Over the past few years there has been a significant rise in the number of people obtaining a second passport. There are many reasons why the idea of a second passport can be beneficial. Here are just a few examples:
- Concerns about children’s future
- Safety concerns
- Travel Opportunities
- Business Opportunities
- Weaken infrastructure in a current location
- Constraints on movement and financial prosperity due to local corruption
A second passport can increase your investment horizons as well as protect your freedom. Having dual citizenship can be an important step to internationalising your life. For those who are parents, dual citizenship can help provide a better life for your children, giving them citizenship in the best country possible. Most people carry only one citizenship and therefore one passport, this leaves them open to restrictions on movement and capital control. For example US citizens may be excluded from lucrative investments and may even be restricted on opening a foreign bank account because they hold a US passport.
Which second passport is the best passport?
This is a hard question to answer. Nowadays there are quite a variety of countries offering dual citizenship programmes so careful considerations needs to be made of the plethora of different issues which may be relevant to you, such as:
- The quantity of the travel documents
Passport usability rates significantly around the world. The best passports in terms of VISA – free travel come from European countries such as Malta. Malta offers VISA free travel to more than 160 countries.
- Financial Opportunities
It’s an important factor that your second passport offers financial flexibility so you can spend and invest your money where you want to. As I mentioned previously, while a US passport may allow you to travel VISA free to many countries, many offshore banks won’t let you open accounts in order to avoid compliance laws like FATCA or because an investment would involve US SEC intervention.
- Civil Obligations
National service is required by some countries so you wouldn’t want your children to have to go through the arduous experience of having to complete national service.
- Tax Obligations
Careful consideration of the countries tax law should be made as you wouldn’t want to fall foul of having to pay tax on your monthly income even if you don’t live in the second passport country; let alone having to file in a tax return.
Political unrest and which countries are considered to be friendly or not with others should also be considered. Being stranded somewhere because your second passport country has an argument with another country or if it was the target of political uncertainty would not a helpful.
- Multiple Citizenships
Some countries will not let you hold two passports and so you would be required to renounce any existing citizenship. This can cause issues when trying to achieve internationalizing as you are then limited to one country. The ideal passport allows you to keep your existing nationality as well as obtain additional citizenship later.
Written by Samantha Snow, Client Services Manager – Abacus Malta