How to Value a Second Passport
If you’re thinking about buying a second passport, here’s how to value that acquisition. Here’s how to select the best second passport for you and your family… how to price the citizenship and passport you’ll receive in exchange for your money or investment.
Note that this article describes how to value a second passport purchased on the open market. It’s intended for those who want guaranteed citizenship in 3 to 12 months. It’s not for those who can wait the typical 5 years as a resident (such as in Panama) or who qualify for a passport through ancestry.
The first step in valuing a second passport is to decide why you need it. Do you want an exit plan? To diversify your investments and maximize your global asset protection strategy? Do you already have a great travel document and want a backup passport?
If you’re a citizen of the U.S., UK, Canada, Australia, etc. then you’re probably looking to diversify your citizenship and hedge global risk. You already have a solid travel document and want a backup should something go wrong.
For American’s, many things can go wrong. For example, the IRS has begun to confiscate and refuse to renew passports of those who owe more than $50,000 to the IRS. For more on this, see: The IRS can refuse or confiscate your passport
If you’re looking for a safety net, then you might go with a low-cost option. For example, the Dominican Republic just launched a citizenship program focused on U.S. and U.K. nationals.
If you’re well beyond a safety net, and ready to expatriate, then you need the best second passport you can afford. If you want to give up your U.S. citizenship and get the IRS out of your life, you must have a passport in hand before you turn in your U.S. document.
If you’re a U.S. citizen looking to expatriate, you might read: What Happens to Your IRA when you give up US Citizenship / Expatriate?
If You’re Not From The USA
If you’re from China, India, Pakistan, Iran, an African nation, or any country with a lesser passport, then you’re hoping to upgrade your travel rights. You’re focused on the visa-free countries you can access with your second passport and should buy the best one you can afford.
If you don’t have a top tier passport already, you’re looking to move up the ladder. You will value a second passport by the number of countries it allows you to enter without a visa.
I should point out that it’s much more difficult to upgrade your passport than to buy a lesser one. If you’re from the U.S. or E.U., you’ll be allowed to buy into any country you like. If you have the cash and no criminal record, you’re golden.
If you’re from India or China, the burden of proving your good standing in the community and value to your new country is on you. Also, the fees charged by your agent and the government will be higher.
For example, a U.S. citizen can buy a passport in Dominica starting at $100,000 while a person from India will likely pay $165,000. If an Indian citizen has a residency visa for the U.S. or E.U., the process becomes a bit easier, but still more costly.
The reason for the increase is that it’s difficult to prove you have no criminal history from China or India… and proving this from Pakistan or Iran is twice as hard again. A U.S. citizen can provide an FBI report, which is universally accepted. No such report (at least, not one with the same reputation) is available from these countries.
The Travel Value of a Second Passport Based on Visa-Free Countries
When access is your primary criteria, you’ll want to buy the best passport you can afford. Here are my top picks and their respective price points.
If money’s no object, you can get a passport from Malta with an investment of €1 million with time to citizenship anywhere from 6-24 months or buy one from Austria for €2 to €4 million. These will get you visa-free into the European Union, Canada, and the United States. Malta and Austria are about the only passports for sale that give you visa-free access to the U.S.
If you’re not a Saudi prince or Russian oligarch, then you might lower your sites to the Caribbean. Most of these passports give you visa-free access to the European Union and make it easier to access the United States.
In my opinion, the best value in the Caribbean is a second passport from Dominica. Starting at “only“ $100,000 all-in for a single applicant, you get visa-free access to the E.U. and 140 countries in total.
For me, Dominica compares favourably to St. Kitts at 156 countries and a purchase price of $250,000 + $70,000 in fees. I don’t see much value in the 13 additional countries for St. Kitts, especially since they lost Canada a few years back.
Second Passport by Investment
If you want a second passport by investment, rather than purchase, I recommend St. Lucia. Here’s something really exciting. Up until May 11, 2020, you would need to invest $500,000 or $550,000 for 5 years in government bonds to receive your passport.
On May 12, 2020, due to the coronavirus, St. Lucia is offering their short term bond option for investors seeking a 2nd passport, called the ‘Coronavirus Bond‘ option. Rather than the minimum $500,000 bond, they have reduced the price in half at $250,000, with the same 5 year zero interest coupon.
Your investment is still guaranteed by the government and the island’s economy is still relatively strong. Legal and other fees in St. Lucia are typically $50,000 for a single applicant. This gets you a top passport with visa-free access to 145 countries.
Your principal will be returned at the end of the term. Depending on how you value the opportunity cost of tying up $250,000+ for 5 years, St. Lucia , with it’s half price sale, is a great deal for a 2nd passport.
Those are my recommendations for buyers focused on visa-free travel. Now here’s what I suggest for those who already have a top tier passport.
If you’re not planning to expatriate any time soon, then go for a low-cost backup passport. Buy a passport as a hedge against country risk. Buy a passport to maximize privacy, travel rights, and asset protection. Become a dual national on the cheap in case you need it one day.
Lowest Cost Second Passport
The lowest cost second passport is from the Dominican Republic. As time and cost vary from year to year, please reach out to us here to obtain current prices. The government is also planning to roll out investment options in the coming months, which should be at much lower price points than their competitors.
A passport from the DR gives you visa-free travel to only 65 countries. But, it will get you out of the U.S. should something go wrong, and into places like Colombia, Ecuador, Israel, Japan, South Korea, and Malaysia.
And a second passport from the Dominican Republic might just be a good “investment.” I hear that the government is in talks with the Schengen Region of the European Union. If the DR gets visa-free access to these countries, the value of the passport will jump to $150,000 overnight.
The bottom line on how to value a second passport is this: Identify your need, then decide how much to invest in the hedge or how much you can afford to upgrade your travel options.
Here is probably the most extensive ebook on Everything You Ever Wanted To Know About Eliminating Your Taxes, Protecting Your Assets And Regaining Privacy Over Your Life And Investments. It is called The Ultimate Guide To Going Offshore.
I hope you enjoyed reading this article: How to Value a Second Passport. If you have any questions, please contact our office HERE.
About The Author
Mikkel Thorup is the Director at EscapeArtist.com the oldest and largest offshore website in the world and hosts The Expat Money Show podcast. He is also the author of #1 Best-Selling book Expat Secrets on Amazon. Mikkel has spent over 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran. His goal is to help people just like you to generate additional streams of income, legally eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. Follow Mikkel Thorup on Twitter @ThorupMikkel
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