Dateline: Ubud, Indonesia
We often talk here at Nomad Capitalist about the idea of getting economic citizenship as a means to renouncing your US citizenship. We’ve even discussed several case studies of folks for whom renouncing would actually make sense. For these individuals it’s often worth it to do whatever it takes just to get a passport as quickly as possible so they can get out from under their tax burden.
Some are employees who cannot exempt their income, others have passive income that does not qualify for exemption, and still others have a unique personal situation that they can’t change. All of these situations leave the individual in a position in which they’re always going to be paying taxes to a country that they don’t live in.
I’m helping a guy do this right now who doesn’t spend any time in the United States and he’s paying a fortune because he’s making a lot of passive income from rents and other things. Someone in that situation — who’s paying a lot of tax and looks at his return on investment — may have to follow the logical path and see things from a business perspective, regardless of how they feel about their country.
It’s very sad, actually, because whether you like the country that much or not, it’s still a part of you. I can’t change the fact that I was born in the United States. And it’s a shame that US policies and government actions have given US citizens such a bad reputation in many places around the world (for instance, many of the best foreign banks refuse to open accounts for Americans). Add to that the fact that you have to pay tax no matter what you do and you’ve got a lot of people in a tough situation.
All of this just makes it very sad when you realize that people are thinking that they have to abandon the citizenship they were born with and all the privileges that supposedly come with it. But from a business point of view, it’s possible that they might say they need to get rid of it and need the fastest passport they can get.
That’s where the economic citizenship comes in.
Can I renounce on a Comoros passport?
Now, I’ve talked before about how I don’t think the Comoros is a country where you could comfortably renounce your citizenship (link). I have, however, talked about the belt and suspenders strategy (link) of getting a European residency permit along with a Comoros passport (or similarly lower tier passport), allowing you to renounce with both and have decent flexibility.
At the very least, you could get a Comorian passport and start with easy visas in places like Cambodia and Malaysia so you can get some stamps and build up the credibility of your passport. But even if you build it up, chances are you’re not going to renounce on your Comoros passport alone.
So, for me, the idea of having citizenship in the Comoros is purely as a backup. It fills in some gaps and fulfills a number of different practical purposes, but I’ve never planned on it being my only passport. And I never considered it to be the silver bullet that has to solve every problem.
But what if it was?
As I was working on this process a couple months ago, I began thinking to myself, What would happen if I renounced US citizenship as a Comorian citizen? And I imagine that thought has entered your mind too for any number of citizenships if you’ve ever considered renouncing. So let’s discuss.
Help me get my economic citizenship!
The biggest misconception about renouncing
There are a lot of misconceptions about renouncing US citizenship. One of the biggest is the idea that you can never go back to the United States if you do. There is this idea that if you renounce your citizenship, then going back to the US is like Christopher Columbus sailing off the edge of the earth and into a pit of dragons. It’s just not going to happen. But this isn’t necessarily true.
First of all, as a US citizen, you’re allowed to renounce your citizenship. That’s your right. (They do now charge you $2,350 for the privilege of doing so — whether you renounce or relinquish — but it’s your right.) I’ve heard stories of people being treated very poorly when they renounced their citizenship, however, I’ve also heard stories of people being treated very professionally. I tend to believe that the latter is a more common occurrence. So if they don’t freak out when you decide to leave the country and give up your citizenship, what happens when you want to come back?
We already know that the fear that you can never go back is misplaced. There is nothing on the books that states that former US citizens who have renounced their citizenship will never be let back in the country. Nevertheless, you will have to play by a different set of rules in order to enter the United States. And, depending on where you obtain your second citizenship, there are two potential sets of rules that could apply to you: visa waiver countries and non-visa waiver countries.
The Rules of the Game: Visa Waiver Countries
For the folks who are buying a quick passport or going to the fastest countries to get citizenship (link), chances are those countries won’t be visa waiver countries. In fact, there are only 38 visa waiver countries in the world that are allowed to enter the United States without a full visa. These countries include most EU members, plus Chile, Australia, South Korea, Taiwan and Brunei. And no one except Canadians can just come to the United States without doing anything beforehand.
Citizens of all 38 visa waiver countries have to fill out what is called ESTA before they arrive. For the most part, it is a smaller version of getting an e-visa. You basically pay $14, fill out a form online and then they verify that you’re not a criminal. You have to do it beforehand and pay the fee, but then it’s good for two years. So if you were to get a passport from one of the qualifying ESTA countries, all you’d have to do is go online and get a quick approval before you travel. For instance, you could get citizenship by descent (link) in Ireland and then enjoy pretty straightforward travel privileges to the US.
The Rules of the Game: Non-Visa Waiver Countries
However, the average person is not going to get a passport from one of these countries. If that’s the case, you have to follow another set of rules, and that means you’re going to have to get a visa. Whether you get a passport through naturalization or you buy a passport as we’re discussing in this series, you’re going to have to get a visa.
Generally, what the US government looks for when handing out visas is whether or not you are going to return to your home country. This is where an economic citizenship on its own isn’t necessarily the best idea — especially if you’re looking to renounce and you want to come back to the United States. Economic citizenship is a great idea for renouncing, but do understand that if you renounce on a Comoros passport or a St. Lucia, Dominica or St. Kitts passport, you won’t have visa-free travel to the US. No country that offers economic citizenship can come to the United States visa-free except Malta. Malta is the only one.
So, unless you have the money to buy citizenship in Malta, you’re going to have to get a visa in order to visit the US on a passport you obtained through investment. That doesn’t mean it’s impossible to get a visa, it just means that they’re going to want to know that you’re going to leave the country once your stay is up.
Help me get my economic citizenship!
Potential visa complications
As simple as that sounds, it can be complicated. Roger Ver — best known as the Bitcoin Jesus because he gave away large amounts of Bitcoin — renounced his US citizenship on his St. Kitts passport. He wrote a huge check for taxes this last year as a US citizen, renounced and became St. Kittsian.
After renouncing, he applied for a US tourist visa and they wouldn’t give him one. He had a federal criminal conviction, but he claims that they told him that wasn’t the reason he was rejected. The bigger issue they told him, was that he didn’t have a stable residence. He was just a perpetual traveler bouncing all around, and US immigration officials tend to prefer some stability. From immigration’s perspective, this does make sense. They could easily be thinking that this guy used to be a US citizen — and he would still be a US citizen if it weren’t for the US taxing him — so why would he leave the country after his tourist visa expired?
So they denied him. They weren’t convinced he would leave the country and return “home” once his stay was up because he really didn’t have home.
The moral of the story is that if you’re going to renounce, but you’re also going to want to return to the US to visit and your only option is to use your economic citizenship passport to get a visa, then you’re going to need to have some sort of evidence-based stability. You need to be able to say “This is where I’m living. I have a lease, I own a home, I’ve got a driver’s license, a residence card, etc.” You don’t need this to renounce, but you will need it if you want a visa to come back.
Get your economic citizenship & second passport
My goal in doing this series is to help as many people as possible become global citizens by obtaining second citizenship. I live this stuff, in part, so that I can better help individuals like you reduce taxes, obtain a second passport and experience more freedom.
If you’d like to work with me directly to create a wholistic global citizenship strategy, then click here. We’ll go through an entire deep dive process to determine exactly what you need — from passports to residency to where you’re going to live — all so we can get you to your end goals.
If you’re just interested in getting a passport and already know which passport is the right choice for you, then you can go directly to Peter MacFarlane & Associates’ website and contact them by clicking here.
If you’re still determining which approach you should take, feel free to keep reading this series to garner all the knowledge you need to form a vision and actionable plan for the future.
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