A passport is a powerful tool for global mobility and a good passport helps people grow in the right direction. A good second passport is a blessing as it helps achieve personal goals, i.e., travel freedom, business expansion to new markets and living in a dream destination. The other side is that a poor passport can impact negatively on the life of a person due to poor mobility. So, people opt for second citizenship, where they feel valued and empowered. Here are the top 5 ways a poor passport can impact your life negatively:
1. Second Passport and Tax Liabilities
A second passport from a powerful country seems to be a blessing but what about tax liabilities? A US passport is a dream for millions of people, but it seems like a blessing in disguise due to tax policies. The worst thing associated with a US passport is tax policies for its citizens, no matter where they live. Though the new Gold Card by the Trump administration is a new hype, the high tax rates for US citizens push Americans to renounce US citizenship.
Countries like China, India, and France are considering taxing their citizens just like the US government did. Governments consider taxing resident and non-resident citizens as a tool to increase revenue and reduce debt. Having a wrong passport means a lifetime tax burden even if you don’t live in your home country.
Passports to Avoid Due to High Taxes
- US Passport
- China
- India
- France
Ideal Passports to Consider Due to Low Taxes
- Portugal
- Latvia
- Hungary
- UAE
- Caribbean Passports
2. Invalid Travel Documents
Imagine you board an international flight and immigration authorities void your passport, and you are now on no-man's land. People from Russia and Belarus have faced this in recent times for political reasons. The same is the issue with people from Iran, China, North Korea, and Afghanistan. Always ensure that the passport you are considering is not included in the banned list by governments or governing bodies.
3. Ban on Dual Citizenship
Some countries allow dual citizenship for their citizens; however, some countries hate it by questioning loyalty. Countries that ban second citizenship include China, Qatar, Singapore, Japan, Saudi Arabia, Indonesia, and others. Sometimes, governments ban dual citizenship due to involvement in activities that are not in the best interest of a country. Further, there could be a change or shift in policy. This is the situation where you have to select either the passport of the country where you were born or a second passport of your choice.
Countries that Allow Getting a Second Passport
Around half of the countries allow people to get a second passport or become a dual citizen. These countries are known for relaxed policies when it comes to getting a Plan B passport. Easy countries to get a second passport by investment include:
4. Ban on Exiting a Country
Imagine you invested in a second passport due to its mobility power and as an escape route; however, the government of your second country of residency banned you from exiting the country for some reasons. This could also be the case with your home country. Be careful when choosing a 2nd passport and consider the current political scenario of a country, its relationship with neighbors and world etc.
Consider Russia or Belarus in the current world order, as dozens of countries have banned citizens from these countries. So, there’s no point in getting a second passport from such a country if your aim is mobility and business expansion.
Countries with Easy Entry and Exit
Countries offering their passport to investors have easy entry and exit requirements. Further, some countries don't even require a visit during the citizenship process. Citizenship interviews can be arranged virtually to assist people, while second passport collection can be done through consulate in a country where investor is residing, i.e. UAE, Turkey or others.
5. Wealth Tax and Exit Tax
Be careful when renouncing citizenship, as it could cost you a fortune. Renouncing the US citizenship could result in an exit tax for people having assets of 2 million USD or more. The parliament of the Netherlands is working on implementing the exit tax on high-net-worth individuals renouncing Dutch citizenship. Norway introduced a wealth tax for millionaires, but that resulted in losing 5000 HNWIs. Norway millionaires choose second passports despite Norway’s passport ranked 4th best in the world with 188 visa-free countries.
6. Airport and Border Flagging
People holding passports of some countries taken for secondary screening at airports and during immigration checks. This includes people from Iraq, Syria, Nigeria, and some countries from Africa and Latin America. That means a passport from some countries is taken as a red flag in the eyes of others due to political differences.
7. Annual Wealth Reporting
Some countries require declarations of your worldwide income, assets, real estate purchase, crypto, bank account details, and gifts. Whether you are a resident of that country or a non-resident citizen, the law requires you to submit the annual wealth report. Non compliance will result in consequences, i.e. citizenship renouncing, blacklist, fines or criminal proceedings.
Conclusion
Above are some of the scenarios from the real world associated with citizens from specific countries. If you are planning to get a second passport, you should consider these factors and do a detailed analysis of your own, keeping in view your profile, needs, and requirements. Alternatively, you can ask an experienced and reliable immigration consultant to help you pick the best passport tailored to your needs. Clearly state your objectives for getting a second passport and what the path to follow would be.