Unfortunately, it is not so easy to obtain a second passport, and many people have a rather vague and simply wrong impression of the procedure. This article will cover 6 most common myths.
Misconception 1: Just paying is enough to obtain second citizenship by investment
It is a quite common myth among rich investors who think that they can simply buy a second passport by contributing a good sum of money into the economy of the country.
What other requirements must be met to obtain second citizenship?
Nowadays, even small Caribbean countries conduct thorough due diligence checks though immigration and tax authorities, international law enforcement organisations and sometimes even private companies. Your application can be rejected if you have similar refusals in other countries, large debts or felony convictions.
The requirements for investment sources deserve separate consideration. There is another common misconception that immigration authorities do not care much about where the investment money comes from. However, even in the UK that has a favourable immigration legislation you will have to keep your money in a bank account for 2 years prior to the application for second citizenship if you can’t reveal the source of this income.
Tips for obtaining second citizenship
It is not enough just to make the required investment if you want to obtain second citizenship. Before applying for a second passport, you must ensure that your business and reputation are in order and open a bank account for your future investment fund beforehand.
If you choose Caribbean citizenship by investment program, the whole process of obtaining second passport won’t be a hassle since according to the rules you will be able to submit your application only though an authorised advisor. Imperial & Legal will help you to prepare for a due diligence check, and if it reveals any inconsistences, they will advise you on how to correct them.
Misconception 2. You do not have to make large investments to obtain second citizenship by investment
Of course, some conflict-stricken poor countries won’t require large investments. For them, any investment will do, and the authorities will eagerly “draw” a second passport for you. But the Internet advertisements promising European citizenship for only € 50,000 are 100 % fake.
EU residence permit and citizenship
If you need an EU passport only to travel to Europe for lower prices, you can take part in an investment program that costs less. For example, Latvian golden visa program.
EU citizenship costs at least € 1,150,000, and you won’t be able to recover most of the money. It is the minimum investment requirement for a single investor in Malta citizenship by investment program.
Each Caribbean citizenship by investment program gives the same investment opportunities as EU program but costs less. Minimum investment that is required in this region starts from $ 100,000 + due diligence check fee.
To avoid frauds, you should trust only to authorised agents who have a government license. The full list of authorised agents is usually published on the official websites of Caribbean countries. There you can also find information about the costs.
Misconception 3. Investor can obtain the second passport of any EU country
Everything depends on the situation. In theory, you actually can obtain EU citizenship if you have lived in that country from 5 to 10 continuous years. But for this you have to be granted a residence permit that will allow you to stay in the country for so long. Unfortunately, there are no quicker ways to get British, French, Austrian, German or Belgian citizenship.
If you want to obtain EU passport quicker, you should choose the country whose economy requires an investment the most. Currently, the list of such EU countries includes Malta and Cyprus.
Cyprus citizenship by investment program allows to get a Cyprus passport in 6 months for an investment of at least € 2,150,000.
You can obtain Malta passport in 1 year. Minimum investment amount range is € 850,000 – 1,150,000 + additional government fees.
Misconception 4. Second passport grants a residence permit only in the country that has issued it
Another common myth that prevents thousands of people from taking part in citizenship by investment program is that you can’t use your Malta or Cyprus passport to live in another EU country.
In reality, the EU citizens can choose for residence any EU country they like.
After a simple registration, Malta or Cyprus passport allows to stay and live in any of 27 EU countries.
Caribbean passport gives you the right to stay in Europe for up to 90 days in a row and up to 180 days in the UK.
Misconception 5. Second citizenship means tax residence
On the one hand, a lot of potential immigrants fear that after they get the second passport, they will have to pay taxes at the European rates.
On the other hand, some investors want to benefit from the Caribbean flexible taxation regime, but they do not understand that obtaining second residence is not enough for it.
In reality, you will have to pay taxes on all the income that you earn in the country of your second citizenship no matter whether you are a tax resident or not. In most countries to become a tax resident, you will have to spend there at least 183 days of the year.
How to become a tax resident
It you want to benefit from tax exemptions, for example, no income tax regime in St. Kitts and Nevis, you will have to stay in the country for half a year.
If you don’t want to pay high European taxes, you just need to know when exactly you are to become a tax resident. Since it depends not only on the time you spend in the country, but on some other criteria, it’s worth to consult an experienced advisor.
Misconception 6. Investment into real estate under citizenship by investment program is not profitable
In most countries that have citizenship by investment programs, purchase of a real estate is considered as an investment. In some countries, it is one of the requirements. Houses, plots of land and flats can be sold in several years to recover most of your costs. You must only choose the right property that won’t lose in its price.
Conclusion: Buying property abroad, you can minimise the risks if you choose and manage it wisely. Our advisors will help you with this. Our company adopts a complex approach and pays the closest attention to the interests of our clients.
There will be no use considering these misconceptions if you attentively choose citizenship by investment program, make your investment wisely and know tax legislation well.