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Today’s newsletter looks at various options to obtain residency, second citizenship, and a new passport, in another country. Both open fresh doors of opportunities.
As part of an integrated asset protective structure, for increasingly more individuals today, that means knowing that they and their families have a legal right to live or protect assets offshore. Many have already created an international planning structure and diversified at least a portion of their assets outside the U.S. as part of their planning strategy.
Some forward thinking individuals have gone on to the next planning level and are now looking closely at options for living at least part time somewhere else. Others already have some investments offshore. Some may never make the leap and move offshore, but at least there’s comfort in knowing they have a diversified plan. When the day of reckoning arrives, they don’t want to be caught off guard.
Let's take a brief look at several options available for obtaining second citizenship. One is economic citizenship, and another option is by first obtaining residency that leads to a second citizenship. The first option is a direct outlay of money, but the second can be a lower-cost option for many.
But first, as noted in our last newsletter, after eighteen months I’ve finally completed the new, 2nd edition of Offshore Living and Investing. The subtitle, Planning Strategies for the Sovereign Individual, says it all. It’s virtually a new, greatly expanded version about what’s happening today in the offshore world. Today’s newsletter contains small snippets from those pages, as we look at some of the factors to consider when looking to live or invest offshore.
And for those that own the first edition and want to keep up on the latest, at the end of the newsletter we are offering a special edition upgrade.

Different routes to second citizenship
In general, countries define citizenship based on one’s descent, place of birth, marriage, and/or naturalization. You might have a right to a second citizenship based upon any one or more of the following reasons: birth, parentage, marriage, or naturalization.
And another, fast track method to second citizenship is often referred to as ‘economic’ citizenship, which amounts to purchasing citizenship and receiving a new passport. All of the above are different routes to obtaining a second citizenship, and a right to carry that country’s passport.
Economic Citizenship
In some Caribbean countries (The Commonwealth of Dominica and St. Kitts) you can buy citizenships for a set amount of money. Dominica used to be a flat $50,000 for a family of four. It is now approximately US$100,000 plus fees and costs.
St Kitts was also much cheaper in the past, and now requires you to purchase a pre-approved condo on the beach for US$400,000 or more, plus another $90,000 in fees to obtain citizenship. You can live in the condo, and even sell it later. Alternatively, in St. Kitts you can make a one time SIDF contribution of $250,000 (single applicant) plus fees and costs.
Both Dominica and St. Kitts have good visa free travel to other countries, and are therefore a reasonable value. However, St. Kitts is generally considered having a better reputation, and the visa free travel is better. If renouncing your current citizenship is your primary objective, then either venue could suffice as a second citizenship alternative. Alternative citizenship is necessary prior to renouncing current citizenship. But if wider visa free travel and national reputation is of importance, then St. Kitts is certainly worth the extra overall cost….with the added benefit of either living in the condo, or reselling it later.
In Austria, another example, the cost of obtaining citizenship can approach US$ 10 million. The more difficult requirement is that a foreign person must invest substantially in an officially approved manner. The rarely granted procedure is limited to special circumstances, or to special people, such as famous artists, musicians, sports figures, and the like.
There is also a ‘fast track’ to citizenship in New Zealand, noted below, and covered in detail in the 2nd edition of Offshore Living & Investing. While not advertised as an economic citizenship, it is nonetheless economic in principle for high-net worth investors under the Investor Visa or Investor Plus Visa categories. Either case, the investor programs fast track citizenship significantly.
Ireland reopened citizenship through two residency programs aimed at bringing foreign investment to the Emerald Isle. The Startup Entrepreneur Program grants residency with funding of at least US$99,000 along with innovative start-up ideas. And the Immigrant Investor Program grants residency in exchange for investing in specific sectors - possibly low-interest bonds, Irish businesses, or even property. The second program requires investments between US$658,000 and US$2.6 million. In either case, after residing in Ireland for five years you are eligible to apply for Irish citizenship.
There are more options, but the above is a sampling of what’s available today. As always, caveat emptor in who you deal with for residency and citizenship services. 
U.S. citizenship for sale
For years, the U.S. government has publicly criticized foreign governments for offering residency and citizenship for sale. In typical hypocritical fashion, the proposed VISIT-USA Act is designed to provide foreign nationals U.S. residency that can lead to U.S. residency and citizenship, and bail out the U.S. housing market at the same time.
The VISIT-USA Act is slowly winding its way through Congress and would fast track foreign applicants, removing bureaucratic red tape. The bill is open to all nationals, and expedites priority visa applicants, introduces video conferencing as a means to screening foreign nationals, and makes major changes to visa procedures.
The legislation would provide a three-year residential visa for foreign nationals who invest at least $500,000 in residential real estate in the U.S. At least $250,000 must be spent on a primary residence where the visa holder would reside for at least 180 days per year (just below the 183 day tax residency threshold) while paying taxes for U.S. earned income. If the property is subsequently sold without being replaced, then they would lose their visa eligibility.
While the program is not expressly stated as a path to citizenship for foreign nationals, it’s unclear how someone renewing the initial visa and residing the required five years in the U.S. - three years if married to a U.S. citizen - wouldn’t qualify for U.S. citizenship.
Over the years we’ve worked with numerous clients to obtain economic citizenship in different venues around the world. Overall, the process is relatively straight forward and timely completed, when done correctly.
However, if you have the time and desire to reside in another country, then a less expensive option of residency leading to citizenship might be available.
Residency leading to citizenship
You don’t need a passport to live in another country. But temporary and permanent residency gives rise to different legal rights. And permanent residency can lead to a second citizenship.
Increasingly, individuals use legal residency in another country as an inexpensive means to obtain a second citizenship, and occasionally to sever draconian tax obligations at home. Here’s how it works.
Temporary legal residency doesn’t generally allow you to live long term in a foreign country. Short term travel or tourist visas are usually for only one to three months in duration, but under special business, working or retirement visa classifications they may be for one or more years. Often these temporary visas can be extended, and sometimes repeatedly, or converted into permanent legal residency, granting the right to stay long term in a country.
Permanent residency - or long term visas - can often be obtained for longer durations of stay for purposes of living in a country indefinitely. A country looking to acquire a class of immigrants (based upon age, employment, asset or income levels, etc.) sets a standard or criteria for interested immigrants. For example, a typical situation would be a shortage of skilled workers in a growing country looking to attract people with those skills.
A common classification for a long term or a permanent visa may arise from a business or investor category where the investor agrees to invest certain amounts of money for a minimum amount of time in the host country. Retired persons can have an advantage in one country looking to attract these types of immigrants (for example, Belize, Panama, Costa Rica, or Thailand), or be at a detriment in another country looking for younger, skilled workers that can contribute to the country’s long term economy (for example, New Zealand and Australia).

There are many different visa classifications, and the entry requirements change - sometimes frequently - as targets are reached and the government sets new goals for immigration.
And you can obtain legal residency – temporary or permanent - from more than one nation at a time. There is no restriction to the number of nations that you can obtain residency from. Multiple residencies are certainly a big advantage.
Once you reside in a foreign country for the required number of years, you can then generally obtain citizenship and a passport from that nation. The duration varies, and can be for a very short term if you obtain a special visa under an investor or business class, or otherwise it is typically three, five, or ten years to obtain citizenship.
First obtain a legal right to live in the country
Visa requirements vary from country to country – the rules are moving targets - but obtaining a visa is the easiest way to move and live offshore. For example, in just one year New Zealand changed its passmark requirements for obtaining a visa five or six times, going from relatively easy to very difficult, and then back again. As new immigration targets were reached, the passmark changed.
If you’re interested in New Zealand, don’t wait to apply for long-term residency if you are approaching age 50. Deductions to passmarks start to occur once you hit 50, and then it becomes difficult to obtain residency after age 54, unless you invest money, or establish a new business that creates local jobs and opportunities The reason is that New Zealand is looking for young, skilled workers to emigrate.  
On the other hand, some countries cater to retirees with a minimum amount of money to support themselves (particularly certain Caribbean Islands, Asian and Central American countries), or to the wealthy (Switzerland, Singapore, Hong Kong & Ireland).
Most importantly, if you are looking at residency to establish your newly adopted homeland with the ultimate objective of citizenship, start first with where you would enjoy living, and then see how your objectives of residency and citizenship can be reached. If your only objective for living in another country is to obtain its citizenship, then living there for the duration might feel like waiting out a prison sentence if the lifestyle doesn’t suit your needs.
For that reason many individuals prefer to purchase outright economic citizenship, which grants immediate citizenship rights, including a second passport.
Shopping for permanent residency
Some countries use investment schemes offering permanent residency status to attract foreign capital. For instance, some Latin American states offer immigration benefits in return for a minimal bank deposit. The most popular destinations appear to be New Zealand, Australia, Canada, and the U.S. This, despite the fact that the immigrant investment schemes of these countries are considerably more costly than those of their Latin American counterparts.
The programs of New Zealand, Australia, Canada and Singapore require a minimum investment amount. All four countries use weighted point systems, which attempt to measure investor suitability. The criteria for the award of points differ from country to country. What is common to the first three, is that some points are allocated for investment and the rest hinge on other variables specific to that country, for instance, business experience, education and language skills, age, and personal ties to the specific country. The fourth, Singapore, is primarily driven by money and investment.
New Zealand, for example, offers several simple business and investment programs. Generally, applicants either demonstrate their work experience or make a direct investment in New Zealand. There are various types of investments to choose from, and you must provide evidence that monies were the direct results of your own labors. You receive points for the amount of your investments, and special investment programs begin from NZ$ 500,000 (+/- US$ $600,000), with larger investment amounts potentially leading to a fast track to citizenship. 
Once you have New Zealand citizenship, you also have a legal right to reside in Australia. Since 1973, the Trans-Tasman Travel Arrangement has allowed Australian and New Zealand citizens to live and work in each other's country, without restrictions.
The Australian residency scheme resembles New Zealand’s. Applicants can invest different sums, commit their monies for three years into designated Australian state-sponsored bonds, show a net worth of at least 50% more than their investments, provide evidence of a business or investment record that has been successful for at least three years, and receive points based on the value of their investment, as well as other criteria. Investor programs begin from AU$ 500,000.  
Until recently, Canada had a flexible, relatively straight-forward program. Then it changed. As a result, all that currently remains of the Canadian program is investment in provincial government funds. Canada recently proposed rules requiring its citizens and permanent residents to report all assets held abroad. The proposed Canadian tax regulations will require the reporting of assets held in overseas trusts. Many Canadians already avail themselves to rather generous Canadian trust provisions to shelter assets held abroad. Although this reporting requirement imposes no additional taxes, the obvious implications have caused consternation to some potential candidates. 
In 2012, Singapore ended its program that allowed high net worth foreigners to ‘fast track’ permanent residency if they kept at least S$10 million (+/- US$ 8 million) in assets in the country for five years. The change was aimed at slowing the rapid surge in property prices that have rankled Singaporeans. Today, Singapore still allows high net worth individuals to obtain permanent residency, but instead, they have to invest S$2.5 million (+/- US$ 2 million) in a new company or business. And these rules may tighten again soon. Singapore now leads the world in millionaire density: 15.5% of all its households are millionaire-households, with foreigners and permanent residents now making up a third of the population. 
Are you already entitled to another citizenship?
No one knows for sure how many Americans are also citizens of other nations. No one keeps track. Estimates range from 500,000 to 5.7 million people, or somewhere in between.
International attitudes toward dual citizenship vary. Some nations forbid it. Some encourage it. Most - like the United States – officially deplore it, but tolerate it. In all, 93 nations permit dual citizenship in one form or another.
It’s also estimated that about 40 million Americans are eligible for dual citizenship in another country, usually because of family ties. Legally, dual citizenship is clearly available. This right was confirmed in 1967 when the U.S. Supreme Court struck down U.S. laws forbidding dual citizenship. But political changes to citizenship rights in the U.S. are currently at hand.
For those readers who are interested in rights of dual citizenship, the historical development of the right, and the path we are heading down for the future, there is considerable planning information on these topics in the new 2nd edition of Offshore Living & Investing. I have also included a list of countries that allow dual citizenship, and those that don’t.
Beware double taxation
Once last point. While you still continue to maintain current citizenship, after you make a move to a new country, you also need to consider the tax implications in both your newly adopted homeland and at home. This is particularly true for U.S. citizens whose U.S. tax obligations follow them everywhere, and forever. Jumping from the frying pan into the fire is never a good result.
Is there a way to avoid the double tax problem?
Yes, with proper pre-migration planning this can often easily be accomplished. However, too frequently expats completely ignore the pre-planning tax aspect before moving offshore, get hammered with double taxation, and some even returning to their home jurisdiction in frustration. The best option is to avoid these tax problems, as is also outlined in the book. 
If some 200,000 Americans per year leave the U.S., so can you. The world population today is indeed increasingly mobile, notwithstanding new draconian laws at home to hinder the free movement of people and property.
Giving up your U.S. citizenship?
Finally, if your ultimate objective for obtaining a second citizenship is to give up U.S. citizenship to stop paying U.S. taxes, that presents a new set of issues. There are specific U.S. tax laws enacted over recent years to discourage U.S. citizens from expatriating for tax reasons. Previously, if your assets and/or income were over a certain level you would continue to pay income taxes on certain income into the future. But this too is evolving, as covered in more detail in Offshore Living & Investing, 2nd edition.
Giving up U.S. citizenship to avoid all future tax obligations can be a successful strategy, but it depends on the planning you implement today, as well as your assets and income levels. Advance planning to work around renouncing U.S. citizenship can help make this objective easier to overcome tax issues. And yes, the latest planning techniques are also covered in the 2nd edition of Offshore Living & Investing.

Second edition upgrade

For those that own the first edition and want to keep up on the latest, we are offering a special edition upgrade at a substantially reduced cost of only $15, plus shipping and handling. Follow this link to the new table of contents. If you are interested in the upgrade, email me from this link with your name and the approximate purchase date, and I’ll send you directly to a link to upgrade to the new 2nd edition.

I’m confident that all readers will find great value in the 2nd edition of Offshore Living & Investing, Planning Strategies for the Sovereign Individual.
And drop me an email if you wish to know more, or to look closer at your personal situation.
Until next time…..
David A Tanzer, Esq.
JD, BSc, Ph.D (Hon)
For more information visit or email to David is the author of “How to Legally Protect Your Assets” and “Offshore Living and Investing.”
David A Tanzer & Assoc., PC.

Vail, CO USA:
Tel. (970) 476-6100
Fax (720) 293-2272
Auckland, New Zealand:
Tel. (64) 9 353-1328
Fax (64) 9 353-1328
Brisbane, Australia:
Tel. (61) 7 3319 6999
Fax (61) 7 3319 6999
(Licensed to Practice Law in U.S. States & Federal Courts; Assoc. Member Auckland, N.Z. District Law Society - Foreign Lawyer; & Assoc. Member Queensland Law Society, AU - Foreign Lawyer)
The comments herein are not intended to constitute a legal or tax opinion regarding any specific legal or tax issue as additional issues may exist; does not reach a conclusion with respect to any specific legal or tax issue addressed herein or any additional issues not included; and cannot be used for the purpose of avoiding legal or tax obligations or penalties with respect to issues in or outside the scope of matters discussed herein.

(c) Copyright by David A. Tanzer & Associates, P.C. All rights reserved. Except as permitted under the United States Copyright Act of 1976, as amended, and pursuant to the laws of all countries, no part hereof may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, electronic or otherwise, without the prior written permission of David A. Tanzer & Associates, P.C. Reprint in whole or part strictly prohibited unless prior written permission is granted. International Copyright protected under the Berne Convention, Universal Copyright Convention  and laws of all other Copyright protected countries, and consistent with the World Trade Organization TRIPS.
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