ADVANTAGES TO A SECOND CITIZENSHIP
Dual citizenship or second citizenship refers to persons who hold citizenship in more than one country.
There are significant advantages to having a second citizenship:
Reduction of Taxes
Depending on where you reside, taxation policies differ. Some countries have little to no taxes, while others have high taxes. Some attach taxation to residency, others to citizenship.
United States
In the U.S., taxes are collected by virtue of citizenship. No matter where an American citizen resides in the world, he or she is required to pay taxes to the U.S. government.
Having a second citizenship, however, is not without tax benefits for Americans. Dual citizenship for Americans who reside abroad makes them eligible for the Foreign Earned Income Exclusion (FEIE) benefit. (Currently, second citizens may exclude their first $112,000 of income per household earner from U.S. taxation.)
Other Countries
Other countries base their taxation system on residency, not citizenship. In the United Kingdom, Australia, and Canada, for example, taxation is based on residency. With low or no taxes in some foreign countries, second citizenship can provide individuals and families with low taxation rates or no taxation at all.
Having a Plan B
In a world that often seems unstable, where governments often fall or decline into chaotic or unfavorable conditions, having second citizenship, or dual citizenship can be a safety net, an out, a plan B. Restrictions on freedom and excessively burdensome taxation policies may call for the activation of such a strategy.
Easier Travel
Having a passport in only one country is often a hindrance to traveling and conducting business.
Not all passports are alike. A first-tier passport, like those from most North American and European nations, is more amenable to travel and investment opportunities. Lower-tier passports, like those held by the Chinese and Israelis, can hinder travel with visa constraints and investment restrictions. (Those with Israeli passports are prohibited from traveling to the Middle East: A second citizenship can offer an Israeli the ability to do business in the Middle East.)
Secures Residence Privileges
A plan B relocation and migration strategy is prudent in this drastically changing world. Second or dual citizenship can secure lifestyle privileges and security when conditions become unfavorable.
For those looking to retire in a tax-friendly or benefit-rich nation, second citizenship is advantageous.
Those seeking citizenship by investment or hereditary with retirement in mind can secure second citizenship under current, favorable immigration and naturalization requirements, thus, avoiding future detrimental, unforeseen policy issues.
New Social Benefits
Some seek second citizenship out of a desire for better social benefits.
Many healthcare systems can be costly. The inability to meet medical bills can lead to financial stress and bankruptcies. Having second citizenship in a more favorable healthcare climate can alleviate such burdens.
Higher education can likewise be costly. Seeking lower tuition through the privileges that come with dual citizenship can be appealing.
Security and lifestyle comfort in retirement is also benefited from second citizenship. Having dual citizenship in countries with retirement benefits similar to Canada’s, for example, can be very attractive. Canada grants 65-year-old citizens who have resided at least ten years (since the age of 18) in Canada a monthly Old Age Security pension—irrespective of their work history.
New Business Opportunities
Second citizenships provide business opportunities. Some countries restrict business ventures or investments to non-citizens (e.g., Cambodia restricts foreign real estate purchases). If one is seeking to enter the Cambodian real estate market, citizenship is a must.
One may wonder, Why would I want to invest in a “non-first-world status nation”? The answer lies in the inherent unpredictability found in most countries: History has shown us that first-world countries can become “third-world countries,” and “third-world countries” can become emerging financial powerhouses. Having the foresight and the tenacity to jump in on emerging markets and nations through second citizenship privileges can be highly profitable.
Conclusion
Second citizenship or multiple citizenship is becoming more common as people seek to diversify their financial and personal lifestyle choices in an increasingly global, interconnected world.
Sources: Folger, Jean. “Dual Citizenship: Advantages and Disadvantages.” Investopedia. January 25, 2021. https://www.investopedia.com/articles/personal-finance/031315/advantages-disadvantages-dual-citizenship.asp; “What are the Advantages and Disadvantages of Dual Citizenship.” IAS. 2022. https://us.iasservices.org.uk/advantages-and-disadvantages-of-dual-citizenship/; “What are the Benefits of Dual Citizenship.” Nomad Capitalist. July 6, 2022. https://nomadcapitalist.com/global-citizen/benefits-getting-dual-citizenship/.
Reduction of Taxes
Depending on where you reside, taxation policies differ. Some countries have little to no taxes, while others have high taxes. Some attach taxation to residency, others to citizenship.
United States
In the U.S., taxes are collected by virtue of citizenship. No matter where an American citizen resides in the world, he or she is required to pay taxes to the U.S. government.
Having a second citizenship, however, is not without tax benefits for Americans. Dual citizenship for Americans who reside abroad makes them eligible for the Foreign Earned Income Exclusion (FEIE) benefit. (Currently, second citizens may exclude their first $112,000 of income per household earner from U.S. taxation.)
Other Countries
Other countries base their taxation system on residency, not citizenship. In the United Kingdom, Australia, and Canada, for example, taxation is based on residency. With low or no taxes in some foreign countries, second citizenship can provide individuals and families with low taxation rates or no taxation at all.
Having a Plan B
In a world that often seems unstable, where governments often fall or decline into chaotic or unfavorable conditions, having second citizenship, or dual citizenship can be a safety net, an out, a plan B. Restrictions on freedom and excessively burdensome taxation policies may call for the activation of such a strategy.
Easier Travel
Having a passport in only one country is often a hindrance to traveling and conducting business.
Not all passports are alike. A first-tier passport, like those from most North American and European nations, is more amenable to travel and investment opportunities. Lower-tier passports, like those held by the Chinese and Israelis, can hinder travel with visa constraints and investment restrictions. (Those with Israeli passports are prohibited from traveling to the Middle East: A second citizenship can offer an Israeli the ability to do business in the Middle East.)
Secures Residence Privileges
A plan B relocation and migration strategy is prudent in this drastically changing world. Second or dual citizenship can secure lifestyle privileges and security when conditions become unfavorable.
For those looking to retire in a tax-friendly or benefit-rich nation, second citizenship is advantageous.
Those seeking citizenship by investment or hereditary with retirement in mind can secure second citizenship under current, favorable immigration and naturalization requirements, thus, avoiding future detrimental, unforeseen policy issues.
New Social Benefits
Some seek second citizenship out of a desire for better social benefits.
Many healthcare systems can be costly. The inability to meet medical bills can lead to financial stress and bankruptcies. Having second citizenship in a more favorable healthcare climate can alleviate such burdens.
Higher education can likewise be costly. Seeking lower tuition through the privileges that come with dual citizenship can be appealing.
Security and lifestyle comfort in retirement is also benefited from second citizenship. Having dual citizenship in countries with retirement benefits similar to Canada’s, for example, can be very attractive. Canada grants 65-year-old citizens who have resided at least ten years (since the age of 18) in Canada a monthly Old Age Security pension—irrespective of their work history.
New Business Opportunities
Second citizenships provide business opportunities. Some countries restrict business ventures or investments to non-citizens (e.g., Cambodia restricts foreign real estate purchases). If one is seeking to enter the Cambodian real estate market, citizenship is a must.
One may wonder, Why would I want to invest in a “non-first-world status nation”? The answer lies in the inherent unpredictability found in most countries: History has shown us that first-world countries can become “third-world countries,” and “third-world countries” can become emerging financial powerhouses. Having the foresight and the tenacity to jump in on emerging markets and nations through second citizenship privileges can be highly profitable.
Conclusion
Second citizenship or multiple citizenship is becoming more common as people seek to diversify their financial and personal lifestyle choices in an increasingly global, interconnected world.
Sources: Folger, Jean. “Dual Citizenship: Advantages and Disadvantages.” Investopedia. January 25, 2021. https://www.investopedia.com/articles/personal-finance/031315/advantages-disadvantages-dual-citizenship.asp; “What are the Advantages and Disadvantages of Dual Citizenship.” IAS. 2022. https://us.iasservices.org.uk/advantages-and-disadvantages-of-dual-citizenship/; “What are the Benefits of Dual Citizenship.” Nomad Capitalist. July 6, 2022. https://nomadcapitalist.com/global-citizen/benefits-getting-dual-citizenship/.
