2020 and the events that followed opened many eyes to the control they are subject to in their home jurisdiction.
High-net-worth individuals were not immune from the grave privacy, migration, and financial violations made by governments across the world.
Since then – and rightfully so –, we have seen record numbers of wealthy investors and entrepreneurs obtain a second citizenship.
Why? To unlock unparalleled global mobility, financial diversification strategies, and a world of personal freedom.
But what makes a second citizenship more important in 2024 than ever before?
Learn why so many high-net-worth individuals have contacted JH Marlin to pursue a citizenship strategy now.
A Second Citizenship Offers Global Mobility
Travel Freedom and Visa-Free Access
An obvious benefit of a second passport is international travel.
Critical for business owners and global investors, this level of travel freedom is more than convenience – It is a necessity in 2024 and beyond. A robust passport portfolio offers more visa-free access to countries around the world.
For example, most assume the United States passport is one of the strongest. But Americans have visa-free access to 173 countries around the world while many European Union passport-holders have visa-free access or visa on-arrival in almost 180 nations.
And even more, no passport in the world lost more visa-free access to countries during the pandemic than the American. Down from 173 countries to just 86 at one point, according to Quartz.
That difference can be critical if an investor with American citizenship cannot gain access (physically or financially) to the country he or she desires.
But with a citizenship portfolio, investors get the cumulative, combined travel rights of all their passports. An investor with citizenship in the United Arab Emirates and Germany has access to each countries’ visa-free nations – 94% of the world’s nations – instead of one or the other.
More travel freedom means more personal and professional options.
Location Independence and Residency Rights
The internet changed the way we humans earn a living, communicate with each other, and advance society. But it was not until 2020 that remote work caught on as a legitimate possibility for many companies and individuals.
Now, it is not just a luxury benefit for technology startups and Gen Zers. Remote work has spread indiscriminately across industries and borders. Most high-net worth individuals have gotten a taste of full location independence, and they will never return to the “old normal.”
Mobility was important before remote work. But now, the allure of location independence cannot be overstated.
Second citizenship permits a far greater degree of movement for those who hold it. High-net worth individuals with a second passport typically receive expanded mobility rights if they choose to invest within a settlement bloc like the European Union (EU) or MERCOSUR (South America).
Imagine your family’s ability to live, work, access healthcare, and study across several nations – not just in your birth country or the country of your second citizenship.
In the EU, for example, citizenship in one member state opens doors across the union, allowing high-net-worth individuals to navigate between cultures, economies, and opportunities at their will.
While MERCOSUR is not exactly the same in terms of settlement rights in member nations, citizens in one country do get a fast-track to permanent residency in the others.
A Second Citizenship Permits More Financial Diversification
A second citizenship can include access to exclusive financial opportunities. Many countries offer unique banking and investment privileges, such as offshore bank accounts and heightened banking privacy, to their citizens but not to non-citizens or simple residents.
Why is this an important benefit to high-net-worth individuals? In the last few years, several Western countries have taken drastic steps to control the financial lives of their citizens. The development of central bank digital currencies, the freezing of bank accounts, and financial censorship of those who disagree with powers-that-be are all signs of societal degradation.
Where does this lead next?
Because high-net-worth individuals do not know what the future holds in their native country, this attractive banking right is invaluable for wealth diversification and financial security.
Legal Tax Reduction
As we have pointed out, it is impossible to predict the future 100% correctly. Therefore, simply because an investor’s home country is tax-friendly today does not mean it will be tax-friendly tomorrow.
In fact, if they have not already implemented such a system, many G7 and OECD countries are trending toward greater-than-50% tax structures to help pay down runaway debts.
This does not bode well for the future.
For that exact reason, many high-net-worth individuals are pursuing a second citizenship or tax residency in a no-tax or low-tax jurisdiction outside of their birth nation.
They have cracked the code and realized where they live is a choice.
JH Marlin has worked with North Americans looking toward the Caribbean and Latin America for territorial tax systems. Americans and Europeans are scoping out Middle Eastern and Southeast Asian jurisdictions to declare their tax residencies.
A mass migration of money and manpower is taking place.
The truth is – A strategically chosen second citizenship can lead to substantial tax optimization while, of course, complying with tax regulations in any and all countries they reside and/or work.
Note: International tax laws are extremely complicated. So consult with an expert in this field to ensure full compliance and legal tax optimization.
A Second Citizenship Safeguards Your Future
Minimizing Exposure to Government Overreach
In 2020, investors and entrepreneurs witnessed how rapid societal change can occur. This is true for so many Western countries.
Daily life transformed seemingly overnight.
For many high-net-worth individuals – no matter their nationality –, this was the tipping point. And JH Marlin worked with many to devise another plan forward.
When politics and the economy strongly shift and your best interests are no longer protected, Plan A goes out the window and Plan B demonstrates its value.
During that time, those with a second citizenship had more options …
- to navigate restrictions,
- to relocate and travel,
- and to protect their families.
And for the first time, many of our clients saw the benefits of a diverse passport portfolio.
Global mobility, in the form of a second citizenship, acts as a safeguard against what we saw in the beginning of the decade – essentially, wildly unpredictable political and social change.
A second citizenship is peace of mind.
Refuge from an Unstable Political Climate
Western society is experiencing some of the fastest pace change in history. For many investors and entrepreneurs, this is not all positive.
- More and higher taxes
- More government authority
- More regulations and red tape
- More financial and social censorship
- More mandates and control of daily life
In the United States, for example, Gallup reports an overwhelming 77% of Americans believe their country is heading in the wrong direction.
High-net-worth individuals with just one citizenship are tied to their home country’s direction – whether positive or negative. So no matter where they care for the current way of their jurisdiction, they are along for the ride.
While those with a second passport have free global mobility, an improved lifestyle, and a medium to optimize and diversify their finances in developing markets around the world.
Shifting politics, economic affairs, safety and security, and societal norms across the West have demonstrated the appeal of political and economic stability.
For thousands of high-net-worth individuals, the ability to relocate their family or themselves to a more stable, secure environment at the drop of a hat is priceless.
Investors and entrepreneurs no longer have to live where they work and earn.
A second citizenship is a strategic move toward freedom on measures like global mobility, financial diversification, and political stability.
This is why hundreds of high-net-worth and ultra-high-net-worth individuals have contacted JH Marlin to apply for and obtain their second citizenships for themselves and their families.
Waiting until the next global disaster to safeguard your future may be the difference in paying millions of dollars in taxes, losing the ability to leave your home country, and the perfect program closing before you have the chance to apply.