Q&A residence and citizenship
Jonathan Chalmers at Henley & Partners, a senior member of the firm’s residence and citizenship practice group
Q. Is there a growing global trend of people seeking second citizenship?
A. Yes, definitely. Today, a person of talent and means need not limit his/her personal life and professional business to only one country. Dual nationality is the inevitable result of the increased mobility of large numbers of people and of the growth of an integrated world economy. In this environment, acquiring and using more than just one citizenship enhances one’s personal liberty in many ways.
Q. Which are the countries whose citizens are more keen on acquiring a second citizenship?
A. That is a long list actually. Whatever the situation and country, there are many reasons why one should consider becoming a citizen of more than just one country, and consequently hold more than one passport, and accordingly there are many countries whose citizens are keen on acquiring a second citizenship: Due to political circumstances, for example, citizens of many countries – including many Asian countries – find it difficult to travel abroad and are confronted with strict visa requirements each time they want to enter a foreign country.
On the other hand, however, nationals whose passports usually allow them easy access to most countries can find it impossible to obtain visas due to temporary travel restrictions during trade sanctions and other geopolitical disturbances, or due to their nationality may be overly exposed to terrorist threads or other hostility. Moreover, although a required visa may well be granted to you, it is always a very tiresome procedure – during which your passport on which you get the visa is not available – and can be an important factor of delay for your travels. If for some reason you cannot get or renew a passport in your home country (political instability, civil war), the right to another passport can be very useful, even critical. Even if you simply loose your passport, it may take some time until you can get a replacement, and having another passport may be crucial. (Picture: St Kitts)
Q. Is the trend of seeking second citizenship more among the wealthier classes of people?
A. Not only. But of course wealthy people have more options. Not only can they immigrate more easily to a desired new country of residence and subsequently become a citizen there, they can also acquire citizenship based on an investment and without prior residence requirements.
Q. What are the principal reasons why people seek second citizenship?
A. People from all over the world and from a wide range of backgrounds acquire an alternative citizenship. Among these people are:
citizens whose nationality makes them a target for kidnappers, terrorists, politically motivated violence,
citizens of countries where the political or economic situation does not allow widespread visa-free travel for its passport holders,
persons who travel very often to various countries where they need visas and who may need to travel at short notice while they are waiting for such visas to be issued on their current passports,
citizens of countries with an uncertain future who acquire alternative citizenship and passports to ensure that they continue to be able to travel or have the option to relocate after possible political changes,
persons who value privacy when travelling, doing business or for banking and investment,
citizens who wish to have the option to renounce their citizenship after acquiring their citizenship of choice, for example, to avoid – legally - otherwise compulsory military service requirements, taxation, or similar issues,
persons rendered stateless by birth or through accidents of history,
citizens of countries with high direct taxes who acquire alternative residence and citizenship as part of a strategy to reduce their tax liability, and
anyone who wishes to have the possibility to retire in a safe haven at any time in the future.
Q. What are the various benefits of having a second citizenship to the person seeking the new passport?
A. As a citizen and passport holder of two or more countries, one can travel or move a residence more easily, particularly in an emergency. The right to travel, to enter or leave a country, at some point, may become crucial. This flexibility may even save your life. Perhaps, you are a
citizen of a well regarded, major country, and you think you will never need an alternative citizenship and passport. You may not foresee any problems now. Your current passport may permit travel almost anywhere without the need for a visa.
But an alternative passport is similar to an insurance policy. It’s something you should have in reserve well before an emergency arises. Depending on your country’s international reputation, your present passport may restrict your movements. Or it may make you a target for terrorists, expose you to difficulties when you travel or attempt to conduct business internationally. Using a different, second passport can restore your personal security, ease of travel, and allow hassle-free border crossings.
Q. How do Citizenship-by-Investment programs help the countries that provide such facilities?
A. Foreign persons willing to create employment through business investment in other countries are officially welcomed with open arms in most countries. Established nations such as Canada, Belgium, Ireland, Spain and Switzerland, as well as many developing countries, have incentive programs aimed at attracting foreign investors interested in moving there. These governments offer special conditions allowing fast-track immigration, grants, subsidies, or substantial tax breaks, and often citizenship after a few years of residence. There are now however only three countries which offer legal and clearly defined Citizenship-by-Investment programs which require no residence period. These are Austria, the Commonwealth of Dominica and St. Kitts & Nevis. Both residence and citizenship programs help countries to attract talented investors who bring with them know-how, capital and experience.
Q. Does offering of second citizenship help countries to increase flow of foreign investment?
A. Absolutely. For example, in St Kitts & Nevis, the government utilises this programme to attract investors of good character to make a substantial contribution to the development of the country. These investors are then given the opportunity to apply for citizenship within the strict guidelines of the law and the relevant regulations.
Q. Do you see the demand for second citizenship rising after 9/11?
A. Yes. Since 9/11 there are not only increasing border security and more restrictive visa and immigration policies in place worldwide, but the global situation has lead to many more internationally mobile people seeking the additional option of a second citizenship and passport. More than before 9/11 you may suddenly find it impossible to obtain visas due to temporary visa restrictions, or due to your nationality you may be overly exposed to terrorist threads or other hostility. If you are a US citizen, for example, it may be a good idea in some countries not to use your US passport but instead check in at the hotel or airport with your second passport.
Q. Have countries tightened their immigration and residency laws after 9/11?
A. Yes, an in some cases, such as the US, quite considerably. We now live, more than ever, in a world of guarded international borders, strict entry controls, and complex immigration laws. In this environment it has become more difficult to move across borders, more difficult to immigrate, and more difficult to acquire second citizenship. Nevertheless, there are still possibilities worth exploring.
Q. Are there any concerns over possible misuse of second citizenship status for wrongful, illegal purposes such are terrorism?
A. Several known terrorists have had Belgium, German, Canadian or British citizenship, and in several cases these were second citizenships, not acquired at birth. However, you will not find any terrorist with, say, a St Kitts & Nevis or Austrian passport. These are unattractive for terrorists and criminals, who are more interested in citizenship documents and passports obtained either quietly by being resident many years in countries where it is easy to become a citizen, or by illegal means, through unofficial channels. Indeed, in many if not most countries it is possible to make (illegal) direct payments to corrupt government officials in return for passports and citizenship documents. A terrorist would be interested in hiding his identity by obtaining, say, a false French passport, on which he can travel visa-free to the US and other target countries. He would not be interested in obtaining Citizenship-by-Investment in, say, Austria or St Kitts & Nevis, as the extremely strict controls and background checks would deter anyone but the cleanest applicant.
Q. There are countries that do not allow second (dual) citizenship for its citizens. Is there an ongoing dialogue with these countries to permit such status?
A. While some countries officially discourage dual or multiple nationality for their citizens, most now accept this as a fact of international life. Still, when it comes to dual citizenship, the world is divided: there are countries whose citizenship regulations allow its own citizens the acquisition of another citizenship without loosing their citizenship. On the other hand, there are countries which do not allow the acquisition of another citizenship, that is, where the acquisition of another citizenship will lead to the loss of the present citizenship.
Dual nationality is the inevitable result of the increased mobility of large numbers of people and of the growth of an integrated world economy. In recent years, many countries have amended citizenship laws to recognise these new realities, and I expect more and more countries to follow this trend and allow dual citizenship.
Q. If I am interested in Citizenship-by-Investment, do I have to live in Austria, Dominica or St Kitts & Nevis?
A. No. You are not required to live in Austria, Dominica or St Kitts & Nevis although you have the right to and are free to do so at any time. The governments of these countries are of course keen to encourage new citizens to become involved further in their economy and offer substantial incentives to make this attractive.
This article was composed by Henley & Partners and originally appeared in HK Business