Dateline: Ulaanbataar, Mongolia
As this series nears it’s end, I’ve been thinking a lot about the different opportunities and freedoms that you enjoy as an economic citizen. It’s one of those things where you don’t entirely know what it looks like until you have it.
But what are some of the freedoms that people seek when they are considering getting an economic citizenship? To name a few: privacy, banking, travel, identification, and insurance. This certainly isn’t the whole list, so if you’re not concerned about these specific freedoms, know that there are others.
Also, know that if you are here because you are interested in getting a second passport, going offshore and following the three pillars we discuss here at Nomad Capitalist — financial/tax reduction, second passport and investments — then you don’t have to have those concerns. Nevertheless, historically, these are some of the most common reasons people have looked at for getting an economic citizenship.
What’s happening right now is that a lot more people are getting interested in this stuff. It’s like the guy who wrote a book about nomadic working back in 1997 and nobody cared. Now, everyone is talking about it and it’s all over the place. Because of the spreading knowledge and interest in offshore strategies — and, in this particular case, economic citizenship — it’s important to stop and think about what it is we actually want and why it is that we want it.
So let’s take a look at the various freedoms I listed above to see if obtaining an economic citizenship will actually help you achieve those ends.
The freedom of privacy
The first freedom that most people will name when they begin to enumerate their reasons for obtaining an economic citizenship is privacy. People want privacy. They are tired of the government looking at what they’re doing and feel like their emails are being read, their phone calls listened to and their bank accounts spied on. And it’s not just a personal issue, many people also feel they need to protect their companies as well.
In terms of emails being followed, phone calls listened to and everything regarding being spied on, we don’t really talk about that kind of stuff here at Nomad Capitalist. Certainly, we’ve had guys like the CryptoHippie write a couple articles for us and he talked about how to protect yourself.
In all honesty, it seems to me that following those strategies is a much better way to go about protecting your privacy. One of the challenges of pursuing economic citizenship for greater privacy is that, even if you get the economic citizenship, you will still be a citizen of the country that has you worried. Only if you renounce will a second citizenship give you the freedom of privacy that you are looking for. A much simpler route to the freedom you are seeking is to use legal, online protections to safeguard your privacy in the first place.
The idea of getting a second passport just to have privacy seems, to, me an inefficient way to solve your problems. Even if you were to get an economic citizenship, you hear the speculation about the Five Eyes countries (the UK, US, Canada, Australia and New Zealand) that share information between themselves. Donald Trump got a little paranoid by the agreement and made a ridiculous claim that, while he wasn’t wire tapped by the NSA, the Obama administration had asked the British intelligence to do it and then share the data. While the Brits denied the claim, it goes to show just how entrenched spying is in the system.
One privacy benefit for economic citizens
Now, one aspect that economic citizenship does help with in terms of privacy is for individuals from a country like China. Is Comoros going to report you to the Chinese government as a Comoros citizen? No. In fact, most economic citizenships don’t. There are some countries where, if you’re naturalized, your name gets published in a register. However, in general, countries’ citizenship databases are pretty safe. So, if you’re from a country like China and you’re looking for a backup passport, then the privacy of not having to give up your current citizenship may apply.
And, obviously, you should follow all the laws. Fortunately, most of us in the western world enjoy the freedom of being able to have dual citizenship, so that’s not an issue. I can go online and talk about my multiple citizenships and nobody really cares. But that’s one way where privacy could help you.
The freedom of banking privacy
Last week we talked about banking with an economic citizenship, but what about privacy for banking? US citizens will often call me and ask how they can get around FATCA. Well, you better get a good economic citizenship. Don’t go to the Comoros. I’ve had people who did want to bank with more privacy so they got a better economic citizenship like Antigua or St. Kitts and then they renounced the US passport.
Simply having a second passport does not allow you to violate the requirements of the first. People often mistakenly think that whatever they do as a citizen of the Comoros doesn’t count toward the US and the US doesn’t have to know. Well, to the US, you’re always a US citizen — particularly when you’re in the United States and when you are a US resident — but really you’re a US citizen to them wherever you go. They don’t view you as a Comorian, they just allow you to also be Comorian.
I guess, in some kind of crude way, it’s like an open relationship where you don’t really approve of it, but you each go out and see other people. One partner probably doesn’t really like the idea, but maybe they’re just resigned to the idea that the way to keep the relationship intact is to let them go out and be with someone else on occasion. That’s not such a nice thing for them, but that’s how these governments look at it.
Help me get my economic citizenship!
So, the idea that you’re going to get around FATCA or be able to hide your bank accounts isn’t going to work. We previously talked about the idea that they put your country of birth on your passport, so if you go to any bank that is worth its salt — especially in places like Switzerland, Singapore or Hong Kong, places where people are looking to go — they’re going to say “You were born in the US, are you still a US citizen? Did you renounce your citizenship? Can you prove that to us?” And if you haven’t renounced, their answer will often be, “Well, then we can’t help you.” At the very least, you’ll have to comply with FATCA. There’s really no way around it.
Here’s the deal, a lot of banks just have everyone fill out the FATCA paperwork. And that’s not necessarily reported to the US government, but you have to sign a paper saying that they’re not a US citizen. I think pretty much every bank does that. I told you last week that when I went to Azerbaijan, they asked me to sign that I was not a US citizen and I told them that I was. So getting an economic citizenship without renouncing is not a way to get around FATCA. If you’re thinking that getting a second passport and paying to get it quickly is a way to get around FATCA, forget it.
I’ve met people who want to do this and I’ve just told them that it’s not going to work. It’s not what you want to do. You’ll have more rights if you renounce your US or citizenship, but then you’re going to be Antiguan. So that’s a question that you have to ask yourself.
The freedom of travel
One of the things that I think is a variation of freedom — and we’ve talked about this before — is the ability to have a passport to use as an ID. Nobody, once, has questioned me about really being from the Comoros — not the people at Qatar Airways, Egypt Air, hotels, nobody.
There have even been times where I’ve handed my passport over in Cambodia and asked for a Vietnam visa and they said they weren’t sure if that passport would work, but when they came back they said that it worked out very well because they looked at me and I was white. That’s the kind of stuff that people say in Asia. It’s may not be the nicest thing, but they say it. In a lot of places they still have that stereotype. They think “Well, he can’t be that bad, he’s a blonde guy.” It kind of offends me that that’s what they would say, but I guess if we’re looking at freedoms, there you go, you get some of the easier privileges of getting a visa.
By the way, I did this recently with another citizenship when I got a visa to go to China and I walked in and they said, “Oh yeah, you’re the American guy whose lawyer called in the other day.” So I think they were almost kind of a bit more lax for that reason.
Now, again, some of those privileges are curtailed. For example, I have a passport that states “Born in USA” that allows me to go to Iran. I can get visa on arrival and go to Iran pretty easily, but does Iran want to let a guy in who may no longer be a US citizen, but it says on his passport that he was born in the US? I’m not entirely sure I feel comfortable with that. That said, I do have more freedom to travel. I don’t have to be the American or the British person whose country may not have a good relationship with the rest of the world.
Insurance: The Freedom of Choice
Many of the freedoms of privacy, banking and travel come either after renouncing your first citizenship or by making a little extra effort. But there is one freedom that you obtain the moment you have a second passport. I’m a US citizen and I don’t plan on giving up my US citizenship right away because it’s serving me at the moment. Most people I’m working with don’t plan on giving theirs up, either. They plan on making it an extreme insurance policy.
And that’s the freedom that you have the moment you receive your second passport, the freedom of knowing that tomorrow you can decide to no longer be an American, or British, or Dutch or whatever else. You have the freedom that you can go out and travel and, while you may have to get more visas, you don’t have to be judged as an American.
Help me get my economic citizenship!
The biggest freedom for me is just day-to-day life. The biggest freedom for me is knowing that I have options. I don’t see a lot of the things that people think a second passport will solve getting solved by merely obtaining the passport. They’re mainly solved by getting rid of the first passport.
And, again, I do know and have worked with people who have spent anywhere from $200-$600,000 buying those passports. I do not know anyone who’s done the Malta or Cyprus programs because it’s not targeted toward westerners. (Why leave the US and become a citizen of the EU if your concerns are privacy and banking?) And these are the motivations I have seen behind their decisions to renounce.
These are the big freedoms. And having options is the ultimate freedom.
I have always been an entrepreneur, but being a little neurotic, I was always afraid of the chance that something wouldn’t work out and I would have to go do something else. As such, I was continually building up what they call a “screw you” fund, which gives you the financial freedom to just quit whatever you’re doing and walk away. I feel like I’ve gotten there with different businesses and success. All that’s left is to add the extra layer, which is the citizenship layer that will give me the physical freedom to go wherever I need to go and not be constrained to the rules of one government.
For me, that’s the greatest freedom. It’s important to be careful and focused on the right freedoms for you and understanding how an economic citizenship can aid you in achieving your end goals.
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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