Economic
Citizenships / Passports:
Myths And Reality -
David S. Lesperance
BARRISTER
& SOLICITOR
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| In my article
"Your Passport Portfolio", I discussed the possible benefits of acquiring
additional citizenships/passports. It is worth clarifying that a
passport is simply the travel document a country issues to its citizens.
From time to time, some enterprising individuals have sold a product called
passports for non-citizens, for countries such as Panama and Uruguay.
These tidy little books do have a passing resemblance to the real passports
from these countries. Unfortunately, the buyers quickly discover these
documents are not acceptable for international travel, leaving them sadder,
wiser and substantially out-of- pocket. I hope that this paper will help
you avoid such costly mistakes.
Citizenships
(and then passports) can be acquired through a variety of methods including:
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birth in the jurisdiction;
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lineage (through
parents and grandparents);
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marriage;
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naturalization;
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religious affiliation
(i.e: law of return to Israel);
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meritorious service;
or
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economic benefit
to the country.
Some lucky souls
may be entitled to a lineage or religious affiliation. Others may have
the time and patience to acquire naturalization citizenships. The purpose
of this paper will be to review an increasingly popular product, the economic
citizenship/passport. |
Since being
called to the Bar of Ontario, Mr. Lesperance has been practicing exclusively
in the area of immigration and citizenship law. Prior to his call to the
Bar, he worked as both a Canadian Customs and Canadian Immigration official,
which gave him a solid practical knowledge of the issues, which port-of-entry
officials face. David Lesperance was instrumental in setting up the
Grenada Passport Program. His close relationship with officials in the
government of Granada insure that he can provide Grenadian citizenship
for his clients in a swift and efficacious manner.
To contact
Mr. Lesperance regarding a Grenadian passport - Click
Here - |
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MYTH 1:
ECONOMIC
CITIZENSHIPS/PASSPORTS ARE ONLY FOR THOSE WHO WORRY ABOUT TERRORISM
Thus far in
my career, I have been involved in the processing of over 200 economic
citizenships/passports. I have a fairly good idea as to what motivates
my clients. It is a popular myth that people, particularly Americans
who travel widely, acquire these documents to avoid being targeted
by terrorists.
The reality
a) Instead,
my clients have acquired them for the following reasons:
b) as part
of an expatriation tax plan, or, to solidify a claim of domicile of choice
(e.g. Americans and others who are subject to steep estate taxes);
c) as a viable
travel document (e.g. third world nationals who travel in the first
world for business);
d) as a type
of insurance policy in times of political strife (e.g. ethnic Chinese in
Indonesia, Gulf Arabs);
e) as an insurance
policy in times of personal strife (e.g. potential plaintiffs who could
have their passports seized during civil litigation); and
f) as a privacy
tool or to do business without the burden of their current nationality,
(e.g. Americans who wish to establish certain offshore entities or invest
in non-SEC approved securities).
Calculating
the costs & benefits:
a) As you
look into your options and think carefully about purchasing an economic
citizenship/passport, it is important to try and calculate the true cost
and assess its potential benefits.
b) If you
are acquiring an economic citizenship/passport for expatriation or estate
tax reasons, your accountant can help you place an exact dollar amount
on the benefit you will receive.
c) If you
are acquiring it as a travel document, you need to consider whether or
not it offers you the personal and business advantage of not having to
apply for visas. Or, will it also allow you to travel to places to which
you could not possibly acquire a visa if you travelled on your existing
passport?
d) If you
are acquiring the citizenship/passport as an insurance policy against political
change or personal problems; you must assess not only the likelihood of
an adverse event happening, but the devastating cost to you and your family
if such an event did occur. Remember, most of us will never experience
a house fire, yet we still buy fire insurance.
e) Finally,
only you can place a price on your privacy or the burden that your existing
citizenship/passport places on your life.
MYTH 2:
ECONOMIC
CITIZENSHIPS/PASSPORTS ARE ALL THE SAME, SO BUY THE CHEAPEST ONE
Another area
of confusion and misinformation is the actual cost of securing a proper
economic citizenship/passport. I have taken the liberty of attaching a
brief comparison chart of some of the current programs on the market. In
comparing the products that may be presented to you (a Yahoo search on
the Internet came up with over 200 hits on this subject), you must first
understand what is being offered. Then you can separate the wheat from
the chaff.
The Reality
Not all economic
citizenships/passports are alike although there are some common denominators.
The following are the steps I suggest you take in reviewing any program:
1) Ask for
all the marketing material including samples of the applications and a
clear fee structure. This gives you a chance to gauge the amount
of hype surrounding the offer.
2) Find out
exactly which country's citizenship/passport is being offered; do not settle
for "a West African country" or "a Caribbean nation". I am
constantly amazed that some promoters will try to extract a fee to confirm
my "interest", when they are not even willing to tell me this basic information.
Also be sure to ask for a copy of the country’s enabling legislation and
run from anyone who talks about "special discretion from a passport official".
This is a code word for bribery. Along with becoming entangled in corruption
of foreign official legislation; should you actually try to use such a
passport, you could land in jail in most western countries. Canada will
hand you a five year jail term (section 57(3) of the Criminal Code of Canada)
for simple possession of such a document.
3) Evaluate
the legislation and look at:
a) Nature
of status being given: Remember honorary citizenship is like a honorary
pregnancy. It does not produce the desired result;
b) Restrictions
on citizenship: Does it also grant you the right to reside in the country?
Vote? Acquire land?
c) Revocability:
While there will always be an ability to revoke the citizenship because
of treason or material misrepresentation, does the legislation allow for
the possibility that a future government could unilaterally revoke all
citizenships granted under the economic criterion?
4) Review
the pricing and compare it to other programs. If the program talks about
an "investment", find out what the return on the capital is and what the
likelihood is that the capital itself will be returned? One country actually
requires you to purchase a non-interest bearing, non-refundable bond. If
I give a country some money, get no return on it, and do not get it back;
it is a government fee no matter what the label. Try to evaluate your lowest
possible up-front cost, so you won’t have to factor in the risk of investment
failure, foreign exchange, opportunity cost etc.
5) Review
the visa- free travel list this economic citizenship/passport allows. This
should be done independently using a Travel Information Manual (TIM).
Borrow one from your travel agent or check out some of the various travel
agent software programs. Do not accept even a government-generated list
at face value. This is where most misinformation is given by promoters,
both inadvertently and on purpose.
a) Rather
than concentrating on the total number of countries offering visa free
travel, make sure the countries to which you will actually travel are on
the list.
b) Remember
that some countries require a visa from everyone (Australia) or almost
everyone (U.S). If a country you travel to often is not on the visa-free
list; you need to find out if acquiring a visa will be difficult or perfunctory.
6) Make sure
the promoter is approved by the issuing government to offer the program.
Make your own calls to the government in question to confirm the number
of passports this promoter has actually completed. Then, compare that figure
with the number the promoter claims. Although someone has to be a promoter's
first client, avoid being the pioneer case (they usually end up with arrows
in their back). If you do volunteer to be the pioneer case, ask for a discount.
7) Research
the process for replacement of passports. Given my earlier comments about
"passports for non-citizens", you should always make sure you secure a
properly registered certificate of citizenship along with the initial passport.
Your citizenship is for life. Your passport is for a finite period. Passports
will expire, be lost, or have the pages filled. You need to factor in the
ease and cost (including possible travel) of securing your future passports.
8) Ensure
that your monies are held in escrow, either in a lawyer’s trust account
or a formal escrow account with a third party bank. This requirement is
essential to ensure you do not lose your money and that the government
is motivated to act as quickly as possible to process your application.
There is nothing like the carrot of payment upon completion to motivate
a government. Many governments, however, will not even begin the process
unless they know that the money payable to them upon acceptance is in escrow.
9) Ask about
screening procedures. Are you acquiring the "passport of choice" of terrorists
and drug lords? What is the quality of the physical passport document?
If it is easily counterfeited then criminals may simply bypass screening
procedures and reproduce the passport. This may make the passport a suspect
document and you may find yourself under increased scrutiny at every border
crossing.
CONCLUSION
Economic citizenships
and their attendant passports offer many advantages to people. I have over
200 clients who would say it is the best money they ever spent. Their citizenships
are an integral part of a larger workable tax strategy. They enjoy the
freedom to travel when and where they wish without significant hassles.
In the global marketplace, this gives them a distinct advantage as they
pursue their business or personal objectives.
I hope you
will take time to look at your options, research carefully and consider
the personal as well as financial benefits of an economic citizenship.
It is an important step to contemplate but with the help of qualified and
experienced counsel working in tandem with your other advisors, an economic
citizenship can offer you the security and peace of mind you are seeking
to safeguard and enjoy your hard-earned assets.
For more
assistance go to - GlobalRelocate
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