The Global Residence & Citizenship Handbook. Christian H. Kälin

diversified to reduce risk.

      More than ever wealthy citizens are becoming a target for kidnappings, terrorism, and in some countries politically motivated violence. Wealthy people are at risk in insecure countries where organized crime is widespread, like in many South American countries, but also where they may be part of an ethnic minority group, or in regions with significant political upheaval like in recent years in the Middle East.

      Even if the home country is stable and personal security is not an issue, citizens of countries where the political and/or economic situation does not allow widespread visa-free travel for its passport holders are a further group where an alternative travel document offers great merits.

      Persons who travel frequently to countries requiring visas also need an alternative citizenship and passport. They may need to travel at short notice while they are waiting for such visas to be issued on their current passports, and often passports have to be sent to the relevant embassies or consulates and remain there, sometimes for several weeks, before being sent back. This also includes the risk of one’s passport being lost in the process and therefore having an alternative is critical if you wish to remain flexible with regard to international travel.

      As mentioned above, citizens of countries with an uncertain future 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. Unfortunately, many countries fall into this category; citizens of these countries cannot be sure about the political future of their home. Alternative options need to be secured in good time.

      Persons who value privacy when travelling, doing business or for banking and investment are interested to protect their interests and their personal data by using a different citizenship depending on where they operate and what they do. In times of widespread data abuse, identity theft and cyber crime, it is increasingly important to be able to protect one’s personal profile. Having more than one citizenship and passport can help achieve this.

Citizens who wish to have the option to renounce their citizenship must first acquire another citizenship; otherwise they would become stateless, which is a status to avoid at all costs.²³ There are many reasons why one may wish to give up citizenship, for example to legally avoid otherwise compulsory military service requirements or taxation.

Persons who were rendered stateless by birth or through accidents of history are in need to acquire citizen status of at least one country, in order to have the freedom of travel and other rights that citizens can enjoy. They may not be able to acquire citizenship by naturalization in their country of residence²⁴ and thus may need to immigrate elsewhere or acquire citizenship by investment. If you have no citizenship, the situation can be extremely difficult.

      Citizens of countries with high direct taxes may acquire alternative residence and citizenship as part of a strategy to reduce their tax liability. Citizenship may play a role in the determination of one’s tax domicile.

      Finally, anyone who wishes to have the possibility to retire in a safe country at any time in the future can secure this by acquiring citizenship of that country.

      2.3 How to obtain a second citizenship

      The principal grounds for acquiring citizenship are birth within a certain territory, by descent, marriage to a citizen, and grant of citizenship or naturalization.

The conditions under which the privilege of citizenship by naturalization is granted vary from country to country, but essential factors are usually family relationships or certain periods of residence, besides character, language and other requirements.²⁵

      Birth within a territory

      Nowadays relatively few countries grant citizenship to anyone who is born within their territory. The USA is the most important of those countries. The principle that citizenship is passed on by birth within a certain territory is called jus soli (“law of the soil”).

      If you know where you were born you can relatively easily find out whether you may have the right to another passport – or, in case of the USA, whether you may actually be a U.S. citizen and never filed tax returns and therefore need to consult urgently with a U.S. tax lawyer.

You can plan your children’s citizenship portfolio to a certain extent. If your children are born in a country that grants them citizenship either right away, or will make the acquisition easier later on, the right steps need to be taken prior to their birth.²⁶ Some countries faced significant birth tourism²⁷ and adjusted their laws to make it more difficult to just fly in and give birth. Countries which did not adjust their laws, like the USA, are trying to be restrictive in granting visas to pregnant women.

      Ancestry

      Many people may not be aware that they are entitled to an alternative citizenship by virtue of their ancestry. The principle that citizenship is passed on by descent is called jus sanguinis (“law of the blood”). Americans (and Canadians, Australians, etc.) in most cases have traceable ancestry in Europe. If the ancestry is not too far back, it may be possible for them to re-acquire the citizenship of their ancestors. For example many U.S. citizens are entitled to Irish, Polish and Italian citizenship due to the mass immigration from these countries to the USA in the early twentieth century. For example an Irish-born grandparent, or also a grandparent from Poland or Lithuania, may be the basis for a successful claim to Irish, Polish or Lithuanian citizenship and – as a result - to an EU passport. In Croatia, to reclaim citizenship it is sufficient to have proof of Croatian ancestry, no matter how far removed.

      Even though many countries have tightened their nationality laws, it is constructive to investigate the option, especially if one of your closer ancestors was born in another country. Dual or multiple citizenships offer numerous benefits beyond the possibility to take up residence in the country of citizenship (and in case of citizenship of an EU country, to have the right of establishment throughout the EU).

      Naturalization

For a person who cannot rely on the ancestral option there are residence and immigration options available to investors and wealthy individuals in numerous countries:²⁸ Canada, Australia, the United Kingdom, Switzerland, Monaco, Singapore, Hong Kong or the Bahamas are just a few examples of such countries which offer residence to wealthy individuals and investors.

      In this book, the most attractive countries where residence permits are available to investors and wealthy individuals have been highlighted. Thus the emphasis is not just on general quality of life, business and employment opportunities (in which case for example Australia or New Zealand would be among the immigration countries of choice), but specifically on factors concerning wealthy individuals, such as personal tax, privacy, personal security. The highlighted countries have also been selected with a view of citizenship planning and the possibility to acquire an attractive alternative citizenship with relative ease. All these countries are officially welcoming foreign persons who are willing to invest.

      Citizenship-by-Investment

There are, however, only three countries at the moment that legally offer citizenship-by-investment programs that do not require a specific period of residence in the country. These are Austria, the Commonwealth of Dominica, and St. Kitts and Nevis. Citizenship-by-Investment offers the opportunity to legally acquire new citizenship quickly and easily, without any disruptions to one’s life.