Why do people obtain second passports or residency permits?
The reasons that those who are in a position to do so take second citizenship or acquire a residency permit abroad can be placed into 3 main groups:
- The possibility to travel freely
- Security reasons
- Asset protection and taxation considerations
Naturally, there may be numerous other reasons for economic emigration, but in 90% of cases at least one of these three main reasons plays a part.
- The possibility to travel freely. Citizens of many nationalities find their freedom of movement restricted in the international arena. This is particularly the case for those living in the third world, who are forced to apply for visas, if they wish to travel to the developed world. For a successful businessman this can be a serious restriction, as he has no option but to apply for visas for every country he wishes to visit, meaning form-filling, payments and endless queuing. Passports allowing visa-free travel resolve all these problems in one stroke, not only for the investor, but for all family members as well.
- Security reasons. Even today there are numerous countries or regions in the world where war is either being waged or could break out at any time. In this situation, nobody is happy to put the health and safety of their family at risk. A second passport or residency permit offers the holder the possibility to leave the danger zone at any time and relocate to a different country, protected from the dangerous consequences of an armed conflict.
- Asset protection and taxation considerations. The question of asset protection is partly connected to the previous point, as war may lead not only to danger for individuals, but also to the destruction of physical goods and assets. A second passport or residency permit can also help provide protection in this case. At the same time, asset protection is an important point of view for everyone, as dangerous situations can arise even if there is no threat of war in the country concerned. The main principle of asset protection is that it is beneficial for the person concerned to place at least part of their assets in another country, thus spreading or diversifying the risk. As personal income tax, as well as other taxes imposed on assets and capital gains, are extremely high in some countries, it is only natural for some of the wealthy to migrate towards those areas where these taxes are lower or even non-existent. Second citizenship and residency permits also provide excellent solutions in these situations.