More people than ever are seeking second passports, but growing insecurity is rapidly closing doors
The prospect of hassle-free travel and the opportunity to pay less tax have long encouraged the world’s wealthy to acquire new passports. Some long-term US expats are even choosing to give up American citizenship to avoid double taxation.
Agents and intermediaries who facilitate such applications say the number of countries offering second-passport schemes is on the rise.
Says Veronica Cotdemiey, CEO of Citizenship Invest, which has offices in Dubai, Hong Kong and Singapore, “We have clients from all over Asia, including Japan, Vietnam, Indonesia and China. There are numerous advantages to having a second passport, and their relative importance generally depends on where you come from.”
Same old, same old
This correspondent remembers the frantic search for British, Canadian or Australian passports in the run-up to the 1997 handover of Hong Kong to China. In this case, the objective for fearful Hongkongers was to have a back-pocket escape hatch in case Hong Kong “went to the dogs.” It was generally accepted that these people had little intention of participating in the national life of their new countries, much less actually living there—or paying any more tax than they legally had to—for any significant length of time.
With some exceptions, emigrants would stay just long enough to obtain an alternative residence before coming straight back home. New social phenomena emerged during this period. “Astronauts” were the principal breadwinners who remained in Hong Kong to keep the family business afloat and spent time on flights to Sydney or Vancouver to see their spouses and children, who were sitting out their time in “immigration jail” in their intended country of citizenship.
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New seekers
“Today there are also many who do not want to emigrate but want the security of a second citizenship, as in 1997,” says Cotdemiey. In other cases, they seek more freedom to work and travel. Typical clients can include those who spend all their savings in a second place—Palestinians, for example, who are often wealthy but without opportunity in their home country. A second category—and one that has grown hugely in the past few years—comprises others who cannot easily get visas or travel outside their country of origin, either for leisure or work. This would include Syria and much of the Middle East.
The third category consists of high-net-worth individuals who need more flexibility in terms of how they manage their wealth, and seek opportunities to structure and preserve it. And finally, some applicants are simply taking practical steps in case things go wrong. Many Chinese, for example, aim to secure their wealth by getting a second passport.
