{"id":30311,"date":"2018-01-14T15:13:00","date_gmt":"2018-01-14T11:13:00","guid":{"rendered":"https:\/\/www.savoryandpartners.com\/?p=30311"},"modified":"2020-08-14T05:47:44","modified_gmt":"2020-08-14T01:47:44","slug":"second-citizenship-benefits-pitfalls-avoid","status":"publish","type":"post","link":"https:\/\/old.savoryandparnters.com\/blog\/second-citizenship-benefits-pitfalls-avoid\/","title":{"rendered":"Second Citizenship: The Benefits and the Pitfalls to Avoid"},"content":{"rendered":"

There has never been more choice or better value for those seeking the financial and personal insurance of second citizenship. But as the volume rises, the rules are getting tighter and the due diligence more thorough. Jeremy Savory, Founder and CEO, Savory and Partners explained the benefits and the pitfalls to avoid.<\/span><\/p>\n

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Twenty seventeen was a bumper year for second passport applications in the UAE. It is a growing industry in the Middle East that goes back 30 years, with a number of spikes, including when Iraq invaded Kuwait and the Arab Spring in 2011.<\/p>\n

The Facts<\/span><\/h2>\n

Last year saw an attempted coup in Turkey, rockets in Riyadh, Hariri\u2019s resignation, the war in Yemen, continued war in Syria, Iran sanctions renewed and a purge in Saudi. Qatar, which a year ago was riding high on the World Cup wave, is now a problem visa to have in your passport.<\/p>\n

The visa is not an issue. It\u2019s the fact that you are resident in a country that is blockaded and sanctioned by all its neighbours, hindering business, banking, travel, and general freedom of movement throughout the GCC.<\/p>\n

\"As<\/p>\n

Jeremy Savory, Founder and CEO, Savory & Partners<\/a>, heads one of the largest firms specialising in second citizenship services. He understands the need for business people in the region to look for security. He said: \u201cIf just look at the wider Middle East, there is significant insecurity and instability. And should you hold a passport from any non-GCC Middle East country you will find the number of countries that require you to have a visa to enter is greater than the majority of the passports in the world?<\/p>\n

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\u201cBut we also have clients from unaffected areas for different reasons. We have a lot of European clients who want to be more private about their financial affairs. We have had British nationals who have adopted children from another country and the children have had their passports revoked<\/a> by that country. South Africa is now under a lot of taxation, and people are wondering what is the value of their passport.\u201d<\/em><\/p>\n<\/blockquote>\n

Many of his clients are looking for protection against future events, and a document that allows them freedom of movement and freedom to do business around the world.<\/p>\n

Savory says: \u201cUnderpinning all of this is that it is an insurance policy. For the same reasons that everyone gets life insurance or travel insurance. This is exactly the same. It is like having a trust. Everything is protected. And this protection extends to your children. If you have a Syrian passport, your children will have opportunities in education and future careers limited by the travel document that they inherited.<\/p>\n

\"Grenada<\/p>\n

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\u201cThere are three basic reasons for people wanting an alternative citizenship. It is about financial security. Knowing that you can establish a business in another country and open a bank account for that business without prejudice. Second is freedom of travel. Knowing that whether you are Sunni, Shiite, Christian or Hindu. It doesn\u2019t matter. You can get to the country you need to visit for business or for pleasure. Then you have tax incentives \u2013 no one wants a <\/span>second passport<\/a> where they pay tax. These plans offer less or zero tax.\u201d<\/span><\/p>\n<\/blockquote>\n

Established Programs<\/strong><\/span><\/h2>\n

Savory & Partners offers assistance with applications to the seven countries that have established citizenship by investment programs<\/a>. And some are surprisingly well established. Savory says: \u201cThe first program was founded in 1984 in St Kitts and Nevis<\/a> and the second in 1993 in the Commonwealth of Dominica<\/a>. They did very well and raised great revenues.<\/p>\n

In the last five years, Cyprus<\/a>, Malta<\/a>, Antigua and Barbuda<\/a>, Grenada<\/a> and St Lucia<\/a> have all established clearly defined, legal programs. They looked at what was happening and realised that they could create another revenue stream, especially as Cyprus and Malta offer EU passports that attract a higher price. And there will be more in 2018 as well. These countries see it as another way to diversify their income from industries and services and given all 7 countries are tax-free jurisdictions it creates revenues that would otherwise come from taxes.\u201d<\/p>\n

\"Malta<\/p>\n

There are a number of other countries that are often mentioned when discussions of second passports come up, including other EU member states, but Savory does not encourage those who can afford the investment to consider these, as the legal structure is not in place.<\/p>\n

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He said: \u201cThere are residency programs where, depending on various criteria, you could get the passport. These include Austria, Bulgaria, Spain <\/a>and Portugal<\/a>. But these are not places where I can sign a contract with my client and say in wiring that I will get you the passport as there is nothing definitive in the law that would suggest it is guaranteed.\u201d<\/em><\/p>\n<\/blockquote>\n

A lot of countries have provisions that allow their government to grant citizenship in return for major contributions to society, culture and the economy. However, this discretion of the government is exercised extremely rarely. In countries such as Austria, there has to be a significant active investment. The foreign investor must make an extraordinary contribution alongside his investment, such as bringing new technologies to the country or creating a substantial number of new jobs. This may take up to three years, and the outcome is not guaranteed, as the application passes through several ministries for approval.<\/p>\n

Be Careful<\/span><\/h2>\n

It is an unregulated business, and shady offers abound for passports from various South American, Eastern European or African countries, taking advantage of corrupt regimes or underfunded governments. But without a contract to guarantee your investment, no receipts or legal paper trail, you could lose both money and passport or have your documents rescinded in the future.<\/p>\n

\"How<\/p>\n

So how does an investor looking to secure a safe second citizenship, decide on the right country for him and his family? It is a question of money, time and what suits your circumstances.<\/p>\n

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Savory explains: \u201cThe vast majority of clients would like an EU passport with visa-free access to most countries around the world<\/a> and the ability to live and work anywhere in the EU. The demand for EU citizenship and the benefits that it bestows on its holders mean they are also the most expensive and take longer to obtain.<\/em><\/p>\n<\/blockquote>\n

Malta <\/a>costs over a million Euros when put all together with the investment, the bond and the purchase or rent of real estate. Cyprus <\/a>is over Euro2 million. Both countries have residency requirements \u2013 Cyprus is six months and Malta is 12 months, although this does not mean you will have to remain in the country for that time continuously.<\/p>\n

Caribbean Citizenship<\/span><\/h2>\n

The Caribbean is more financially accessible, starting at around US$100,000, and has zero residency requirements apart from Antigua and Barbuda<\/a> which is just five days. The total processing time is three to five months. Most of the five Caribbean governments have recently dropped their fees, due to the rising competition in the market.\u201d<\/p>\n

Savory says: \u201cThere will be some introduced this year, with the same fully structured and legal programs. Some countries are working on it, but the EU ones will arrive slower, as they have to get ratification from the other EU member countries. When they do arrive they will be much more onerous. There will be more protocol and they will be more expensive.\u201d<\/p>\n

\"View<\/p>\n

The team is expecting a greater demand this year as global uncertainty continues. He says: \u201cOur office and our staff is the biggest in the Middle East, and we have a high volume of applications, but we are also very transparent. For the company to be Government authorised we had to jump through many hoops, the company and myself as owner underwent thorough diligence just like any citizenship applicant. I was investigated for over two months. I had to provide many, many documents to show that we and myself were clean. The next step was to prove we could bring the volume of applications but also demonstrate a very high application success rate.\u201d<\/p>\n

If Savory sounds confident in his abilities, it is because the team handles thousands of passports per year, with a rejection rate of less than one per cent.<\/p>\n

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\u201cWhen you apply for a second passport, you are either rejected or approved. If you are rejected, then there is something in your background that the government felt was the reason for denial. It is always advisable to consult with your citizenship agent<\/a> before applying and to be transparent in your application. Most of the rejections we have had, the client has subsequently confessed to hiding information from us and the government.\u201d<\/em><\/p>\n<\/blockquote>\n

Only One Shot<\/em><\/span>
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And this is where Savory sounds a very cautionary note, explaining that while there is now more choice, it is getting harder to successfully apply, and the effects of rejection can be widely felt.<\/p>\n

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He says: \u201cThere are more and more layers of control and due diligence and I\u2019m happy with that. Just like many other industries, there are not so ethical agents. A professional can look at your application and point you in different directions.\u201d<\/span><\/em><\/p>\n<\/blockquote>\n

But other things are happening. With the establishment of the Joint Regional Communications Centre in the Caribbean, if you are banned in one country that information is automatically shared with the other four. It used to happen that if you were banned in one place, some agents just took back your application, switched it around and applied somewhere else. That doesn\u2019t happen anymore. You now have one chance to make it happen \u2013 and if you are rejected in the Caribbean, then you have to find a million euros and apply for Europe<\/a>.<\/p>\n

\"Portugal<\/p>\n

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\u201cThe second scary thought is that if you have a visa rejection from any country that has <\/span>a visa waiver<\/a> agreement with the country you are applying for, you are ineligible to apply for citizenship. So if you go to apply for a visa for the UK<\/a> and you get turned down, straight away 80% of your options are gone, as the Caribbean countries have visa waiver agreements with the UK. These two things have only happened in 2017. They were not in place before.\u201d
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He concludes: \u201cThis is a great time to get a second passport as the cost of entry for such strong citizenships has never been lower, and thousands of people are doing so successfully and enjoying the benefits. There is more choice and the investments are becoming more competitive. But it is not straightforward, it is not easy, it is not guaranteed and it is harder than it has ever been. Make sure you think twice about who you use to help you and look for the accreditation to be secure\u201d.<\/span><\/p>\n

Our Availability<\/strong><\/h3>\n

We are available on every channel convenient for you.<\/p>\n