2 For an overview of these rules, see Chapter 3
3 A more detailed overview of this important aspect is given in Section 1.9
4 e.g. Swiss Insurance Partners, see www.sip.ch
5 e.g. the Netherlands with regard to extended inheritance tax for citizens even if they have left the country already and are residing abroad
6 E.g. 10 days in the UK or 30 days in Switzerland
7 E.g. Hong Kong, Singapore, Panama
8 For a good discussion of these issues, see Betten (1998)
10 Betten 1998
11 More recently France also introduced such a regime
12 E.g. Australia, Austria, Canada, Netherlands
13 As for example Mr Gaines-Cooper found out in a recent Supreme Court judgment in the UK
14 The authors would like to thank Swiss Insurance Partners, Zurich/Dubai/Hong Kong for their valuable input in compiling this chapter. See www.sip.ch
15 Société Civile Immobilière
2 Citizenship Planning
The term “citizenship planning” was created by Henley & Partners together with other pioneers like Marshall Langer and Steven Grey. Henley & Partners was the first firm to specialize in this unique field. In the last few years and to a greater extent since the dramatic events of 9/11, questions of citizenship, visa restrictions and freedom of movement have become more and more important for internationally active individuals and businesses.
Indeed, there are many reasons why you should consider becoming a citizen of more than just one country, and consequently hold more than one passport.16
2.1 Why become a citizen of more than one country?
Due to political or economic circumstances, citizens of many countries find it difficult to travel abroad and are confronted with strict visa requirements each time they want to enter a foreign country.17
But also 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 threats and other hostility.18
Moreover, even though the necessary visa may be granted to you, getting a visa 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.
Visa-free travel can also be obtained via a residence permit. For example, residence in any of the Schengen countries will offer visa-free travel throughout the Schengen Area of Europe. However, only a second passport and thus the acquisition of a second citizenship can guarantee the desired long-term visa-free travel.
If you cannot acquire or renew your passport in your home country, for example due to political instability, civil war, revolution or change of government, having another passport can be very useful, even critical. Even if you simply lose your passport, it may take some time until you can get a replacement, hence having another passport may be crucial.
There is a growing tendency in many countries to follow the lead of the United States in taxing even non-resident citizens.19 Citizenship also plays a role in some countries to determine whether you may still be deemed tax resident or domiciled (including the United Kingdom, Sweden, Germany, and others), and citizenship is one of the tie-breaker rules in most double-tax conventions. Alternative citizenship is therefore increasingly important as an effective tool for international tax planning.
Anyone who wishes to have the possibility to retire in a safe haven in the future can only fully secure this option if he or she acquires either permanent residence or citizenship of that country. However, even a “permanent” residence permit does not mean full security as it may be subject to renewal, revocation, or new conditions.20 Becoming a citizen is the only way to secure a life-long status and guarantees a secure and truly permanent alternative place to go to.
Generally as a national of two or more different states more planning options are available and you also enjoy more privacy in banking and investment.
Most importantly citizenship and a passport from a small, peaceful country can save your life when travelling in times of political unrest, civil war, terrorism, and other difficult situations. Many international businesspeople and important persons who are active worldwide consider an alternative passport as the best life insurance money can buy.
In an unsettled, ever-changing world, acquiring a second citizenship is a wise decision and an investment for the future. With any citizenship you acquire your spouse and children, and sometimes parents,21 may be included. Citizenship is for life and can be passed on to future generations.22 Depending on the other country or countries of which you are a citizen, there is often no need to give up your present citizenship while you enjoy the benefits of a second citizenship and passport.
2.2 Who is interested in a second citizenship?
People from all over the world and from a wide range of backgrounds are interested in multiple citizenships and consequently hold more than one passport.
Many of the wealthiest individuals and most internationally successful people hold more than one passport. In recent years, an increasing number of internationally forward-thinking entrepreneurs and investors have specifically acquired one or more additional citizenship(s) to diversify their personal exposure. They realize that not only their investment portfolio, but also their residence and citizenship