Oxstones Investment Club™By Nick Giambruno, International Living
If you believe that spreading your political risk beyond one jurisdiction is the single most important thing you can do today, then obtaining a second passport and citizenship in another country is a critical part in achieving your goal.
This is because it’s a fundamental step toward minimizing the political risk of being subjected to the whims of any single government.
The political diversification benefits that come with obtaining a second passport are universal and prudent for anyone in the world to obtain…especially those under a desperate (fiscally or otherwise) government.
Here are the top six reasons why everyone needs a second passport.
Reason #1: More Internationalization Options
Obtaining a second passport can literally open the door to a world of internationalization options for your assets and income that are off limits to citizens of certain countries. This is especially true for Americans, who are often treated as if they have the plague when they attempt to open foreign financial accounts and are increasingly being forced to close the ones they already have.
Due to the ever-growing pile of regulations, foreign banks and brokerages are making the logical business decision that the costs of compliance outweigh any benefits of having Americans as clients. Opening a foreign financial account as an American citizen ranges from being impossible to very difficult in most circumstances.
Obtaining a second passport can also make purchasing real estate in foreign countries easier. For example, while it is an excellent place to consider for a bolt-hole, Switzerland is a notoriously difficult place for a foreigner to purchase real estate. However, certain foreigners (like EU citizens) have fewer restrictions imposed on them than others.
Reason #2: More Visa-Free Travel
One characteristic of a good passport is how much visa-free travel it allows. Applying for a visa that has to be approved before your trip (as opposed to being able to obtain it at the border) is a real hassle. Having to jump through hoops in advance of a trip can be a frustrating, time-consuming, and costly process.
Brazil, Chile, and Argentina all collect a visa fee (of about $160) from travelers who present a U.S. passport.
According to a recent study, Finnish and Swedish passports offer visa-free travel to the most countries. Not surprisingly, a country like Afghanistan has one of the least useful passports. (In the Going Global 2014, we’ll introduce you to the most practical places to get a second passport depending on your situation. Find out more here.)
Reason #3: Avoid Foreign Policy Blowback
If your home government has developed a bad habit of sticking its nose in the internal affairs of other nations, it could make you a target should you happen to be in the wrong place at the wrong time.
There are, of course, passports that have minimal foreign policy blowback risk. For example, when was the last time you saw Swiss passport holders targeted?
Reason #4: Preempt Travel/People Controls
A second passport can also come in handy if passport restrictions or other types of people controls are implemented.
That is to say, it prevents your home government from basically placing you under house arrest by revoking or cancelling your passport for any reason it sees fit.
The Syrian government, for example, previously refused to renew the passports of Syrians abroad whom it suspected of being associated with the opposition. This is not surprising and should have been completely predictable. Any government could and would behave in a similar manner as they all have the ability to revoke the citizenship and/or passport of their citizens at a moment’s notice under any pretext that they find convenient. Just look at how the U.S. cancelled Edward Snowden’s passport by fiat.
The bottom line is that if you hold political views that the establishment of your home government does not like, don’t be surprised when they decide to restrict your travel options. In this case, having the political diversification that comes from having a second passport is even more important.
Reason #5: You Don’t Have to Live Like a Refugee
It’s like how the old Tom Petty song goes… “You don’t have to live like a refugee.”
Having a second passport ensures that you will always have another place to potentially call home, another place where you will always have the legal right to live and work. In worst case scenarios, a second passport guarantees that once you get out of Dodge, you won’t have to live like a refugee.
Having citizenship in another country gives you the legal right to live and work there and possibly other countries. EU citizens have the right to live and work in the 28 member countries.
Reason #6: Renunciation
In all likelihood, you will need a second passport should you decide to take the drastic step of renouncing your citizenship. This allows you to reap huge tax and regulatory benefits if your home country burdens its citizens with suffocating and inescapable tax policies.
Of course, few will actually follow the path of Facebook co-founder Eduardo Saverin or singer Tina Turner and take the extreme step of renunciation. And you certainly don’t need to. There are many other ways you can internationalize and reduce your political risk.
Not Easy, But Necessary
Unfortunately, there are no paths to obtaining a legitimate second passport that are at the same time fast, easy, and inexpensive.
However this does not diminish the necessity of doing so. Political risk is growing in most parts of the world (especially the West). This is especially true for countries in deteriorating fiscal health, which will predictably turn to increasing measures to squeeze their citizenry for every penny they can get away with.
You might have noticed there is a lot of misinformation and bad advice out there regarding second passports, which, if followed, could likely end up causing you significant problems and limiting your options. Your goal should be the opposite: minimizing your problems and expanding your options.
It is essential in these shark-infested waters to have a trusted resource like Going Global 2014, a comprehensive, 135-page guide from Casey Research. It’s packed with actionable advice from renowned experts on the best countries to obtain a second passport in and how to do it…international gold storage…opening foreign bank accounts and IRAs…second passports and living abroad…the best foreign currencies to invest in…and much, much more.
Tags: foreign banks, foreign financial accounts, internationalization, passport restrictions, political risk, real estate in foreign countries, renouncing your citizenship, second citizenship, second passport, useful passports, visa free travel