the advantages of a second citizenship
global citizens: Having the ability to live, work or study in multiple locations has tremendous benefits for you and your family
The world is becoming a smaller placer because of technology and its ability for anyone to be connected to friends, family and business regardless of their locations. Restrictions largely lie in the freedom of movement of people between countries because of their nationality. There are those who are lucky enough to have claim to multiple citizenships from birth because their parents, grandparents or even great-grandparents foreign nationality in a country which allows citizenship at birth.
Many people, though, seek to establish second citizenship as adults because of its global advantages. And when you think about the globalization of 21st century business, communication and travel, having citizenship in two countries makes a lot of sense.
So, what are some of the possible advantages?
1. Visa-free Travel
Those who are lucky enough to hold dual citizenship often will have the ability to move freely throughout the world visa free more so than those who do not have this luxury.
This is the primary reason many wealthy entrepreneurs opt for second citizenship. The ease in which it allows international travel, affording the same freedoms of movement as any other holder of the same document. However, one of the considerations that need to be at the forefront of mind with a Citizenship by Investment should be which countries can I travel to with my investment.
Certain passports can be processed within months, be reasonably cheap and will give you visa free access to the EU, UK and a handful of other countries your current passport won’t give you access to. But you would still need to obtain visas for the USA, New Zealand, Australia, Canada and Japan. It is possibly a better option to look at a citizenship which may take longer to obtain but will give you better visa free travel and be in a country which you may be interested to live in.
2. Tax Benefits
Any potential tax benefits of second citizenship will depend largely on the country you are from and your country of second citizenship. Certain countries offer zero income tax on your worldwide income which is likely to be very attractive to those who are paying large amounts of tax in their home country.
Many of the Caribbean Citizenship by Investment countries offer this tax allowance which makes them appealing. There is also the potential to classify any expense associated with your citizenship application (such as travel between the two countries) as business expenses, and thus can reduce your tax liability.
Dual nationality and tax affairs can be complex however. South Africa has dual tax treaties with many countries and its citizens currently are able to avoid paying tax in the country of their residence. But these benefits are likely to change in the future, requiring citizens to pay taxes on money earned overseas. This means dual citizens may be liable to pay tax in two countries. Again, getting professional advice here is vital to ensure you don’t experience any problems along the way.
3. Offshore Banking and Investment
Another key advantage to second citizenship is the wealth of business or investment opportunities it can open up. Certain countries do not allow foreign investment from your country of birth. Luckily South Africa has good international relationships with most countries. Opening a foreign bank account is still very difficult to do as a South Africa without a second citizenship or at least residency in another country.
You are unlikely to be able to take full advantage of generous interest or exchange rates or be allowed to invest in lucrative property markets, such as those in Europe. A second citizenship not only allows you financial access but also provides you a platform to raise foreign investment.
4. Educational Advantages
As an EU citizen, you are entitled to study at any EU university under the same conditions as nationals. However, conditions of entry vary significantly between individual countries and universities. Regardless of the other entry conditions, you may not be refused access to training or education in any EU country on grounds of your nationality.
While in some EU countries admission to higher education is free, such as Ireland, certain countries universities can be rather expensive. Financial support in the form of scholarships, grants and loans also depends on different criteria.
However, as an EU citizen studying at university in another EU country:
you cannot be required to pay higher course fees; and
you are entitled to the same grants to cover course fees as nationals of that country.
5. Greater Reach
It might be more obvious to you than others, but you will have the added advantage and ability to reach a far greater audience for your business. A second citizenship will often give you an extra ability to conduct business efficiently
As many countries only allow their own citizens to do business, obtaining second citizenship means you can not only do business in that country, but also trade with the many others in the region. A perfect example of this is in Europe or the Caribbean, being a citizen of Portugal, will allow you do to business in Portugal and the rest of Europe.
If you opt for Citizenship by Investment, visa free travel for business purposes should be a major consideration on your choice. To have the ability to quickly book a flight to travel to another country easily without a visa, will help you to do good business. Our Plan B must stress that fast and cheap to obtain a second passport may not be the best option for a long term strategy for you, your family and your business.
6. Generational Benefits
The easiest route to a second citizenship is often claimed by registration at birth or by descent. Many South African’s lost their ability to claim a second citizenship because of lack of insight from parents or grandparents to register birth’s on a foreign birth registry or make the application for dual citizenship by descent.
For those who have previously lost the ability to continue the succession of passing citizenship on to future generations and are looking more long term, a Citizenship by Investment opens up opportunity to retire abroad, move your business to a foreign market as a local vs foreigner.
A determining factor for which Citizenship by Investment country you opt for should include whether your children will be able to pass on citizenship to their children .
There are possibly many other benefits to claiming or obtaining a second citizenship. Our Plan B believes that a full detailed and purposely built strategy for its clients will deliver long term generational value.
The business world is becoming more global as technology continues to improve and certain countries are becoming more appealing to operate or house your head office from. If you are considering making a move for yourself or for your business and you do not have a second citizenship or residency, Our Plan B is here to assist you in building a strategy with you.