Dateline: Istanbul, Turkey
In the late 1930s, there was one escape hatch from Nazi Germany that few people talked about.
The program had the silent blessing of the United States government, who did not stand in the way of its existence.
And it helped more than 100 Jews flee eastern Europe for greener (and safer) pastures.
What was it? A Haitian passport.
In the days when Germany stamped “J” in the passports of Jews, any alternative was worth fighting for. Surprisingly, that alternative was from a poor country in the Caribbean Sea.
Haiti’s government made their passport available for sale for the grand sum of 3,000 US dollars (a bit less than $50,000 today, adjusted for inflation). European Jews didn’t need to visit Haiti in order to become naturalized citizens; bundles of 100 signed passports were sent to Europe by the Haitian government to anyone who could pay the price.
Today, of course, getting a second passport is a lot harder… and more expensive.
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Why is it harder to get citizenship?
Haiti was one of the world’s first modern economic citizenship programs, whereby investors — or cultural refugees — could make a one-time contribution to a foreign government in exchange for citizenship.
Belize, Ireland, Vanuatu (according to some reports), and a handful of other countries have previously offered such programs, but no longer do. Grenada used to have a citizenship by investment program and has now brought it back.
Even as more residency and citizenship programs come online, the prices for these programs increase and the requirements become more stringent. I get emails practically every day from people in Africa, the Middle East, and the CIS countries asking for help.
And, no matter what happens in their economy, wealthy Chinese and Russians still have plenty of money to do immigration planning. As with many other things in our global community, citizenship is a valuable commodity in the middle of a bull market with no end in sight.
It doesn’t help that developed countries like to play Whack-a-Mole with new programs that pop up.
Small Caribbean countries have felt pressure from the United States and the OECD to crack down on who can get a passport from their countries. For example, last year the US and Canadian governments lowered the boom on St. Kitts and Nevis for letting — wait for it — ONE Iranian into the country under their program.
Let’s look at a few examples of countries that are making it harder to get citizenship…
The world’s cheapest, legitimate citizenship by investment program will nearly double in price next year, in part due to the fact that Dominica’s passport now offers visa-free travel to Europe’s Schengen Area.
One of my friends in the business called me several weeks ago to inform me that the donation for a single applicant will rise from $100,000 to $175,000 in August 2016. The price increase will allow the country to maintain its status as the most affordable second citizenship, but not by much. If you’re interested in Dominica, now is the time to get started.
When Malta introduced their citizenship program with a $1 million price tag a few years ago, the European Union slapped it down. The only worthwhile fast-track citizenship by investment program in Europe now requires applicants to spend one year as residents in the country — and enter into a tax gray area — before becoming naturalized.
For those without a seven-figure sum to invest in citizenship, Malta’s economic residency program also released heightened requirements just to live there and take advantage of the country’s favorable tax policy within Europe.
For a while, Hungary was one of the most affordable ways to become a resident of Europe without starting a business. Unlike Portugal and Spain, which require the purchase of “Golden Visas” with a half-million euro price tag, Hungary offered instant residency and future citizenship with a 250,000 euro investment, plus a small fee.
As of this year, that investment has now increased to 300,000 euros, and I’m told it may go even higher and/or see higher fees involved. And as Hungary builds fences along its southern border to keep refugees out, sentiment towards immigrants isn’t exactly high now. I wouldn’t rule out the country legislating some sort of capital theft.
The more sane of Europe’s economic residency options, Latvia used to be an impressive bargain for residency. While residency in Latvia requires ten years for citizenship, the payoff is great as a Latvian passport is one of the best in the world.
However, the government more than doubled investment requirements last year, now requiring a 250,000 euro real estate purchase plus a 25,000 euro fee; The fee before the price hike was only a few hundred bucks. The minimum term deposit is now 300,000 euros.
Belgium still offers an affordable way to move to Europe… if you’re willing to start an active business. The cost of setting up a business as an entrepreneur in Belgium is still cheap: 12,400 euros in paid up capital, or potentially even less if you have a business partner to go in with you.
However, Belgium’s status as the easiest country to obtain residency in Europe ended several years ago. Until 2012, it was possible to obtain Belgian nationality after a mere three years of living there. You didn’t even have to spend all of your time in the country.
Now, it takes at least five years to become a citizen of Belgium. That’s still a very reasonable timeline for a relatively well-managed, low-tax (for some) country with one of the best passports on earth. However, it goes to show how naturalization timelines are almost universally getting longer, especially in desirable countries.
Several economic citizenship companies have long spoken of the ability to become an Austrian citizen by making an investment in the country. The investment amounts involved are usually in the mid-seven figure range.
However, the reality is that the Austrian government is very picky about who it naturalizes, and I hear that it is even pickier now. Applicants must wine and dine government officials and prove they can integrate well enough into society. Austria was never an easy country to become a citizen of, and I hear stories that suggest the option is all but off the table now.
I reported from Singapore earlier this year about the open secret among government officials: keep immigration numbers down. Obtaining temporary residence in Singapore is easy enough if you can demonstrate a track record of serious business success and are willing to pay yourself a taxable salary of at least US$100,000.
However, getting permanent residence has become an increasingly long and difficult process, with more rejections than in prior years. Plenty of US and European citizens have been denied for permanent residence — an important step prior to naturalization — after waiting a year or two for their answer.
If you’re willing to spend more than half the year in Singapore, rent an expensive apartment, pay yourself a high salary, and pay a lot of tax, it may be possible to become Singaporean in about ten years. That’s a far cry from the two years it used to take.
Uruguay allows anyone immigrating with a family member to become a citizen in just three years; if you’re single and alone, it’s five years. Uruguay offers an excellent passport that may get visa-free access to the United States later this decade.
The only problem is that Uruguay has made it substantially harder to become a naturalized citizen. One account shows that a couple that lived in Uruguay almost full-time was declined citizenship by a judge for not demonstrating ties to a local country club.
Uruguay is an affordable residency program that allows foreigners to live in one of South America’s wealthiest and most sophisticated countries by proving little more than self-sufficiency. Sadly, it is starting to tighten the screws on potential new citizens, especially those from Africa and the Middle East.
While the passport of the Dominican Republic (not to be confused with the aforementioned Dominica) is becoming more expensive, a little-known economic residency program has not been delivering as promised.
The DR allows foreigners with a decent-sized pension or $200,000 to invest in local real estate to become fast-track residents with the ability to apply for citizenship within only two years. Only several people I’ve spoken to have said it’s been a lot longer than two years, and they still have no citizenship.
Here’s the bottom line: due to greater demand, internal politics, and changing political winds, getting residency and citizenship in another country is becoming more difficult in many cases.
There are a few countries where it is getting easier to get on the citizenship bandwagon due to the currency crisis; Brazil, for example, has seen it’s real currency drop to new all-time lows, making the requisite investment there lower than before. But that doesn’t mean the citizenship process is any easier.
As I’ve said before, where one door closes, another will open. There are plenty of good programs available TODAY for entrepreneurs and investors alike. However, the landscape is always changing and, as I’ve mentioned, prices are almost universally going up.
If you’re looking to obtain a second citizenship, my advice is to get started sooner than later. As with starting a business, you’ll want to budget a little extra time to the naturalization timelines to account for bureaucracy.
However, getting in under the current rules will likely benefit you versus waiting a year or two when things may have changed.
Gain independence from your government.
Get our Freedom Seeker's Guide to Second Passports.