Having a second passport and dual citizenship has numerous non-tax benefits. It can expand your travel possibilities, reduce your profile to terrorists, give you the right to reside in other countries, and give you a way to cross international borders if your primary passport is lost or stolen. For Americans, a second passport has another benefit: it is an essential prerequisite to expatriation; i.e., giving up U.S. citizenship in order to permanently disconnect from U.S. taxing authority.

The most valuable passports are from countries that don't tax non-resident citizens on their worldwide income or impose exit taxes on long-term residents and on whose passport visa-free travel is available to many countries.

Almost every country has a program offering citizenship or passports to individuals with a family history in that nation. In Ireland, persons with at least one Irish-born grandparent qualify for Irish citizenship and passport. Many countries allow spouses of citizens to apply for citizenship and passport, usually after a specified period of residence. In Austria, the ordinary 10-year period of residence necessary to qualify for a passport and citizenship is reduced to six years if you're married to an Austrian citizen.

Your religion may also be a viable route to alternative citizenship. For instance, Jews who immigrate to Israel are entitled to Israeli citizenship and passport. Since Israel has compulsory military service, taking out Israeli citizenship may not be prudent for parents of teenagers and young adults.

If you don't qualify based on these factors, in most countries, you can acquire citizenship following a period of prolonged residence. Among other countries, Australia, Canada, Gibraltar, New Zealand, the United Kingdom and the United States exchange residence rights for domestic investment. Eligibility can also depend on age, education, life skills, health, and other criteria. In most cases, after continued residence for three to ten years, you can apply for citizenship and passport.

Residents of the overseas territories of some nations, notably the Netherlands and the United Kingdom, qualify for citizenship in the home country. For instance, individuals living in the Netherlands Antilles for a period of five years or longer may qualify for a Dutch passport. In certain circumstances, knowledge of the Dutch language is not necessary to qualify for Dutch citizenship.

A handful of countries offer "instant" citizenship in return for an economic contribution. The Commonwealth of Dominica, the Federation of St. Kitts & Nevis, and Austria are the only countries with an official, legally mandated, citizenship-through-investment program.

• Commonwealth of Dominica Under this country's economic citizenship program, you may acquire citizenship and passport in return for a cash contribution of US$75,000. A US$100,000 contribution entitles you, your spouse, and two minor children to citizenship. Legal, due diligence, and processing fees add approximately US$30,000 to the cost. Dominican passport holders can travel without a visa, or obtain a visa upon entry, to nearly 90 countries and territories. Travel to the United States, however, requires a visa.
• Federation of St. Kitts & Nevis Applicants for economic citizenship must invest US$350,000 in an approved real estate project. In addition, applicants must pay a registration fee of US$35,000 for a main applicant and US$15,000 for each spouse and dependent child under 18. Alternatively, applicants may contribute to the Sugar Industry Diversification Foundation. The cost for a single applicant under this option is US$200,000, or US$250,000 for an applicant with up to three dependants, and there is no registration fee. Legal, due diligence, and processing fees add a minimum of US$10,000 to the cost. St. Kitts & Nevis passport holders can travel without a visa, or obtain a visa upon entry, to more than 90 countries, but not to the United States.
• Austria It may be possible to obtain "instant" Austrian citizenship and passport after making a substantial investment in Austria. Only a handful of persons gain citizenship in this manner every year. However, this program is politically unpopular and it is increasingly difficult to obtain citizenship under this option. The Austrian program is fundamentally different from that of Dominica and St. & Nevis, in that you must make your investment first and then apply for citizenship. You don't get your money back if citizenship isn't granted. Generally, you must invest at least US$4 million to have a reasonable chance at qualifying, and pay additional legal fees of US$30,000 or more.

In all three of these economic citizenship programs, applicants must pass a strict vetting process that includes a comprehensive criminal background check.

An Internet search will reveal many companies offering to sell passports from countries that don't legally sanctioned economic citizenship programs. In recent years, passports from Costa Rica, Nicaragua, the Dominican Republic, Ireland, Lithuania, and other countries have been offered. All these offers are either scams or involve illegally purchased or stolen documents. Securing a passport on this basis, through fraudulent misrepresentation, either directly or through an agent is clearly illegal. Your passport could be revoked at any time and you could be subject to arrest and/or deportation.

The Nestmann Group, Ltd. can assist individuals seeking alternative citizenship and tax-advantaged residence. Please contact us for more information.

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