Is a second citizenship the new "must-have" luxury item for Americans?

Thought Leadership by Christopher Willis, Managing Director, Latitude Residency & Citizenship

As we review the reboot of the TV series ‘Sex and the City’ (SATC), which deals with lifestyles of New York’s elite, I am inspired by the way in which Carrie Bradshaw asks a question at the beginning of the episode. And so, in a nod to her style, I ask, ‘Is a second citizenship the new musthave luxury item?’

If we look at the US market, the answer is a resounding YES! Conversations over dinner parties or rounds of golf are not about which watch is on your wrist or which car you drive, but which passport is in your pocket?

The pandemic has reinforced the need for options and having a second citizenship is quickly becoming an essential component of a client’s portfolio. When travel bans were in full effect, US passport holders were not able to travel to many parts of the world, meaning their wings were well and truly clipped. They only had access to less than eighty countries. By comparison, a citizen of Antigua & Barbuda, one of the smallest nations in the western hemisphere, could access over 150 countries visa-free. The visa-free access of the almighty American passport paled into insignificance beside that of Antigua & Barbuda.

So why is the US becoming the hottest source market for residence and citizenship by investment applications?

Traditionally, there has never been high demand from the US, but the last couple of years has shown a significant shift in interest. As mentioned earlier, the travel ban was an important wake-up call and reinforced the idea that many people were not as prepared as they thought they were. Although this will self-correct, the need was identified, and people are taking action.

With so many concerns within the US, which remains a very divisive society, people are looking at overseas options. Americans are immensely patriotic, and as such, their conversations are not about renouncing their US citizenship but instead having other options if things are not to their liking in their home country. Whether political, economic (taxes) or social, the push factors are in place.

Obtaining a second residency or citizenship is not demonstrating that they are unpatriotic but merely enhancing their freedoms.

SO WHERE ARE THEY GOING?

THE CARIBBEAN

With a choice of five citizenship by investment (CBI) programmes, the Caribbean is extremely popular. Many Americans have visited the Caribbean and have a familiarity and affection for the region. Moreover, it is geographically close, giving easy access with a strong airlift for those who don’t possess their own plane.

Programmes are also very cost-efficient and the processing times are quick, especially in comparison to other jurisdictions. In the Caribbean CBI countries, there are considerable opportunities to invest in real estate as an investment vehicle. We speak to many clients who are familiar with investing in property in the US, so we suggest purchasing in countries such as Antigua & Barbuda, which offers some phenomenal real estate opportunities and the benefit of citizenship to boot.

Many investors are also purchasing real estate over the minimum investment level as they anticipate spending time on the island and are consequently buying for lifestyle reasons, not just for the investment.

The visa-free access of the almighty American passport paled into insignificance beside that of Antigua & Barbuda.

Although US citizens cannot benefit from tax residence programs, there are opportunities in Anguilla and the Cayman Islands for those who wish to relocate from hightax jurisdictions, such as Canada and the UK.

EUROPE

There are different attitudes to the European options. Portugal has been hugely popular thanks to a reasonable investment level and day-count requirements being very low; an average of seven days per year for five years is required before they can be eligible to apply for citizenship. Notwithstanding the need to learn basic Portuguese, it is a safe, long-term strategy with the option of full European Union (EU) citizenship at the end of it.

For those who wish to have the same result but with a more accelerated timeline, Malta is an obvious choice as the world’s number one citizenship by investment programme. Although the journey to full EU citizenship is much quicker, the downside is that the level of investment is higher. As with most things in life, you get what you pay for.

While there are other options in Europe, such as in Ireland and Montenegro, Portugal and Malta have been the clear favourites.

The United Kingdom always remains popular and is for those willing to commit the majority of their time to living in the country. The Innovator visa has been an attractive option for those looking for an alternative to the Tier 1 Investor. Interestingly, many in the UK have been looking at options in Europe, such as in Portugal, as they no longer enjoy the settlement rights they enjoyed pre-Brexit.

As the girls from SATC always seem to be setting the trend, I suggest they apply for a second citizenship and pave the way for the American elite.

ISSUE 12 • DECEMBER 2021

Christopher Willis

www.latitudeworld.com