The wealthy are building “passport portfolios” of second, even third, and fourth citizenships in case they need to flee their home countries. According to Henry & Partners, a law firm specializing in high-net-worth citizenship, more Americans now have access to alternative housing or additional citizenship than any other nationality.
“America remains a great country and a great passport,” said Dominique Volek, head of private clients at Henley & Partners. “But if I'm wealthy, I want to avoid the level of volatility and uncertainty. Wealthy people understand the idea of diversification very well in terms of what they invest in. I have “It makes no sense to have nationality and residence in one country,'' as well as the ability to actually diversify that aspect of my life. ”
Recent high-profile examples of second citizenship include billionaire tech investor Peter Thiel, who added citizenship in New Zealand, and former Google CEO Eric, who applied for citizenship in Cyprus. Examples include Mr. Schmidt.
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Of course, wealthy people aren't packing up their bags and abandoning their American citizenship en masse. A relatively small number of Americans renounce their citizenship each year to declare a new home country, primarily because of the need to file taxes. The so-called “exit tax” required to renounce citizenship is economically prohibitive for most people, except the very wealthy. Wealthy people simply renounce their citizenship and declare a new one.
Instead, many wealthy Americans are shopping around for additional visas and citizenship programs to supplement their U.S. passports.
Henry said Portugal, Malta, Greece and Italy are the most popular destinations for Americans to obtain additional passports. Portugal's “Golden Visa” program allows visa-free travel in Europe and a path to residency and citizenship in exchange for a €500,000 (approximately $541,000) investment in a fund or private equity. It is especially popular because it offers Malta offers a golden visa for property investments of €300,000, which Volek says has become “particularly popular with Americans”.
“In Malta you become a European citizen and have full rights of settlement throughout Europe,” he said. “So you can live in Germany, your children can go and study in France, and you have the right to live, work and study throughout Europe.”
There are three main reasons for the increase in America's passport portfolio, or “domicile diversification.”Alternative passports would make it easier for Americans to travel to parts of the world that are less friendly to the United States
“Additional passports provide vital flexibility for American, British and Israeli nationals who suddenly find themselves unsure of their welcome abroad,” Henry's report said. “With increasing global instability, holding citizenship in another country, especially one considered more neutral or politically benign, is now a valuable backup or fallback option.”
Another reason is business travel, where a non-US passport is safer and more discreet in many countries. The report said U.S. business leaders could become targets of “grudges, hostages, and indiscriminate terrorism in the turmoil of a failed nation or in high-risk countries to which they need to travel for business purposes.” , the stakeholders range from hedging. – From fund managers meeting clients around the world to mining company executives visiting operational sites.
Using a second passport can also help with cross-border funds transfers and new domestic transactions.
Finally, some wealthy Americans simply want to live in retirement to be closer to family members living abroad or for lifestyle reasons in the new era of remote work. For some, U.S. politics is the driving force.
“We are all living in uncertain times, not just in the United States but in every country around the world,” Volek said. “No one knows what's going to happen next. What's really important is that we have not only Plan B in place, but Plans C and D as well.”
Globally, billionaire emigration is expected to reach a new high in 2024 as wars, government clampdowns on wealth and political uncertainty drive more wealthy residents to other countries. ing. An estimated 128,000 billionaires are expected to move to new countries this year, up from 120,000 in 2023 and 51,000 in 2013, Henry said.
The United States remains the largest destination for the world's billionaires, with a net influx of 2,200 millionaires in 2023 and 3,500 millionaires in 2024, Henry said. It is predicted.
China remains the biggest source of billionaire exodus, losing a net 13,500 billionaires last year.
“Wealth creation opportunities in the United States are unparalleled worldwide,” Volek said.
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