February 23, 2010
Throughout our conversations, we have routinely discussed the importance of planting multiple flags.
If you live, work, bank, invest, own a business, and hold your assets in the same country of your citizenship, you are putting all of your eggs in one basket, and once that basket heads in the wrong direction, you can kiss your assets goodbye.
There are nearly infinite possibilities that pose substantial risks to your wealth and security, including taxes, litigation, confiscation, inflation, regulation, and good ole’ fashioned social decay.
Making the effort to move assets overseas, diversify your currency holdings, buy foreign property, set up foreign structures to operate a business, etc. are all major steps in the right direction to preserve your livelihood and safety.
If you have executed only a few of those steps, you are ahead of the 99% of the population. You will be safe while others watch their freedoms, their wealth, and their critical thinking be eroded by corrupt bureaucrats and the mainstream media.
One of the ultimate tools in preserving wealth, freedom, and security that we have touched on before is acquiring a second passport. This tool provides additional freedoms of travel, possible tax advantages, banking convenience, an escape hatch, and security.
After all, nobody hijacks a plane and threatens to kill all the Lithuanians.
Most importantly, when your home country starts heading in a catastrophic direction, a second (or third, fourth, etc.) citizenship provides you with options… and that’s what real freedom is all about– the power to choose.
Even without a cataclysmic event in your home country, a second passport pays big dividends. With a second passport, suddenly you find that you can open bank accounts and travel much more easily.
In my case, since I travel so much, the money that I have saved on visa fees alone has more than offset the cost of acquiring a second passport.
So how do you go about obtaining one?
For starters, if you’re a member of the lucky bloodline club, you may have been born as a second or third generation citizen somewhere. Many countries have programs which grant citizenship to descendents of emigrants– Ireland, Poland, India, and Italy are examples.
If, for instance, you could prove your lineage to Irish grandparents, you would have a case to apply for Irish citizenship. There are many more countries which have such programs, but I’ll save that topic for another time.
Second, there are a handful of countries where you simply pay for citizenship, either through an official program, or an unofficial program.
In terms of official programs, most people who have done even the most cursory research have read about Dominica and St. Kitts, both of which charge about $200,000 to $450,000 for citizenship. These are the most famous, but there are others, including Austria and even the United States.
If I have my way in this part of the world, there will soon be one more.
Yesterday I mentioned that ousted former Thai Prime Minister Thaksin Shinawatra is traveling around the world on passports from Nicaragua and the Bahamas… and not because those countries have official programs for ordinary investors, but because Thaksin used his connections to make compelling donations.
Clearly, unofficial programs generally come down to knowing somebody of significant influence in the government. In most countries, the head of state has the authority to naturalize a foreigner at his/her discretion, and this happens frequently in small countries that have been assisted by the actions or donations of a particular individual.
Now… assuming that you don’t have any heads of state in your rolodex, aren’t descended from Polish grandparents, and don’t want to swallow a $250,000 pill for St. Kitts citizenship, the next category applies to you.
I call it ‘connected’ citizenship, in which an individual can become naturalized through some sort of connection to the country. Typically this can be a combination of residency, marriage, adoption, religious affiliation, and of course, birth.
Obviously we can’t go back in time to change our place of birth, but the others may be well within our control, particularly residency. In fact, most countries provide a means for naturalization through residency, including the United States and Canada. But there are three important factors that determine whether a residency program is worthwhile:
First, how long do you have to be a resident in order to be eligible for citizenship? If you have 8 to 10 years to kill, you may want to consider putting the time in for France or Italy. But most people want something much faster, 1-4 years at most.
Second, how hard is it to actually obtain residency? In the United States, for example, residency applications are scrutinized and generally rejected– hence the inordinate number of undocumented workers. In practice, America now sends the tired, poor, huddled masses back where they came from.
Contrast that with, say, Singapore, where anyone with a good idea, strong work ethic, or investment capital is a strong candidate for residency through an easy, painless, transparent selection system.
Third, do you actually have to live there? Many countries’ naturalization regulations require an applicant to spend the preponderance of his/her time in that country. Canada is a great example… if you become a Canadian resident and spend too much time out of the country, you render yourself ineligible for citizenship.