reduced inheritance tax can set your children up for success, even in a constantly changing, increasingly globalised world.

No physical residency requirements

There are no visit or residency requirements with a second passport. You never have to travel to or stay in any country at any time, even during the application process. You have complete travel freedom and when the time comes, your passport can be renewed at an embassy of your country of citizenship.

Permanent Second Residency Availability

Having a second country of residence always available acts as an emergency insurance policy in case you can no longer stay in your home country. Political crises, conflict, natural disasters and pandemics are just some of the unforeseen circumstances that can occur closer to home than expected in a highly globalised world. A second residency gives you and your family a safe place to return to should you ever need it. Having full citizen’s rights in this second country means you don’t have to worry about living and working rights or access to services like health care and education. Of course, should you wish to take advantage of the second residency in a non-emergency situation, you can; taking full advantage of buying property, opening another bank account, staying in world famous resorts and spreading your wealth over a larger area.

You Don’t Lose Access to Your Home Country

The beauty of dual nationality is that you (in the vast majority of cases) don’t have to renounce citizenship of your home country. Even if you have to leave your home country for an extended period of time or travel using your second passport, you still retain citizen’s rights in your home country, and as long as you use your original passport to enter and leave your home country you will not experience any stay restrictions.

An Insurance Policy Against Instability

The importance of mitigating the political, economic and social risks of being tied to one place cannot be overstated. Even seemingly stable and thriving countries can experience sudden downturns when a localised crisis has an extended global impact. Governments can place travel restrictions on their citizens. Such travel bans may severely impact your family if it happens at an inopportune time. Holding a second passport would allow you to escape such restrictions. Travel restrictions can also be placed by other countries on certain nationalities. This can occur for a variety of reasons, such as public health responses as happened with countries that had poor vaccination rates during the recent pandemic, or for geopolitical reasons as happened to Russian nationals as a result of the war in Ukraine. Governments may impose such bans for purely political reasons, to further a particular idea or policy, and it can be severely detrimental to the wealth of citizens in the affected country if they do not have assets in other locations or a means of travel outside imposed restrictions. Your second passport gives you access to politically stable countries in case of crises or conflicts close to home. In the case of a pandemic or the outbreak of a conflict it is too late to consider dual citizenship as a solution due to the processing time of an application. It is far better to be prepared than be caught unaware by unforeseen problems. These problems don’t have to be as dramatic as world changing disasters. Take the UK for example, where a combination of political circumstances has led to economic downturn and political inaction causing policy makers to take aim in a variety of seemingly random directions, one of which is moving to abolish so called “non-domicile” status, which may force UK tax residents to pay the highest UK tax rate of 45% on their foreign income in addition to paying tax in the jurisdiction the income was generated. While the UK passport is strong, allowing for access to a variety of other countries and tax jurisdictions, not all nationalities have this benefit. Adding a stronger second passport can act as an insurance against unfavourable fiscal changes that governments may introduce.

A second passport is not just about visa free travel, it brings global mobility, contingency planning, and diversification of wealth into more than one jurisdiction; hence reducing the impact of political risks, economic downturn and natural disasters. It’s fast becoming a necessity not a choice.